Dubai is home to more than 3.3 million residents. Tourism is also key element of the emirate, contributing to its development. Together, there is great demand for high quality packaged foods and commodities. To meet this demand, businesses often require a Foodstuff Trading License in Dubai, enabling them to legally import, export, and distribute food products. A lot of Food & Beverage establishments, including restaurants and star hotels (Dubai has the second-highest number of five-star hotels in the world) depend on foodstuff trading companies for regular supply of processed foods and raw, unprocessed commodities or green produce.

Because this requires a warehouse and also customers visiting you in person, you will have to set up a company on the mainland. Obtaining a Foodstuff Trading License in Dubai for a mainland company ensures you can legally trade and operate within the local market without restrictions. Free zones are not easily accessible from residential areas, which makes it difficult for B2C customers or residents of Dubai to come to you. In case you were planning to become a wholesale distributor, most B2B clients are located on the mainland and thus prefer to deal with foodstuff trading companies on the mainland. It is just more convenient for them. Even if you established your company in a free zone, you have to keep in mind that free zone companies are not permitted to operate on the mainland. This effectively cuts off the bulk of your client base, so the mainland is your only real option.

When you set up your foodstuff trading company on the mainland, you need a Local Sponsor. The Local Sponsor by law owns 51% of the business, so a good company formation specialist can help you set up your company in a 51:49 holding ratio. The Local Sponsor needs to be an Emirati (this is the term used to describe an UAE national, someone who is a citizen of the United Arab Emirates) who has attained the age of 21; or a company incorporated in the United Arab Emirates that is 100% owned by Emiratis.

The Local Sponsor is legally responsible for the company and represents it before all Government agencies. He/She can agree to a hands-off approach when it comes to running the company by handing over Power of Attorney to you, so that you remain in full control over your business. The Local Sponsor does not take home 51% of the profits. He/She can be compensated for his/her services on a monthly / quarterly / half-yearly / annual basis. Alternatively, he/she could take a percentage of the sales as his/her Local Sponsor Fee. This is why it is important to find the right Local Sponsor for your business, and a business setup consultant can help you in this regard.

How to Start a Foodstuff Trading License in Dubai, UAE

You will need copies of the following documents

Copies of the passports of all shareholders,
Copies of the pages where Residence Visa or Visit Visa is stamped for those already in the UAE
Emirates ID of those already in the UAE
No Objection Certificate from current Local Sponsor, if already in the UAE

Process

Submit three names for your business to the Department of Economic Development for approval
Get initial approval
Rent a commercial space (including warehouse) for your trading establishment
Submit the tenancy contract to the Food Safety Department of Dubai Municipality
Pay the charges involved and collect your Business License

You also have to submit a notarized Memorandum of Association as part of the application process. A company formation expert can take care of everything for you, so that you need not have to worry about anything.

Along with packaged or processed foods, you are also permitted to trade in the following

Mineral water
Soft drinks
Juices
Carbonated water
Snack foods
Sugar
Ghee
Vegetable oil
Eggs
Flour
Spices
Foodgrains and cereals
Fruits and vegetables, including potatoes

The Food Safety Department of Dubai Municipality carries out regular inspections to ensure that you adhere to best practices when it comes to handling and storage. To legally operate, businesses must obtain a Foodstuff Trading License in Dubai, which allows them to import, distribute, and trade food products while complying with strict safety regulations. Dubai Municipality’s Food Import and Re-export System (FIRS) also allows you to import foodstuffs from abroad for use in the United Arab Emirates, or re-export it to another country overseas. You need a Customs Client Code to help you clear the shipment, be it for import or re-export, and a business setup consultant can help you obtain one.

The Food Safety Department sees to it that the packaged foods are labelled correctly, as per Government guidelines. For some foods that have not yet been approved, you may be required to secure a certificate from Dubai Central Food Laboratory attesting that the food is fit for human consumption before it can be imported into the country or re-exported from the United Arab Emirates. To stay compliant with all regulations and requirements, food traders and establishments can refer to the Dubai Municipality’s official guidelines for detailed information on food safety standards, labeling rules, and import/export procedures.

For more details, get in touch with us.