Starting textile business in Dubai makes sense for foreign investors due to the emirate’s status as the leading commercial hub in the region. The process of business setup in Dubai is perfectly aligned for textile companies as the emirate is a gateway to the Middle East and other lucrative global markets. This makes imports and re-exports easy for the business owners, presenting them with a profitable opportunity.
Moreover, the influx of investors is expected to increase in the wake of the recent economic reforms. Against this backdrop, we will discuss the opportunities and requirements for setting up a textile business in Dubai. Business setup consultants in Dubai will help you with the practical and legal considerations of the company formation process. Read ahead to understand how to start a textile business in Dubai along with other related information.
Opportunities in the UAE Textile Industry
The textile industry is one of the biggest industries in the UAE and the country is a leading hub of luxury garments and apparel. The UAE is a leading logistics hub, effectively connecting the East and the West and serves as the centre for re-exporting goods to the Middle East, Asia, Africa, and Europe. The textile industry in the UAE exports its goods to more than 50 countries apart from having a strong domestic market. Investors can also benefit from factors such as strong support from the government, easy connectivity to all parts of the world, robust infrastructure, low taxation etc.
Key Things to Note before Opening a Textile Business
Before even starting, you need to have a closer look at the requirements of business setup in Dubai, especially the regulations set out by the government and relevant licensing authorities. You must also study the market and keep up-to-date with the competitors, latest trends, different styles, and unique designs of fabric and clothing lines. In the meantime, the best business setup consultants in Dubai can help you navigate the legal requirements. Keep the following things in mind before opening a textile business in mind:
Select the right location
Starting a business in Dubai is a strategic decision that requires you to choose between the free zone and the mainland. If you wish to cater only to international customers, it is advisable to choose any of the free zones. Dubai Textile City is a free zone that is dedicated to companies operating in the garments industry. However, you must remember that you can do business within the free zone premises or carry out imports or re-exports. On the other hand, you can start a mainland company to trade anywhere in the UAE. Business setup consultants in Dubai can help you to choose the right location.
Select a Business Name
You need to select a name for your company as per the official naming guideline. The name of your textile business should not contain any terms that are offensive or blasphemous. It should also not be similar to any other well-known company in your industry. The mainland or free zone authority may deny approval for your tradename application if you flout the tradename guidelines.
Select a Legal Structure
You need to decide the legal structure of the company depending on the number of shareholders. Remember that the free zone authorities and the Department of Economic Development (DED) allow different types of legal structures. Talk to company set up consultants in Dubai to choose an appropriate legal structure for your textile business.
Rent a Suitable Premise
A free zone license may come with an office premise, warehouses and other facilities. The rental terms will be mentioned in the relevant free zone license packages. On the mainland, you need to select a location and rent a warehouse suitable for your business. There, you may need to sign a tenancy contract (Ejari) and submit it to the DED.
Comply with Legal Requirements
While setting up a business in Dubai, you need to have a clear understanding of the regulations you are required to comply with. You need to check whether you fall within the scope of Value Added Tax (VAT), Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO) etc. The corporate tax on business profits will come into force from June 2023, which requires you to conduct an assessment of your compliance status. Business setup experts in Dubai can help you to carry out a comprehensive assessment and to help you comply with the relevant regulations.
Consult with the Best Business Setup Consultants in Dubai, UAE
Understanding the legal requirements of business setup in Dubai is critical for foreign investors while opening a textiles business. You need to start off on the right foot to run your company smoothly, for which the best business setup consultants in Dubai, such as Jitendra Business Consultants (JBC) can help you. We have a team of highly qualified professionals who can advise you on the UAE immigration and labour laws. JBC can also help you to navigate the compliance requirements related to ESR, UBO and VAT.