We currently live in a globalized world that allows us to have access to various economic and technological benefits. This is where the international trade, since it is essential for a business to be competitive that internationalize your company and enter new markets.
This is why, as entrepreneurs, we need a commercial strategy that is not only dedicated to local or national commerce, but, to achieve greater recognition and profit margin, it is necessary for your market to expand and not be limited. For this we have the help of experts in international trade.
There are many markets that have great potential that allows and facilitates the internationalization of companies; Thus, as the first market that we will analyze over the course of these months, Dubai has been chosen given its importance as it hosts Expo 2020, held during this year 2022.
Business opportunities in Dubai
Dubai is a market that offers many opportunities to invest commercially. The most interesting and attractive thing for companies is that it turns out to be a strategic market due to its geographical location that allows it to reach the countries of the region, making its way between East Africa, Asia, Iran and the Arabian Gulf.
Before starting to explain what to do to be able to sell in Dubai and/or establish ourselves in the market, we will briefly review certain data that show us the standard of living and its quality in the United Arab Emirates.
How to internationalize a company to Dubai
If we start with the GDP per capita, we find that the country occupies the 27 of 196 with a volume of €33.850 in 2020, also placing it as the 36th economy by GDP. And with respect to business, the country has placed itself in number 11/190 of the Doing Business ranking due to the ease of access to establish businesses.
Export to Dubai
The first thing to keep in mind if you want to sell a product in Dubai is that you need to have a license for commercial activity, whether it is an online activity or not. To obtain this license, it is necessary to present a copy of the passport, a copy of the last invoice, a copy of the CV, and a bank reference letter.
Another aspect to take into account is that both Dubai and the country itself are considered a very competitive market, which implies that the company that decides to operate in the market must have a lot of experience, capital and sufficient infrastructure. Furthermore, in order to sell from abroad, companies must have a local partner to be in charge of relations with both health and customs authorities; Just as the company must also go to Dubai at least once, since knowing the businessman with whom it intends to do business is essential for Dubai residents, as is sending samples.
On the other hand, the products must be registered with the Dubai Municipality by the importing company or by the distributor itself. In this aspect, special care must be taken, since the characteristics that correspond to the product in every detail, since the slightest error in the description could not only result in a delay in registration, but could also result in your entry being permanently prohibited. In this way, it is possible to attract investments and promote the economic development of the region and specifically of certain areas that on their own have little attractiveness, which is why, throughout the city, around twenty free zones have been established.
However, there is also the possibility of not only wanting to export to Dubai, but wanting physically establish yourself in the place. This may be motivated because Dubai is located in a free zone, that is, an area in which there are a series of financial advantages for those companies that establish themselves in the area.
How to set up a company in Dubai
To do this, entrepreneurs can do so by establishing a sole proprietorship company, a joint venture, a limited liability company, a branch or a representative office.
With respect to the constitution of a sole proprietorship company, we must start from the fact, as mentioned before, of the need to have a local agent because no foreigner can establish an industrial or commercial sole proprietorship, but can only establish a professional type. This does not occur in a joint association, where the company can be made up of foreigners and local citizens. However, the most common thing among foreigners who want to establish themselves in Dubai is to establish a limited liability company by contributing a minimum capital of 300.000 AED, which represents an investment of around $82.000.
To establish a branch in Dubai, it is not necessary, unlike a sole proprietorship, for a local citizen to be established; although it must have a local sponsor to be in charge of administrative procedures. However, they must have the license issued by the Department of Economic Development and the approval of the Ministry of Economy. And, on the other hand, a representative office can be established, which, despite being similar to the branch, cannot receive income from its activity, so these are intended for research.
On the other hand, you must also decide in which area you want to establish the company, since doing so in a free zone in Dubai It can provide a series of advantages, such as the company being owned solely by a foreigner, not having to pay VAT or corporate tax, and both the director and his employees being able to obtain a residence and work visa. and family for three years and extendable for life, not having to pay income tax, nor on wealth and assets and being exempt from social charges. However, there are also a series of drawbacks when choosing to establish in a free zone, since not all activities are allowed and you can only maintain commercial relationships with suppliers and non-individual clients. Therefore, if one decides to open a business in one of Dubai's free zones, they will only be able to carry out three types of activities: consulting, commercial company and holding company; Although if you want to choose another activity, you must establish a local company in which a Dubai or Emirati owns at least 51% of the business.
Once you have decided the legal form of the business, you have to know what type of activity you want to do because depending on the area, certain activities will be allowed. Then you must present the documentation regarding the activity and type of entity along with the copy of the passport and the documents requested depending on the type of company and chosen area. Once the documentation has been sent, the business license will be sent to the businessman, so he or she can request to open a corporate account and receive a visa.
At RRYP we are experts in business internationalization. Get in contact us.
Graduated in Law and internationalist from Loyola University. Export manager at RRYP Global – Reáculoateypunto. In my free time I dedicate myself to debating, learning history and getting to know the world, its cultures and its languages. I speak French and English and have a slight knowledge of Chinese, Greek and Wolof.
