How to open a retail store in Dubai

The United Arab Emirates is a promising country for developing retail business. Its citizens have high purchasing power. One of the main business hubs in the country is Dubai. Its enormous shopping centers impress with their scale, luxury, and variety of goods. Here you can find products from all famous world brands. The emirate offers excellent prospects for developing retail business, but to achieve success, it is necessary to know the specifics of local legislation. Let's figure out how to open a retail store in Dubai correctly and quickly.

Advantages of Doing Business in the UAE

Alongside other goods, luxury items, expensive clothing from the most prestigious brands, and other premium class products are in demand in the UAE.

There are other advantages to doing business in the United Arab Emirates:

• Geographic location - it is a major logistics center for global trade;
• Economic stability;
• Favorable tax policies of the state;
• Developed internal logistics;
• High level of banking services.

All of this makes opening a business in the UAE attractive.

Step-by-Step Guide to Opening a Store

Establishing a company in the United Arab Emirates is a complex process. Trading relations for citizens of other states are regulated by UAE legislation - from registration to running an advertising campaign. It is necessary to take into account a number of specific features. Let's consider step-by-step actions needed to open a retail store in Dubai.

Step 1. Developing a Business Plan

To ensure that your business decision is not a failure, it needs to be carefully thought out. You need to research the market, determine which products are in demand, understand the level of competition, and find out the prices of competitors. It's important not to duplicate, find your own niche that interests buyers, and organize an advertising campaign competently.

It is important to note that all goods imported into the United Arab Emirates must undergo mandatory certification. The products must comply with the standards and technical regulations of the state, and for some items, separate testing and additional permits will be required.

It is necessary to determine the procedure for procurement, transportation, and storage in advance, find trusted suppliers and transporters. By planning out the business plan, you can start its implementation.

Step 2. Choosing a Location

For successful trading, it's important to choose a competitive location with a large flow of customers. Undoubtedly, the best option would be the largest and most prestigious shopping centers in Dubai - Dubai Mall, Dubai Hills Mall, Mall of Emirates, Deira City Center, Mirdiff City Center, Ibn Batuta Mall, Marina Mall. These complexes resemble small cities in size, and the number of visitors corresponds accordingly.

Dealing with Developers

To rent a space, you need to contact the developer - the owner of the chosen retail space. This way, you will get information about the availability of vacancies for opening a retail store. Be prepared to wait - in the emirate's shopping complexes, there is often a queue of contenders for available spaces. Progress in it depends on the amount of the deposit. It can range from 50 to 100% of the rental fee.

Rental Costs

The cost of rent depends directly on the fame and prestige of the mall - in large complexes, it is very high, up to $1,700-2,000 per square meter. To open a medium-sized retail store, you need about 500 square meters, so the rent for one year will be around $1 million. The price varies depending on the internal location of the store - places close to the entrance are the most sought after. In addition to rent, you must pay 10% of its cost for a license, RERA fee (a subdivision of the Dubai Land Department), various deposits, and permits.

If you are not ready for such expenses, you will have to look for smaller-scale retail space with an acceptable price. The stage ends with the signing of a lease agreement.

Step 3. Finding a Local Partner

To open a retail store in Dubai, it is necessary to properly prepare a package of documents. The legal procedure can take from two weeks to three months. The volume and type of documents depend on whether the trade is oriented to the domestic or external market. For the domestic market, there are two options for opening a trading company:

free economic zone. An expatriate has the right to full ownership of the company;

local business. A mandatory condition will be the participation of a co-owner - a UAE citizen, and the local partner must own 51% of the business ownership rights.

So, to open a retail store in Dubai, it is necessary to find a co-owner-sponsor with local citizenship - of course, for a fee. At the same time, only his permission to put his name on the paper and signature will be required. The annual payment for such services depends on the level of business, and a successful retail store's local sponsor can receive over $7,000. His role remains nominal, he does not participate in management, but it is advisable to additionally consult a lawyer on this issue.

The stage ends with the signing of the founding agreement.

