Embarking on the venture of opening a clothing shop in Dubai, specializing in apparel and various types of garments, is a venture of significant importance. Recognized as a global fashion hub, Dubai attracts fashion enthusiasts and hosts numerous shopping festivals throughout the year. Thus, investing in the retail market or starting a clothing business in Dubai holds immense potential as a compelling business idea. To capitalize on this opportunity, it is crucial to navigate the process of establishing a clothing shop in accordance with Dubai’s fashion-forward reputation.
That said, starting your clothing business in Dubai can lead to plenty of opportunities. Here is all you need to know about how to start online clothing business in Dubai, from the required licenses to the registration steps.
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What License is Required to Start a Clothing Shop in Dubai?
If you want to setup a clothing business in Dubai, you would need to obtain a Dubai trade license. There is no need for any additional licenses or permits, which is a plus point.
The process of obtaining a trade license Dubai is handled and supervised by the Department of Economic Development (DED). In order to commence the process, you will have to fulfill the set prerequisites and submit certain required documents.
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How to Start a Clothing Business in UAE?
To start online clothing business in UAE, you will need to fulfill the following requirements:
Legal Requirements
Prior to applying for a trade license, you will need to fulfill some legal requirements, including the following:
1. Draw Up a Business Plan
Your business plan must contain figures regarding your investment capital, vision, aim, and price range. It should also mention the activities you wish to carry out (10 activities are allowed per license).
Additionally, if you wish to set up an online store for your brand, you will have to mention it in your business plan as well. Details of the e-commerce process are mentioned in the later paragraphs.
2. Choose the Region
Dubai offers you two regions to set up your clothing business in;
- Mainland area
- Free Trade Zones (FTZs)
The second option is the popular one amongst expatriates. This is due to the fact that foreigners can own 100% of their company here, as opposed to giving a local sponsor 51% in the mainland area.
Free Trade Zones also offer special perks such as zero corporate and import/export taxes and the permission to repatriate 100% of your capital and profits to your country of origin.
On the other hand, however, setting up in a FTZ restricts you to operating within that jurisdiction. This is where mainland setup triumphs, as choosing this option allows you to open branches anywhere in the nation.
For a better recommendation on which region to pick, consider the services of a business set up consultant.
3. Narrow Down Supply Vendor
To establish a cloth business, you will need to narrow down a reliable vendor that will provide you with quality material at reasonable rates. This shouldn’t be too difficult considering Dubai’s geographical proximity to multiple cloth producing nations such as; Pakistan, India, China etc.
With that said, the importance of this step is a no brainer and should be one of your utmost priorities before trying to acquire a trade license in Dubai.
How to Obtain a General Trade License in Dubai
Once you have fulfilled the above-mentioned legal criteria, you may apply for initial approval from the DED. The steps that you need to take are as following.
- Pick a name for your company which is in accordance with the regulations laid out by the local government.
- Narrow down the business activities you wish to carry out.
- Select the region you wish to set up in. (Mainland or FTZ)
- Fill out the application and submit it to the Department of Economic Development for primary approval.
- Gather all documents relevant to the procedure.
- Rent a premise out to get a valid commercial address and tenancy contract.
- Get approval of your tenancy contract from Ejari (Land Department).
- Turn in your completed application form and required documents to the DED again.
- Wait for their final approval.
- Pay the trade license fee voucher that is provided upon approval.
Documents Required for a Dubai Trade License
- A detailed business plan
- A letter from the DED that gives you initial approval
- Ejari Verified tenancy contract
- Memorandum of Association with your local sponsor.
- Passport copies of all shareholders
Trade License Fees
The cost of obtaining a general trade license in Dubai is estimated to be around AED 15,000. However, it can go up to AED 25,000 in the first year due to factors such as;
- Government fees
- Trade name registration fees
- Local Sponsor fee
- Rent cost and tenancy security
To get an estimate tailored to your needs, we recommend you enlist the services of one of our expert company set up agents. We will break down the costs according to the requirements that you feed us and do our best to minimize the impact on your wallet.
Visa Process
In order to legally reside in and operate your clothing business in the Emirate, you will need to acquire a residence visa. Doing so will allow you to then apply for the visas of your dependents which include;
- Family members (spouse, kids)
- Domestic help (nannies, caretakers, maids, etc.)
- Employees (Salesmen, store clerks, etc.)
It should also be mentioned that the limit of your visas depends on the type of license and space that you acquire for your store(s).
How to obtain Residence Visa in Dubai
The steps for obtaining a residence visa are summarized below
- For mainland visa, register yourself on the E-channel service
- Apply for either an employment visa or entry permit. This is only temporary, after which you will have to change your status. The time period given for this is 60 days.
- Get your medical fitness test done, this includes a blood test and chest X-ray. You should get the results within 3 days.
- Acquire your Emirates ID card
- Get your residence visa stamp on your passport. This is when you get your visa sticker. It usually takes 15 days.
- You can apply for your family, dependent or even for your employees.
The total visa process should take between 30-40 days. A business setup consultant can guide you through the process to avoid any confusions.
How do I Start a Clothing Business in Dubai?
In the scenario that you wish to set up an online store for your brand. There are numerous platforms available such as Shopify. To be eligible for this, you will need to submit an application to the DED yet again. Additionally, you will have to register with the Ministry of Economy through their online web portal.
How can I start my own clothing brand in UAE?
Since UAE allows you to grow your brand internationally in a friendly and accommodating business environment, starting your own clothing brand in UAE is a good idea. Additionally, it is very easy to start your own clothing brand in UAE.
However, if this is your first time starting a business in the UAE, then it is highly suggested that you seek the assistance of Company Setup experts.
Here are the steps you need to follow if you want to start your own clothing brand in UAE:
- Choose a name for your clothing brand.
