Why Clothing Business in Dubai
When you consider the fact that Dubai is a global tourist destination and hosts multiple international fashion weeks every year; the idea of starting a clothing business here sounds like gold. And for the most part, it is.
The Emirate is home to a plethora of global brands ranging from designer apparel to everyday wear. It is also the home of people from 200+ different nations, which makes a very diverse market to contend in.
That said, starting your clothing business in Dubai can lead to plenty of opportunities. Here is all you need to know about starting a clothing business in Dubai, from the required licenses to the registration steps.
What License is Required to Start a Clothing Business in Dubai?
For you to start a clothing business here, 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 in 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.
Requirements for a Clothing Business in Dubai
To start a clothing business in Dubai, you will need to fulfill the following 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 re
patriate 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.
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.
Online Clothing Store Setup
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.
Keeping in mind the above-mentioned information., it is obvious that starting up your clothing business in Dubai 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.
Contact us today for successful clothing business setup in Dubai!