Step 4. Obtaining a Trade License

In Dubai, all types of activities are licensed. A license is the main statutory document that requires annual renewal. Its cost varies for different types of businesses. The licensing fee is a significant component of annual expenses. There can be two types of trade licenses:

• General license: It grants the right to trade in any goods.
• Limited license: It allows selling only a specific category of goods.

The size of the licensing fee depends on the rental fee, including 10% of the retail store's rental fee plus an additional annual amount. For example, if you rent 500 square meters in one of Dubai's leading shopping centers and the rent is $1 million, then the trading permit will cost around $120,000. These are just approximate calculations; the product group and other criteria matter.

Step 5. Payment of Utilities

After obtaining the license, it is necessary to conclude agreements with utility services - for electricity supply, telecommunications, and other services necessary for the normal functioning of the store. Their payment will cost around $3,000.

In most cases, the local sponsor has a public relations officer who is familiar with the nuances of local bureaucracy and can help solve such problems.

Step 6. Additional Permits

According to the emirate's laws, almost any action of the retail store owner requires additional permits. They need to be obtained in advance for any construction work to remodel the store, repair and decoration, installation of advertising signs, and other actions. Before taking any action, you need to prepare a project of changes on paper and submit it to the relevant authority for preliminary approval and consent. Be prepared that the cost of the permit will be significantly higher than the cost of the work itself.

For example, the manufacture and installation of a decorative element will cost the owner $1,000. But even before manufacturing, it is necessary to obtain permission for these actions, which will cost $2,000. If you rely on chance and make any changes without prior agreement and payment, then in case of violation detection, you will have to pay a fine of around $15,000.

Step 7. Staffing

After assembling the necessary documents, obtaining a license, concluding agreements for utility services, and fully equipping the store, you can start recruiting staff. It is necessary to carefully consider the number and composition of the staff and formulate qualification requirements.

The emirate's government has set certain conditions for hiring employees. Each employee must be issued a labor visa, the issuance of which takes from two to five days, and a contribution of $2,200 must be made.

The staffing process can be handled by a public relations officer working for your local investor. Another option is to turn to professional recruiters who take on the search for employees according to your qualification requirements, as well as visa processing.

Advertising and Product Promotion

To open a retail store in Dubai, it is necessary to expend a lot of effort and invest significant funds. However, all this will be in vain without a well-thought-out advertising campaign and store promotion system. Marketing research will help determine which channels will be most effective in attracting the target audience. It is necessary to maximize the use of all available forms of advertising, but with mandatory compliance with the norms of local legislation, which pays considerable attention to consumer rights protection.

Advertising Requirements

The requirements for design start with price tags, which must be easily and clearly distinguishable and carry information in two languages - English and Arabic. Both languages ​​are used in the design of signs, banners, and other advertising materials. At the same time, the information in Arabic must constitute at least half of the total text volume. It is placed in the foreground - at the top or to the right. The English translation can be placed nearby. In addition to language requirements, there are other mandatory ones:

• Advertising activities must be specified in the license;
• Permission from the Department of Economic Development (DED) is required for advertising installation;
• A sketch with dimensions, the proposed location, and other data must be provided;
• A photo of the planned advertising location is attached;
• The information and design must comply with Islamic norms;
• Safety measures must be observed during installation - banners cannot be installed on windows and balconies, and large signs cannot be placed next to roads;
• After the permit or license expires, the advertisement must be removed.

Conducting Sales

A retail store also requires DED Dubai permission to hold sales. A set of rules has been developed that must be followed:

• The allowable discount range is 25-75%;
• The price of the product before and after the discount must be indicated on the price tag;
• At least two weeks must pass between two promotions.

Turn to Professionals

Opening a business in another country is a difficult task. It becomes more complicated if it involves a country with a mentality significantly different from the familiar one. In this case, it is necessary not only to thoroughly study the legislation but also to know the local market and competitive environment, possess important nuances of business and personal relationships.

To open a retail store in Dubai quickly and legally impeccable, turn to qualified specialists from The Level Consulting consulting company. A team of experts with years of business consulting experience offers a full range of services and support at every stage of the company's development. We know how to solve complex financial and legal tasks with minimal costs and in optimal timeframes.