Logistics refers to the science/art (whichever way you perceive it!) of moving services, goods and other information in and out of organizations. Businesses know it as the supply chain component that covers managing inventory and transportation of items. The UAE has an excellent environment for logistics players and there are several incentives provided by the Government as well.
5 Things to be Kept in Mind before Starting a Logistics Business in UAE
- Choosing the right location to invest
Dubai and Ras Al Khaimah have innumerable logistics players who make up the backbone of the operations sector in the UAE. Dubai has a separate free zone which is dedicated for logistics businesses and this is known as Dubai Logistics City. You should choose where to invest beforehand in order to get all requisite benefits and profit from a strategic location, available infrastructure and Government support. You should choose whether you wish to set up in the mainland or in a free zone.
- Setting up in Dubai Logistics City
It is really easy to set up a logistics business in the Dubai Logistics City free zone and you do not have to pay any taxes for both local and global markets. You get access to banking services along with engaging contemporary logistics centres as well. There is global optimization of customs payments and taxes while you can also benefit from activities like optimization of pricing policies and freight forwarding.
The activities that are carried out here include logistics service providers, forwarders (multi-modal cargo handling), companies supporting logistics businesses, companies carrying out any light assembly, contract logistics service providers and trading/industry entities. Benefits include 100% repatriation of profits and capital, commercial flexibility and independence, no Government limitations on gained profit distribution and investment asset withdrawal. There are import and export facilities along with zero regulations pertaining to currency exchange.
- Setting up in Ras Al Khaimah free trade zone
Ras Al Khaimah free zone is one of the biggest global supply platforms for business owners. RAK free zone is a universal center for transport which encompasses both freight and cargo. It also offers packing, checking and final assembly services for goods. There are multiple benefits available for logistics businesses here as well.
- Courier Services
Any courier company that wishes to start operations in Dubai should be suitably licensed via Emirates Post Group. Owner has to obtain commercial license and trade activity registration and 20 working days are needed for license issuing. The online application has to be submitted with necessary documents. Owners can be of any nationality and cost for each license is AED 100,000.
Documents needed include the copy of local family book, passport copy of owner and shareholders, trade name reservation copy, initial approval copy, copy of established firm, copy of trading register and commercial license and lease contract copy.
- Road Transportation Services
Transport licenses can be obtained from the National Transport Authority in UAE. The transport vehicle should be equipped with safety equipment and technical requirements should be met. UAE citizens can apply for these licenses and commercial licenses are needed for applying for transport licenses in Dubai. Transport licenses will be issued for a period of 3 months and should be renewed within 30 days as well. Passenger vehicles should pay AED 1,000 and AED 5 for every passenger seat in order to obtain a license. Commercial goods vehicles should pay AED 100 and AED 10 for every tonne of gross vehicle weight.