The United Arab Emirates (UAE) is a centrally important economy in the Middle East, with its unique positioning as a major trading hub within the Middle East and North African region. It stands 17th in the world when it comes to importing, with total imports adding up to more than USD 347 billion in 2021, according to data compiled by the University of Michigan. Its list of top trading partners includes China, India, the United States, Japan, Turkey, Germany, and Saudi Arabia – a diverse roster that points to one particular aspect that has made the UAE a desirable location for international trade: ease of doing business.
According to the latest Doing Business report by the World Bank, the UAE ranks 16th in the world when it comes to ease of doing business. The country recorded strong marks across a number of important business indicators, leading it to become one of the most desirable locations for setting up and doing business, not only in the region but the entire world.
In fact, the UAE recorded a score of 95.4 in the aspect of Time to Import: Documentary Compliance, making it one of the best economies for import trading. As such, it is no surprise that the country sees a high volume of international trade, particularly in Imports. In 2021 alone, the country recorded USD 269 billion in imports, which was good for 22nd out of the 226 countries covered by the Observatory of Economic Complexity (OEC).
Based on data released by the OEC, the top import of the UAE was gold, which accounted for USD 46 billion of the total. This was followed by Broadcasting Equipment at USD 18.5 billion. Third was Refined Petroleum, which amounted to USD 16.7 billion, and fourth was Diamonds, representing USD 13.6 billion. Cars were also a major import for the UAE market, accounting for USD 9.3 billion.
While there is a substantial market for imports in the UAE, it can also be a long-winded and complicated process, if you are unaware of the rules and regulations governing the industry. This article aims to serve as a quick and easy-to-understand guide to navigating the ins and outs of importing products to get you started in your journey.
Step 1 – Analyse the Market and Identify Your Product
Before entering the UAE market, one of the most important things you should do is understand the local business scene to determine products that are in demand amongst consumers. As a growing hub of business and trade, importers have the potential to capitalize on a highly diverse population of expatriates and locals. As mentioned earlier, automotive vehicles are considered one of the top imports in the UAE.
Glasgow Research and Consulting, a business research and advisory services firm, reports that the UAE is one of the major markets for commercial vehicles in the GCC region, second only to the Kingdom of Saudi Arabia in terms of size. This can be attributed to the accelerating development and commercialization of the country, in line with its long-term vision to be a competitive economic player on the world stage. With sectors like construction, manufacturing, transportation, and retail growing at a rapid pace, commercial vehicles are likely to see increased demand in the future, which could make for a conducive environment for growing a local automotive import business.
Step 2 – Secure the Requisite Permits and Licenses
As with any commercial venture, you will need to acquire the right business licenses and permits from the proper governing bodies to comply with local regulations. This phase of the process may take a long time. Therefore, it is advisable to allocate a sufficient timeframe that takes in consideration potential delays in processing and approvals. It also helps to have all the required documents prepped and ready ahead of time to avoid inefficiencies along the way. Below is a list of some basic permits and licenses that you are likely to be required to obtain:
- Trade License – A trade license is an officially recognized document that states the specific business activities a commercial entity is legally allowed to engage in. The Department of Economic Development (DED) is the local body tasked with issuing trade licenses in the UAE. If you are looking to start an importing business, looking through the DED website for information is a good place to start.
- Import/export license – An import/export license essentially allows a business to conduct international trade from within the UAE. In order to secure an import/export license, an applicant must register with Dubai Customs and acquire an Import/Export Code.
- Customs clearance certificate – A customs certificate allows customers to declare and obtain clearance to move products in and out of the country. To acquire this document, oftentimes it only takes a simple application through the relevant customs agency and payment of the requisite fees.
- Product registration certificate – A product registration certificate essentially signifies that a product has been officially recorded and registered as an imported good in the UAE. This entails the application for label assessment of products according to their specific product category.
Step 3 – Partner with a Dependable Freight Forwarder
Acquiring the right licenses is useless without any products to import. That is why it is important to work with a freight forwarder who has displayed a track record of consistency, reliability, and accountability. A company with significant experience in international trade, particularly in the MENA region, can yield compounding benefits for your business in the long run. Apart from that, it is also important to consider their network of partners to ensure that you have a wide range of routing and delivery options, which can lead to better efficiency. Finally, consider the cost of the partnership, as you will want to work within a lean budget as a start-up business.
Step 4 – Understand Customs Clearance Procedures
Finally, as an import business founder, you will want to know the finer details of customs clearance procedures in order to avoid any missteps, complications, or delays that could eventually lead to financial loss for your business. Some of the most basic ones to remember are below:
- Make sure to file the necessary declarations and applications promptly to avoid delays.
- Pay for taxes, tariffs, and customs duties for which your imported goods qualify.
- Ensure your shipped products are 100% compliant with UAE standards and quality control measures.
Conclusion
Finally, it is important to remember that even the best laid-out plans can still catch some snags along the way. That is why it is important to have resiliency, determination, and preparedness along with a strong understanding of the import business in the UAE. If you have these qualities, you already have the fundamental qualities of a winner.