The United Arab Emirates (UAE) is renowned for its equestrian culture, with a growing community of passionate horse riders and enthusiasts. As this community continues to thrive, there are lucrative opportunities for entrepreneurs looking to venture into the equestrian market.
In this article, I will offer a list of valuable links and resources for you to legally import and sell equestrian products in the UAE. Before we begin, if you are considering starting an equestrian business, you may also find these other articles of interest:
- The guide to building and launching your equestrian e-commerce, where I cover each step of creating your e-commerce from scratch.
- 7 ideas for an equestrian business, which can provide you with a comprehensive overview of other possible businesses in the equestrian world.
Here’s the topic summary of this guide:
UAE business license: Free zones vs Mainland
One of the initial steps on your journey to establishing an equestrian e-commerce business in the UAE is obtaining the necessary business license. Depending on your business model, you can choose between setting up in the UAE mainland or one of the many free zones. Each option has its unique benefits and regulations.
What is a free zone?
A free zone in the United Arab Emirates is a designated geographic area within the country where foreign businesses can establish a presence with certain advantages and incentives. These free zones are designed to attract foreign investment and promote economic diversification by offering a business-friendly environment. Each UAE free zone may have its specific regulations and benefits, making it essential for businesses to choose the one aligning most closely with their industry and needs. Notable free zones in the UAE include the Dubai Airport Free Zone, Jebel Ali Free Zone, and the Abu Dhabi Global Market (ADGM).
Advantages of a free zone business license:
- 100% foreign ownership: One of the primary attractions of UAE free zones is that they allow foreign investors to own 100% of their businesses without the need for a local partner.
- Tax benefits: Most UAE free zones offer tax exemptions for a certain number of years, which may include exemptions from corporate and personal income taxes.
- Customs benefits: Businesses operating within free zones often benefit from customs exemptions and easier import and export procedures.
- Full range of business activities: Many free zones cover a wide range of business activities, from trading and manufacturing to services, making them suitable for various industries.
- Simplified licensing: Setting up a business in a free zone is typically faster and involves less bureaucracy compared to the mainland. Free zones often have dedicated authorities to streamline the registration and licensing process.
Some disadvantages of a free zone business license:
- Limited operational scope: Businesses with a free zone license are typically restricted to conducting their operations within the free zone itself. If they want to do business outside of the free zone or with companies on the UAE mainland, they may need to work with a local distributor or set up a separate entity.
- Customs restrictions: While free zones offer customs benefits, such as exemptions from import and export duties within the free zone, there may be restrictions on moving goods in and out of the free zone to the UAE mainland or other free zones.
- Ownership constraints: While free zones allow 100% foreign ownership, there may still be restrictions on certain activities or industries in some free zones. Additionally, some free zones require companies to have a local service agent, although the agent does not own a share of the business.
- Limited access to local market: Free zone companies may have limited access to the local UAE market, as they are primarily intended for international business operations. This can be a disadvantage if a business’s primary target market is within the UAE.
- Market Competitiveness: Depending on the industry, a free zone business may face intense competition from other companies with similar business models and the same advantages.
It’s important for equestrian businesses to thoroughly research and understand the specific regulations and limitations of the free zone they are considering, as well as to assess how these cons may impact their business model and objectives. In some cases, a mainland license may be a more suitable option for certain businesses in the UAE.
What is a mainland business license?
A mainland business license in the United Arab Emirates (UAE) allows a company to operate its business activities within the jurisdiction of the UAE mainland, as opposed to a free zone. Unlike businesses registered in free zones, mainland businesses have the flexibility to operate and trade directly with the local UAE market and with other businesses within the UAE.
Advantages of a mainland business license:
- No Geographic Restrictions: Mainland businesses can set up and operate anywhere within the UAE, giving them greater geographic flexibility compared to free zone companies, which are typically confined to their specific free zone location.
- No currency restrictions: Mainland businesses can transact in UAE Dirhams (AED) without restrictions, which can be beneficial for local business dealings.
- Flexibility in office location: Mainland businesses have more flexibility in choosing their office location, allowing them to be closer to their target markets or relevant business hubs.
Disadvantages of a mainland business license to import your equestrian products:
- Local Sponsorship: One of the primary differences between mainland and free zone businesses is the requirement for local sponsorship. In the UAE mainland, a local sponsor, who is a UAE national or a company wholly owned by UAE nationals, is typically required to hold a certain percentage of the company shares (usually 51%). However, the terms of the partnership can be detailed in a side agreement that specifies the rights, obligations, and financial arrangements between the foreign business owner and the local sponsor.
