Dubai’s food sector has undergone an enormous expansion over the last few years. This is due to booming tourism, high levels of business support from the government, and a very vibrant foodie culture. The city’s rise as an international food destination has been enhanced even further by its strategic location, world-class logistics networks, and tax exemptions that attract top talent from across the world. Starting your own food trading business can be very profitable, as long as you make sure your company is set up right from the start. In this guide, you will learn the ins and outs about obtaining a food trading license in Dubai.
What is a food trading license in Dubai?
A food trading license in Dubai is what will allow you to legally import, export, distribute, and sell food items in the UAE. Depending on where you set up your food trading business, the license will either be issued by the DED (for mainland businesses) or the applicable free zone authority. With a valid food trading license, you can handle a large range of food categories, ranging from frozen food and dry goods to specialty food and beverages. Your food trading license also boosts the credibility of your business as it indicates compliance with the food safety standards of Dubai and UAE.
Who needs a food trading license in Dubai?
You will need to apply for a food trading license if you plan to distribute, sell, import and export any food products in Dubai. This includes companies from small retailers to large wholesalers that fulfil orders for supermarkets and restaurants. You will also need a food trading license if you are an entrepreneur planning to sell any food items online, in physical stores, or via B2B supply chains. Engaging in any of these activities without the right license can lead to penalties, fines, and even the suspension of your business operations.
Steps to get a food trading license in Dubai
Getting a food trade license in Dubai does not have to be a distressing process. Here are the steps you need to follow to make it as streamlined and hassle-free as possible:
Step 1 – Choose the correct business activity
You must begin by electing your official business activity from the lists of the DED or free zone authority. Common activities include Organic Food Trading, Frozen Food Trading, and Foodstuff Trading. Make sure you choose the activity that is the closest to your proposed business activity. This is a very important step as the chosen activity will determine what approvals you require.
Step 2 – Make a choice between mainland or free zone
This is another important step and one every business owner has to make when starting a business in Dubai. There are advantages and disadvantages to establishing a business on the mainland and in a free zone. While mainland companies are allowed to trade across the UAE and apply for government contracts, free zone businesses enjoy significant tax benefits and lower set up costs. Weigh up the pros and cons of all your options and choose the one that will present your business with the most long-term benefits.
Step 3 – Book your trade name
The next step involves choosing a name for your new food trading business and will require you to put your creativity to good use. You need to choose a name that not only represents your business well, but also meets all the UAE naming requirements. Your business name must be one-of-a-kind and can’t include any religious or insulting words and phrases.
Step 4 – Apply for initial approval
Once you have defined your business activity, decided on a jurisdiction, and chosen a name for your business, you can apply for initial approval from the DED or free zone authority. Getting initial approval means that the relevant authorities do not object to your proposed business and that your plan aligns with the regulations of the UAE government. The initial approval serves as a green light to continue with the food trading license application process.
Step 5 – Acquire external approvals
Legally operating a food trading business in Dubai is subject to obtaining certain external approvals. The Dubai Municipality’s Food Control Department is responsible for issuing the majority of these approvals. To get approval, you will have to draw up and submit a food safety plan, obtain a health card, and pass the required hygiene and food safety inspections conducted by the FCD.
Step 6 – Rent a warehouse or store with appropriate facilities
When running a food trading business in Dubai, you need a suitable storage facility or warehouse. This is compulsory, especially if your business activities involve storing or importing food items. The facility you choose needs to meet all relevant safety regulations (including temperature-control requirements), must be registered with the Dubai Municipality, and possess the required infrastructure to safely handle any perishable items. Try to secure a suitable facility as soon as possible to avoid any delays in the licensing process.
Step 7 – Submit final documents and collect license
Once all the previous steps have been completed successfully, you need to submit your documents for final approval. After a final review has been done and you have paid all outstanding fees, you will receive your official food trading license. You will now be able to legally trade food in Dubai.
