UAE's Goods Export: Strategies, Global Expansion
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Exporting goods from the UAE is a popular business direction, primarily due to the country's strategic location in the region. The United Arab Emirates is one of the financial centers of the global economy, from which successful trading with markets in Europe, Africa, and Asia can be conducted, not to mention the region itself.
The attention of international investors and entrepreneurs is also drawn to the comprehensive transportation infrastructure, including maritime, road, and air transport. In 2021, the UAE exported goods worth more than $425 billion and imported $347 billion worth of goods. This represented a 26% and 40% increase, respectively, compared to 2020. And apparently, these figures will only continue to grow.
Customs clearance nuances in the UAE
Proper documentation and compliance with all customs requirements are key factors for successful delivery of goods to other countries.
Customs policy in the UAE is developed by the Federal Customs Authority (FCA). The primary legislation regulating exports is the Common Customs Law of the Gulf Cooperation Council countries, as well as Federal Law No. 13 "On Export Control" of 2007 and Cabinet Resolution No. 50 of 2020.
Each emirate has its own customs management mechanism. Moreover, export agencies operating in them develop special support programs for exporting companies. For example, in Dubai, there is a program to support small and medium-sized enterprises, the Export Academy, and special insurance products for exporters.
Goods can be exported from seven customs points:
- Abu Dhabi;
- Dubai;
- Sharjah;
- Ajman;
- Ras Al Khaimah;
- Fujairah;
- Umm Al Quwain.
When exporting, the exporting company provides the necessary documentation – invoices, certificates of quality and origin of goods – to its broker, who submits the corresponding customs declaration to the customs office. After inspection, the customs authority decides on the release of the cargo and issues an export permit.
Special attention is paid to food products (the expiration date of the goods is strictly monitored). Another nuance is the import of meat products. Companies importing them, in addition to standard documents, must provide a "Halal" certificate confirming that the imported meat products comply with the requirements of Islam.
Special conditions are provided for businesses registered in free economic zones. Such companies may not pay duties on the import of medicines, precious metals, diamonds (only uncut), animals, and fruits and vegetables.
In 2022, the role of the UAE as an intermediate exporter of goods to Russia sharply increased. The main components of international exports to our country include:
- industrial equipment and components;
- auto parts;
- household appliances;
- electronics;
- food products and alcohol;
- furniture.
A registry of import agents is also maintained in the UAE, allowing the tracking of the import of foreign goods without the permission of the rights holder (parallel import into the country is prohibited).
Companies intending to work in the export segment are advised to carefully study customs rules and develop an appropriate financial strategy.
Exporting goods from the UAE for a company is an important element of international expansion strategy. To successfully accomplish it, several stages need to be completed.
Contract Conclusion
One of the basic requirements is to draft a contract in two languages (English and the language of the exporting company). In some cases, a translation into Arabic may be required.
The contract should include all the key points:
- Names, contacts, and details of the parties involved;
- Payment method;
- Guarantees provided by the product supplier;
- Rights, obligations, and responsibilities of the parties involved.
For contracts exceeding six million rubles, it is mandatory to register the contract with the bank.
It should also be noted that in the UAE, when concluding framework (long-term) contracts, an appendix in the form of a product or merchandise specification is required.
Documentary Support Package
In addition to the contract for customs clearance, it is necessary to prepare an invoice, a packing list with a list of goods, their dimensions and weight, as well as a description of the exported items. In some cases, certificates may be required (certificate of origin of the product, "Halal" certificate, compliance certificates).
The complete set of documents depends on the type of goods being exported. It can be classified according to the TN VED code. Consulting a customs broker will greatly facilitate the identification of the product, as well as the collection and completion of all necessary documents.
Choosing a Delivery Method
Delivery can be done by sea, road, air, or rail transport. Depending on the chosen type of transfer, the corresponding waybill is completed.
Passing through Customs
If a company is importing goods into the emirate for the first time, it must register at the customs post through which its cargo will pass. During registration, each enterprise is assigned a special customs code. A trade license issued in one of the seven emirates is mandatory.