- Complex legal agreements: To protect your interests as the foreign business owner, you’ll need to draft comprehensive legal agreements with your local sponsor. These agreements can be complex and may require legal assistance, which can add to the initial setup costs.
- Regulatory requirements: Mainland businesses in the UAE are subject to local labor and immigration laws, which may involve complex visa and labor sponsorship requirements. Compliance with these regulations can be challenging and requires vigilance.
- Higher operating costs: Operating costs in the UAE mainland can be higher than in free zones, as businesses may need to rent office space, hire employees, and cover other expenses in accordance with local regulations.
It’s essential for new entrepreneurs to carefully weigh the pros and cons of mainland business licenses in the UAE and to conduct thorough due diligence before making a decision. Many businesses consult with legal and business advisors to navigate the complexities and mitigate potential challenges associated with operating in the UAE mainland.
The list of free zones in the UAE
In the UAE, as of 2023, there are more than 20 free zones to choose from, each with its unique characteristics. For example, some may be more oriented toward digital service businesses, while others are geared toward wholesale or manufacturing. Here’s a list of the most renowned ones:
Dubai Airport Freezone (DAFZ)
Dubai Multi Commodities Centre (DMCC)
Hamriyah Free Zone (HFZA)
Ajman Free Zone (AFZ)
Dubai International Academic City (DIAC)
Dubai South
Dubai silicon oasis (DSO)
Dubai Healthcare City (DHCC)
Fujairah Free Zone (FFZA)
Khalifa Industrial Zone (KIZAD)
Dubai Knowledge Park (DKP)
Dubai Design District (D3)
Abu Dhabi International Airport (ADAFZ)
Dubai Science Park (DSP)
Dubai Maritime City
Dubai Industrial City (DIC)
Ras Al Khaimah Economic Zone (RAKEZ)
Jebel Ali Free Zone (JAFZA)
Masdar City’s free zone
Sharjah Free zone (SAIF)
Sharjah Publishing City (SPCFZ)
Setting up your free zone business license
To set up your business license in a free zone, allowing you to import and sell equestrian products in the UAE, all you need to do is follow the online registration process on the website of your chosen free zone.
Based on my personal experience, I highly recommend handling this registration process on your own. In most cases, it’s relatively straightforward, and the free zone authorities are readily available to provide all the necessary information. I personally became entangled with a company that offers business setup services, and I had a very negative experience. Not only did I end up paying more than the standard free zone fees, but I also dealt with individuals who often didn’t fully understand the requirements of the free zone and significantly increased the cost for the following year’s renewal. Once you enter into these contracts, it can be challenging to extricate yourself from them unless you choose to close your license. For these reasons, I strongly advise direct interaction with the free zone authorities rather than intermediaries.
The setup process, in most cases, can take between 5 and 15 days (depending on visa requirements, etc.).
Following the setup, you will also need to open a business bank account with a bank of your choice.
The common requirements to setup a free zone business license are the following:
- List of business activities: A detailed business plan outlining your company’s objectives, operations, and financial projections may be required.
- Business Name: You need to choose a unique and approved business name.
- Legal Structure: Decide on the legal structure of your business, whether it’s a sole proprietorship, partnership, limited liability company (LLC), or any other suitable structure.
- Premises: You may need to secure an office or warehouse space within the chosen free zone, which can vary in size and cost depending on the free zone and business activity.
- Local sponsor or agent: In some free zones, you might require a local sponsor or agent. The specific terms and requirements for the local sponsor may differ based on the free zone and business activity.
- Share capital: The required minimum share capital can vary depending on the business type and location. It’s essential to check the specific requirements of your chosen free zone.
The documentation required:
- Passport copies: Passport copies of all shareholders and the appointed manager.
- Proof of address: Proof of the residential address for all shareholders and the manager.
- No objection certificate (NOC): Some free zones may require a No Objection Certificate from your current employer (if applicable).
- Application forms: Complete the application forms provided by the chosen free zone authority.
Some other documentation may be required depending on the free zone, the nature of the business, and the chosen legal structure.
The costs associated with obtaining a trading license in a free zone:
- Registration Fee: This is a one-time fee for the initial registration of your company in the free zone.
- License fee: An annual license fee to maintain your business license.
- Office or warehouse rent: Costs associated with leasing a physical space within the free zone, if required.
- Visa Fees: If you need to sponsor employees for UAE residency visas, there are associated fees for each visa.
- Local sponsorship fees: If a local sponsor or agent is required, their fees will vary.
- Miscellaneous costs: These may include legal and administrative fees, trade name reservation fees, and other expenses.
