Setting Up A Textile Business Setup in Dubai and UAE

Dubai, the UAE’s commercial capital, has become a popular business destination for international investors, entrepreneurs, as well as business professionals. Whether it is oil, gas, manufacturing, or production, Dubai is a perfect investment ground for every kind of industry. Thanks to the new policy of the UAE government, 100% business ownership is now allowed for foreign nationals, making business setup in Dubai a lucrative opportunity for everyone in the world. One such industry which is taking full advantage of this golden chance is the textile industry. The textile business setup in Dubai plays a vital role in strengthening the country’s economy and creating huge employment opportunities.

So, if you are an entrepreneur aspiring to set up a textile business in the UAE, this blog can guide you. Today, we’ll cover topics relating to textile business setup or company formation in Dubai and other related information.

UAE’s Textile Industry And Dubai Textile City (DTC): An Overview

The UAE government has been trying to develop various strategies and tactics to boost the non-oil industries and create new revenue streams for the industries that do not depend on oil. The result of such an initiative is that today’s manufacturing industry stands second on the list of most profitable sectors in UAE, after oil and gas.

In an attempt to let the textile industry prosper, the availability of free zones in the UAE plays a crucial role. Dubai Textile City (DTC), which is geared to the textile industry, is one such free trade zone. This zone is a joint venture between Dubai Port, TEXMAS, and the customs authorities. Entrepreneurs and business people from all over the world want to set up textile businesses there, lured by the benign taxation framework. It allows company owners to conduct their operations without having to pay any customs fees, which are normally levied at a rate of 5%.

In Dubai Textile City (DTC), the following kinds of business activity are permitted:

• Textile and fabric.
• Merchandise trading as well as import and export.
• Fashion and couture.

There are a variety of corporate structures from which to pick when forming your company:

• Free Zone Limited Liability Company.
• Free Zone Company.
• Branch of a Foreign or UAE Company.

Others Blogs –  How to start a form in Dubai for sustainable success

Procedure To Setup Textile Business In Dubai

Thanks to the favorable business setup norms and guidelines of the UAE government, starting a textile business in Dubai has become easier. You just have to follow the below-mentioned steps:

Start by deciding a Trade Name

The trade name is your business’s identity, so it is crucial to use a catchy name that relates to the service or product you are offering. While choosing the name, you need to comply with the rules and regulations of the UAE government specifically specified for trading names. Some of the vital rules that you should take care of are:

• Not using a controversial word,
• Avoid using any religious name,
• If a person’s name is being used, use his full name as per the passport, etc.

Once you have decided on the name, you need to register it legally.

Pick A Strategic Location

Choose a location from where you can target and attract the right audience. On finalizing the spot, register it with the Dubai Land Department and obtain the Ejari (Tenancy Contract) from the landlord. If you are in the textile manufacturing business, then Ejari is an essential document. However, you don’t need it to open a retail store. Additionally, for wholesale business or import-export of textile, the requirement of Ejari is waived for the first year.

Choosing A Business Structure

The legal framework and other formalities relating to your business depend on the corporate structure (mentioned above) you choose. The positive news in this regard is that there is no more requirement for Emirati sponsors. 100% foreign ownership of the business is now allowed.

Document Submission For Initial Approval

On finalizing the legal framework for the corporate structure you choose, document submissions need to be done to the appropriate legal departments and authorities. If they find all the documents fitting and suitable, you will get the initial approval. After that, all you need is to obtain a trade license for legally conducting your business operations.

Here are the necessary documents that need to be submitted:

• Stakeholders’ and Owners’ copies of Passport and Visa.
• National Identity Card of all the participating shareholders.
• Evidence of reserved trade name.
• Evidence of initial business information validation.
• Duly signed Memorandum and Articles of Association.
• Lease contract stating the office’s physical address.
• Invested capital.

Getting The Business License

Once the appropriate authorities sanction the documents and license application, DED issues the trade license that authorizes you to conduct the textile business operations.

Advantages Of Starting A Textile Business In Dubai

• Total foreign ownership and complete profit repatriation.
• Complete exemption from paying any corporate taxes.
• 100% Exemption from personal income tax.
• 100% exemption from customs charges.
• Long-term lease and affordable rent.
• Option of subleasing the space.
• Operating costs are low.

Final Words

We hope this article proves to be of value to you in understanding the procedure to set up a textile business setup in Dubai and how lucrative this sector is. So, if you want to start your own textile business in the UAE, you can get more advice from our experienced team of corporate advisors at Make My Firm. We’ll be happy to help you.