- business activities you want to perform.
- Select the economic jurisdiction where you want to locate your business.
- Get the initial approval from the relevant licensing authority.
- Obtain an office space.
- Get the required external approvals.
- Submit the required documents to the relevant licensing authority.
- Complete the payment voucher.
What are the Steps to Set Up a Readymade Garments Business in Dubai?
Here are the steps to establish a readymade garments business in Dubai:
- Familiarize Yourself with Dubai’s Garment Business Regulations
- Identify Your Target Market
- Establish a Reliable Cloth Sourcing Strategy
- Apply for a Garments Trading License
- Establish a Strong Presence Across Various Channels
- Implement Effective Marketing Strategies to Promote Your Products
What is the Cost of Setting Up a Readymade Garments Company?
The cost of setting up a readymade garments company in Dubai typically includes a license fee of approximately AED 15,000. Additionally, investors must reserve a trading name and cover the registration fee. It’s crucial to ensure that all intended business activities are covered under the readymade garments license.
Furthermore, consulting with Company Setup experts can be beneficial. They can assist in securing additional approvals at no additional expense and offer post-incorporation assistance as well.
What are Benefits of Opening a Readymade Garments Business in UAE
Opening a readymade garments business in the UAE offers several benefits:
a). Tax Advantages
Dubai imposes no personal or corporate taxes, making it an attractive destination for businesses. Additionally, the VAT rate is a nominal 5%, contributing to cost-effectiveness.
b). Affordable License Costs
The license cost for a readymade garment business in Dubai is reasonably priced, enhancing the feasibility of starting such ventures.
c). Profit Repatriation
Businesses can repatriate 100% of their profits, allowing for efficient financial management and investment diversification.
d). Business-Friendly Environment
The UAE government consistently implements reforms to foster a conducive business environment, particularly benefiting Indian and foreign investors. These reforms aim to position Dubai as a leading global business hub, offering secure investment opportunities with promising returns.
e). Complete Ownership
Whether establishing in mainland or a free zone, business owners can enjoy full ownership of their ventures in the Emirates. This flexibility enables entrepreneurs to operate with autonomy, requiring only a reliable local service agent to assist in procuring the necessary licenses for a readymade garment business in Dubai.
How can I start a fashion business in Dubai?
Starting a fashion business in Dubai is fairly straightforward. However, if this is your first time moving to the UAE, then the new culture and language in the country may seem a little intimidating at first. This is where the Company Setup experts come to the rescue.
This is because they have the necessary expertise and connections required to start your fashion business in Dubai without any hiccups.
Starting a fashion business in Dubai is not too different from starting a clothing brand. For example, the Department of Economic Development in Dubai is the licensing authority for businesses on the mainland.
However, if you want to start your fashion business in Dubai free zone, then you need to contact the respective free zone authority. Alternatively, you can contact Company Setup Consultants to start your fashion business in Dubai in any economic jurisdiction you prefer.
Here are the steps you need to follow in order to start a fashion business in Dubai:
- Select your business activities.
- Choose a name for your business.
- Get your license from the Department of Economic Development in Dubai.
- Make your visa applications.
- Open a corporate bank account.
How Profitable is a Clothing Business?
The profitability of a clothing business or a clothing brand in Dubai will entirely depend upon how the level of penetration your brand achieved in the market.
For example, brands such the Supreme and Gucci can get away with a very high-profit margin, while lesser-known brands are hanging on a thread. As a result, the profitability of your clothing business in the UAE will depend on how well your brand does in the market.
The popularity of your brand will depend on your marketing team more than your production team. This means that having the best quality product is not the key to success in the fashion industry.
You need to sell an idea or a trend, not clothes. If you successfully create a trend, then the clothes will sell themselves. As a result, it is crucial that you have an expert marketing team.
How much does it cost to open a Clothing Business in Dubai?
The cost of opening a clothing business in Dubai will depend on a couple of factors. The biggest factors among these are the location of your business and the size of your business. The size of your business explains itself.
For example, if you want to produce and sell your own clothes then you need a bigger starting capital. Whereas, if you want to buy from suppliers and sell to your customers, then you can get away with a smaller starting capital.
The UAE has various economic jurisdictions where you can set up your businesses. For a general guide, the more popular an economic jurisdiction is, the more costly it will be to start your business there.
There are three types of economic jurisdictions in Dubai, and you can start a clothing business in two of them. They are the mainland and the various free zones. The cost of obtaining a general trading license will range from AED 15,000 to AED 25,000 in Dubai.
How much is a garment trading license in Dubai?
The cost of a garment trading license in Dubai is approximately AED 15,000. This includes reserving a business name and covering the registration expenses.
How to start a garments trading company in Dubai?
Here’s a more structured and simplified version of the steps to start a garments trading company in Dubai:
- Develop a Business Plan
- Select General Trade as Business Activity
- Choose and Apply for Company Name and License
- Decide Commercial Jurisdiction and Location
- Secure a Local Sponsor
- Arrange Office and Warehouse
- Arrange Import Procedures
- Meet Legal Requirements
- Pay License Issuance Fee
- Provide Necessary Documents
- Application Verification
How can Company Setup help to Setup a Clothing Business in Dubai, UAE ?
Keeping in mind the above-mentioned information, it is obvious that starting up your clothing business in Dubai, UAE can be a great decision. The factor of exposing your brand to a worldwide audience is usually the deciding aspect for many companies and individuals.
The process of company formation isn’t too complicated, however, if you are new here, it can get a bit complicated. This is mostly due to the unfamiliarity with the legal structures and paperwork. It is for this reason that we advise you to acquire the help of a business set up agency in Dubai.
For further information and assistance on How to Start a Clothing Business in Dubai, UAE. To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.
