What are the Factors Driving Demand for Warehouse Licenses in UAE?

The eCommerce sector in UAE is a growth driver for the Warehousing industry in UAE. Demand for a warehouse license in UAE is on an all-time rise with the rising traction for online shopping.

Driven by the growth in the eCommerce business sector, warehousing is a lucrative business opportunity that large and small distributors, logistic service providers, traders can take advantage of.

Ecommerce Sector growth and Requirement of Warehouse

The increasing popularity of e-commerce and global trading requirements are adding more warehousing space to the UAE market.

The high internet penetration, high purchasing power per capita, and large consumer spending are creating a favorable market for eCommerce companies.

To power the eCommerce business there is a growing requirement for the right logistics support, distribution network, and warehouse for managing the deliveries effectively.

Warehouse License Categories in Dubai

In UAE mainly warehouse license is available from two major business jurisdictions – The Mainland of UAE and the Free Zones. The rates for the warehouse have been highly competitive in the UAE with a wide range of options available.

Cost of Warehouse License in UAE

Warehouses License in UAE are an integral part of the Free Zones and Mainland business ecosystem. Depending on the specifications, location, and type, the price varies. The cost of a warehouse license in Hamriyah Free Zone starts at AED 85,500 for a 307 Sq.m Warehouse.

The warehouses are an essential business requirement for all businesses that require storage space or a light manufacturing and assembling unit. The cost of the Warehouse depends on various factors such as size, power consumption, customization for cold storage, manufacturing unit, assembling, etc.

The Warehouse License cost of a 125 Sq.m warehouse in the Sharjah Airport Free Zone is AED 48,000 / year ( Special Discount rate). SAIF Zone has a wide variety of Warehouse units for lease ranging from 100 sq.m, 125 sq.m, 400 sq,m, and more customized offers available for the investors.

The warehouse rental cost is a recurring yearly payment to continue the operations to the next year. Similarly, the Warehouse License and Trade License of the company must be renewed on a yearly basis.

Choosing the Right Warehouse and Business Jurisdiction

Most of the Free Zones have warehouse facilities for their investors at the Free Zone premises. It provides the right storage infrastructure for trading companies and light manufacturing units.

Also, there are warehouses available in the Mainland of UAE operated by private businesses that can be rented as per requirement.

UAE as a whole provides top-class warehouse, storage, transport, and logistics support services to the businesses operating in the region to easily conduct daily trade operations locally and internationally.

Warehouse Choices in Free Zones and Mainland of UAE

An investor can apply for a general trading license from any of the Free Zones in UAE or the mainland of UAE by opening a Limited Liability Company.

The Free Zones offer Customized Warehouses for investors at affordable rates and enormous business benefits. Similarly, for an LLC Company, there are private warehouses around the UAE where the goods can be stored and managed accordingly.

All the goods imported to the UAE must follow the Customs guidelines and clear the required checks to be legally sold or distributed in the UAE.

Also, for the goods stored in the Free Zones, there are in-house Customs checkpoints in most of the Gated Free Zones in UAE. Any exchange of goods to and from the Free Zone must pass through the Customs.

Free Zones with Warehousing Facility

Free Zones in UAE with warehousing facilities offer the perfect infrastructure for trading companies to store the goods, facilitate imports/export, and distribute in the UAE and GCC region.

Top Free Zones with Custom Build Warehouse Facilities

1. Dubai Airport Free Zone

2. Sharjah Airport International Free Zone

3. Hamriyah Free Zone

4. Dubai South

5. Jebel Ali Free Zone

Benefits of Setting Up an Export House in UAE

Investors can get into long term lease contracts and use the space for storage, distribution, packaging, and assembling. Free Zones in UAE offer customized warehouse facilities that can be used as light manufacturing units for the manufacturing of certain permissible items.

To get more details about warehouses license in UAE and light manufacturing units offered by various Free Zones in the UAE, connect with our team right away!

The key benefits of setting up an export house or a logistics business in UAE are the following:

1. Enjoy the Tax-Free Environment in UAE

UAE has a Zero Taxation policy for business, the only tax in UAE is a 5% Value-Added-Tax. In the Free Zones, there is a benefit of Zero percent import duty on imports to Free Zones.

However, the goods going out of the Free Zone to the mainland will be subjected to the normal VAT.

Also, the foreign investors who are setting up an export or trading company in the UAE can benefit from the Double Taxation Avoidance Agreement (DTAA) and save tax in the home country.

A Tax Residence Certificate can be applied in the UAE that will act as proof of residence for tax savings in the investor’s home country.

2. Ease of Doing Business

UAE has a robust e-Governance and simplified Company Setup options across the various Free Zones and the mainland of UAE.

Compared to the European region and other countries in Asia, UAE has one of the most streamlined and quick companies formation and ease of doing business.

To support business growth UAE has all the necessary infrastructure and Government support.

Business Consultants will assist investors in preparing the required documents and guide through the company formation process ensuring a hassle-free company setup in UAE.

3. Enormous Market Opportunities

Setting up a company in UAE opens up a large market opportunity for the investors. The strategic location of the UAE makes it a perfect trade hub and business center.

The logistics and transport infrastructure (road transport, shipping network, air transport) connects UAE with more than 190 countries including the whole of GCC Countries and the rest of the Middle East and Africa region.

Hence, for local traders and business investors in the UAE, there is immense scope for easy expansion to global markets and target more customers for their business by setting up a company in the UAE.

4. Low Cost- High Revenue Generating Business

The Business Setup Cost in UAE is comparatively lower than other European Countries and provides world-class infrastructure facilities to support the business.

Also, businesses in the UAE have a huge potential to grow and scale-up generating higher revenue due to an expanding market and trade ecosystem.

5. Flexible Warehouse Options

The vast availability of customized Warehouses in the UAE makes it a perfect location for general trading companies and export houses.

Trading Companies can set up their distribution unit and branches / new companies in UAE and facilitate global trade operations by making UAE the central warehouse location.

The well-established logistics connectivity and storage spaces for specific purposes (Food Storage, Cold Storage, Medical Products, etc.) as well as storage facilities for general goods make the general traders easily import and export goods to and from UAE.

To know more about Warehouse Facility Requirements in UAE for your company, connect with our team right away!

Contact: Aurion Business Consultants