Customs Fees
The amount of fees varies depending on the TN VED code, which takes into account the value of goods in CIF, as well as the delivery channel. In the UAE, most goods are subject to a single customs tariff, which is 5%. However, the list of goods exempt from customs duties is quite extensive and includes agricultural products, precious metals, and pharmaceuticals. In the case of exports to other countries in the Gulf Cooperation Council, the customs declaration must be confirmed by the ATCD system to avoid duplication of duties.
After calculating the amount of customs duties, they can be immediately deposited into the customs account or transferred through a broker.
Export Declaration
The export declaration is completed based on information from documents describing the cargo and the method of delivery of the goods to the destination country. Errors in filling out the declaration can increase transfer times and, consequently, multiply corresponding expenses, so it is most advisable to entrust this task to an experienced representative.
The Level Consulting Company is comprised of experienced experts who will assist in all stages of business development, from registration and opening to full support of all trading and export operations.
Re-exporting - one of the strategies for expanding the product range from the UAE to international markets. It involves the resale of goods, allowing companies to generate additional profit and expand the geography of their business.
In terms of re-export volumes, the UAE is the third-largest market in the world after Singapore and Hong Kong. The main products re-exported through the UAE include food products, coffee and tea, products of the chemical industry (fertilizers, fuel, polymers, some construction materials), vehicles, and electronics. More than 50% of food products imported into the UAE are subsequently exported to Africa and other countries in the Middle East.
There are two main types of re-export in the UAE:
- Traditional (direct) re-export. In this case, the purchase of goods is made through the UAE. The country acts as an intermediary (transit warehouse), and the buyer incurs additional logistic expenses.
- Indirect re-export implies the presence of a direct delivery route. However, according to the contract, the buyer is a legal entity registered in the Emirates, while the recipient may be a Russian company.
Organization of Re-export in the UAE
All business processes related to the import and export of goods to or from the UAE are controlled by the Customs Service. Authorized bodies monitor the legality of transactions, check the availability of necessary documents - certificates, trade licenses for importers, etc. All goods entering the UAE must be marked with the date of manufacture, and expiration dates must be indicated.
Re-export does not involve the sale of goods in the UAE, so it is more convenient for a company to register in one of the free zones. This option allows the transportation of imported goods to a warehouse, which can also be rented in the free zone, and then exported.
The exporting company organizes the placement of the incoming batch of goods in warehouses in the UAE to carry out all necessary customs procedures and re-registration. Upon import, a duty of about 5% must be paid. There are exceptions - the amount of the fee is determined by the type of goods and the country of production. The duty can be fully refunded. The main condition is to prove that the goods are in transit and intended for transportation beyond the UAE.
An additional requirement for refunding the customs duty is to meet the deadline for submitting the application. The paid funds can be refunded only within six months from the date of import into the UAE. After re-registration, the cargo can be sent to a third country by air or sea transport. Delivery by road transport is not so common because it is expensive and labor-intensive.
As for the specific procedure of import and export, it is determined by the direction of the goods movement: re-export to the free zone or to other countries not members of the GCC (besides the UAE, the Union includes Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman with a total population of 65 million people). In both cases, a waybill for the goods and an export invoice must be provided.
The export invoice describes the goods, including type, weight, quantity, cost, and package number. The invoice does not have a specific form. Each company can develop its own form (usually it is in the form of a table), the main thing is that the document contains all the necessary information, the organization's seal, and the sender's signature.
Any inaccuracy in the declaration may result in extended delivery times, delayed loading, prolonged storage in warehouses, and other unplanned expenses. Therefore, if you lack practical experience in foreign trade activities, it is best to turn to specialists. The experts at The Level Consulting will calculate possible duties and other payments, prepare documents, select a convenient method of delivery, etc.
Delivery Methods
The UAE is one of the leading global logistics and cargo delivery centers due to its convenient geographical location. Depending on the company's budget, it can choose transit by road, rail, sea, or air transport. It is also possible to build multimodal chains (combining different types of transfer under a single transport document).
When choosing a method of exporting goods from the UAE, one should consider not only the speed and cost but also the specific characteristics of the exported goods. Some types require special temperature conditions or storage conditions, which can only be provided by certain types of transport.
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