Step 8 – Required approvals and compliance regulations
The food trading industry in Dubai is heavily regulated. To legally operate your business, you will have to get full clearance from the Food Control Department of the Dubai Municipality. This is mandatory for all businesses operating in the food sector. The UAE also has a series of laws relating to food labels that have to be followed. They relate to things such as ingredients, allergens, nutritional information, and details of the country of origin. If you are importing perishable goods, you may require additional permits such as health certificates issued by the country of origin.
Cost of a food trading license in Dubai
There are various things that impact the cost of a food trading license in Dubai. This includes the jurisdiction you chose, the structure of your business, and the activities you defined. If you choose to set up your business on the mainland, the license fee alone can cost between AED 12,000 and AED 15,000. Free zone licenses generally range from AED 10,000 to AED 20,000.
Other costs you may incur:
- Additional external approvals – AED 1,000 to AED 3,000
- Storage facility/warehouse rental – AED 15,000 to AED 50,000 per year
- Visas and establishment card – Between AED 2,000 and AED 5,000
- Import permits (when applicable) – Determined by product type
The total setup cost of a food trading business in Dubai can range from AED 25,000 to AED 70,000.
Documents needed to apply for a food trading license
An important step in applying for your license involves compiling and submitting various documents. This includes:
Proof of Identity: Provide copies of passports for all shareholders. Include Visa and Emirates ID copies if the shareholders are UAE residents.
Company Formation Papers: Include the Trade Name Reservation Certificate, the Initial Approval Certificate, and the Memorandum of Association (MOA) or similar corporate documents.
Premises Verification: Submit your signed lease agreement and its Ejari registration for your warehouse or office, which is essential for final activity approval.
Mandatory Regulatory Clearance: Provide external approval papers from the Dubai Municipality that confirm compliance with specific food control standards.
Benefits of starting a food trading business in Dubai
Flourishing tourism sector:
Dubai’s food trade sector benefits greatly from the millions of tourists that visit the region every year. The multitude of top-notch dining experiences, food festivals, and other culinary events that take place in Dubai and across the UAE also attracts residents, cultivating many business opportunities for entrepreneurs.
Access to top infrastructure:
Dubai is home to world-renowned airports, ports, and road networks that provide access to effective, streamlined shipping, storage, and customs processes.
High tech adoption:
Dubai has a reputation for being an early adopter of the latest technologies across many industries. The food trade industry is no different. Entrepreneurs have the opportunity to embrace various technologies ranging from food delivery apps to farm-to-fork traceability systems that will not only make their operations more efficient but also improve overall customer satisfaction levels.
Strategic geographical location:
Dubai’s superb location serves as a magnet for entrepreneurs from across the globe who are looking for easy access to the markets in Africa, Europe, Asia, and the Middle East.
Business-friendly environment:
The UAE government is very supportive of entrepreneurs and focuses a lot of attention on business development. Thanks to this support, the food sector experiences ongoing growth and innovation.
Frequently asked questions
Do I need a separate license for importing and selling food?
No, you don’t need individual licenses if you want to both sell and import food. A food trading license will cover both activities.
Can I sell online with a food trading license?
Yes, you can sell food online with your food trading license. Additional permissions might be required depending on your specified business activities.
What if I want to store food in my own warehouse?
If your warehouse or storage facility is approved by the Dubai Municipality, you can store food in your own warehouse. Make sure you adhere to all temperature-control and food safety regulations.
How long does the license process take?
Obtaining your food trading license generally takes anywhere from one week to 14 working days. The exact time depends on how long it takes to submit your documents and get the necessary external approvals.
Can expats own 100% of a food trading business in Dubai?
Yes, full foreign ownership is allowed for food trading businesses in Dubai.
About Set Hub
Starting a new business can be both exhilarating and extremely stressful at the same time. Luckily, it is not something you have to do by yourself. The Set Hub team has more than a decade of experience helping new business owners navigate the complexities of setting up a new food trading business in Dubai. Whether you are struggling with a single aspect of your new business setup or the entire process, our team will provide you with all you need for a seamless business setup in Dubai.