With the F&B trade reaching a benchmark of $20 billion in the first nine months of 2021 (Dubai Chamber of Commerce reports) and with the UAE Expo 2020 further strengthening UAE’s position as tourist destination, the time is just right to get into food trading business. According to Bloomberg reports in 2021, Abu Dhabi and Dubai import a whopping 90% of their food needs and UAE & Abu Dhabi having established themselves as an attractive international hub in the Middle East translates to lucrative environment for food businesses.

Dubai’s top food import countries include United States, United Kingdom, France and Brazil. With the New CCL that allows 100% foreign business ownership in most foodstuff and beverages, the market seems extremely opportunistic at the present.

Before you get started with the business registration process ensure to have these primary documents ready.
– Passport copies of owner/shareholders
– Residence or visit page of the owner/shareholder
– NOC from the current sponsor (if they have a resident visa)
– Emirates ID of the shareholders

We will first look at how to set up a business in the mainland and then in the free zone.

How to set up foodstuff trading in the UAE Mainland?

1.Identify the type of legal entity
Food stuff trading business require a commercial license and are typically registered as a Limited Liability Company (LLC). This structure permits a maximum of 50 shareholders.

The Department of Economic Development (DED) issues the business licenses for companies based out of Mainland and the free zone authority issues the license for companies based out of free zone. You will set up your business in the Mainland if you target the domestic audience.

2.Get the initial approval
Select and submit three trade names options for DED approval

3. Find an office space for your business
– After you finalize the space, procure the tenancy contract
– Register the tenancy contract on Real Estate Regulatory Agency (RERA)

4. Apply for trace license
– Members should sign the MOM attested by Dubai Notary Public
– Submit the tenancy contract and RERA registration to the Dubai Municipality’s Food Control Department
– Collect the payment voucher and make the total payment to procure the trade license

5. Register your product
Dubai Municipality’s food safety department is responsible for inspections and regulations for food trading. Therefore, every company, trading foodstuff in Mainland must register with the Dubai Municipality.

How to set up foodstuff trading in free zone?
You can easily set up business in free zone if you mainly intend to export and import and wish to avail tax exemption benefits. There may be few variations between different zones but the general procedure to set up a foodstuff trading in free zone is as follows:

1.Determine the type of legal entity
– Free Zone Limited Liability Company (FZ LLC)
– Free Zone Company (FZ Co.)
– Free Zone Establishment (FZE)
2. Choose a trade name
3. Apply for a business license
4. Choose an office space
5. Get pre-approvals, register your business, and get the trading license

After you receive your trading license from DED you also need to register your business and food items with Dubai Municipality.

Statutory requirement if you plan to import or re-export,

• Register on Food Import & Re-Export System* (FIRS) if you plan to import or export
• Get food label approved
• FIT Analysis for food stuff imports from Dubai Food Analysis Laboratory

Role of Dubai Customs

If you plan to carry out import and export trading then register your foodstuff with Dubai Customs. You will receive a unique custom code on registration, which will be verified during the import-export process.

Some general rules to keep in mind while procuring, holding and distributing the foodstuff include the following:

– The containers need to be made of materials that keep contamination away.
– The mover transporting the food needs to be free from germs.
– The food products need to be arranged in proper partitions.
– You need to maintain the proper conditions (temperature, humidity, etc.) for keeping the food items fresh.
– The containers need to have a temperature monitoring device.

Some of top the imports include, edible fruits and nuts, meat, dairy product, egg and honey etc. Some top exports from the UAE include, edible nuts, dairy products, sugar confectionary. (Source: United Nations COMTRADE database).

In additional to the main business, you can also carry out the following sub-activities for your food trade license. Some sub-activities include: egg trading, flour trading, grain, serials and legumes trading, ice trading, juice trading, mineral trading, potatoes trading, sugar trading, spices trading, snack food trading, soft drinks & carbonated water trading, fruits & vegetables trading.

Also, it is crucial to understand the contractual obligations clearly and carry out only permitted activities under your license to avoid litigation charges.

UAE has established itself as a headquarters for manufacturers, distributors and buyers therefore the only way to sustain and grow in the highly competitive market is to ensure the products are of high quality and comply with Dubai municipality’s standards to avoid paying a high price.

Penalty for Violation of Federal Law on Food Safety

Some other additional benefits of setting up foodstuff trading in the UAE are access to global events (as the UAE is the center stage for world events). Another benefit is that food Stuff manufacturing and trading is a labor-intensive sector and low labor costs combined with the latest technology to monitor food quality makes Dubai ideal for food trading business Also, there are many warehouses and manufacturing centers in the UAE that offer high quality storage facilities for food storage at a reasonable cost compared to storage costs in the western and European countries.

With free zones offering tax exemptions and attractive business establishment fees to investors, Dubai is a trader’s paradise and a center stage for foodstuff trading as there are 200 international cuisines available to its multinational population.

You can get in touch with Jupiter Business Mentors for any queries with business incorporation, you can visit https://jupiterbusinessmentors.com and book a free call with our mentor.