Where to register your Mainland business license
Setting up a company in the UAE is a straightforward process in all seven emirates. You have a few options: you can go to the Department of Economic Development in the emirate where you want to start your business in person. Alternatively, you can use online platforms to apply for a commercial license and set up your company quickly with the right documents. Another choice is to use legal offices or specialized companies that help you start a business. To establish your company, you usually need to pick a location, describe what kind of business it is, and pay the required fees to get your commercial license.
You can apply online for your mainland trading license at one of these links:
- Department of Economic Development in Abu Dhabi
- Department of Economic Development in Dubai
- Department of Economic Development in Sharjah
- Department of Economic Development in Ajman
- Department of Economic Development in Umm Al Quwain
- Department of Economic Development in Ras Al Khaimah
- Fujairah Municipality
On the Ministry of Economy’s website, you can find a user-friendly infographic and all the information on how to establish a company, comparing free zones and the mainland.
Registering your equestrian trade name
Your brand is your identity in the market, and registering your trade name can provide several advantages. A registered brand gives you legal rights to your brand name, ensuring that no one else can use it. This step adds a layer of protection and exclusivity to your equestrian products. Registering your brand can also instill trust in potential customers who recognize your brand as an official and trustworthy entity.
You can check a business name availability on the ministry of Economy website and register the chosen name for the UAE market on the DED website.
You can also decide to register your trade name in all the GCC countries (Gulf Cooperation Council) and extend intellectual property protection to Bahrain, Kuwait, Oman, Qatar, Saudi Arabia. At this link you can find all the needed information about registering a brand in the GCC.
Required authorizations based on product categories
The equestrian market encompasses a wide range of product categories, from saddles and riding apparel to equine nutrition and care products. Depending on your product offerings, you may need specific authorizations or certifications to ensure compliance with local regulations. For instance, products related to horse health and nutrition may require approvals from the UAE’s food ministry, while safety gear like helmets and protective vests could be subject to different certification processes. It’s crucial to thoroughly research and understand the authorization requirements related to your specific product offerings.
The service provided at the link above involves the approval of animal feed and food items for importation in the UAE, adding them to the approved list. This list encompasses various categories, including:
- Manufactured animal feed
- Feed additives
- Nutritional supplements
- Pet animal food
- Food for animals not included in the food chain
- Foods and nutritional supplements for honeybees
- Processed aquatic food
- Unprocessed aquatic food
Service fee: 300 AED
Documents required: The list of documents necessary for the approval of animal feed or supplements can be extensive. This is due to the UAE’s strict regulations, which are in place to ensure the quality and safety of imported feed for the well-being of horses and other animals. Given the complexity of this process, you may consider seeking assistance from an expert. Fortunately, there are numerous agents that provide business services to assist with the registration of animal food.
As for the animal feed, also and especially for veterinary products is required to receive the necessary approval and certification, in this case, from the Veterinary Products Registration Committee.
Service fee:
The fees for various veterinary-related services are as follows:
- A fee of 2,500 AED is applicable for a five-year certificate of registration issuance or renewal for a veterinary preparation.
- A fee of 3,000 AED is required for a request for the analysis or reanalysis of a veterinary product.
Documents required: The complete list of necessary documents is provided on the MOCCAE website via the link above.
Is the process of adopting veterinary disinfectants, diagnostic materials, equipment, devices, supplies, and animal care products for import in compliance with the conditions stipulated in Federal Law No. 9 of 2017 regarding veterinary products.
Service fee: None
Documents required:
- The product label in either Arabic or English, or product specifications (catalog).
- Certificate of analysis for disinfectants and animal care products.
- A valid certificate of free sale from the country of origin, issued by the relevant authorities or its equivalent, for disinfectants and animal care products.
Safety riding products
Riding helmets, jackets, or any other equestrian gear designed to enhance the safety of riders and horses must undergo necessary certifications before being made available to customers. Several international and regional organizations, including the European Union, the United States, and Australia, have established safety standards for equestrian equipment. These standards outline specific design, material, and testing requirements to ensure the safety and efficacy of these products. Many suppliers offer attractive products at competitive prices, but some of these products may lack the essential safety certifications, prioritizing aesthetics over safety. In today’s market, adherence to common safety standards is imperative to ensure product quality. Here is a list of some renowned safety certifications for products sold worldwide:
CE Marking (European Union):
In the European Union, horse riding helmets and protective jackets must often bear the CE mark, which indicates that the product complies with EU safety standards. For example, riding helmets usually conform to EN 1384 or VG1 standards.
ASTM (United States):
In the United States, the American Society for Testing and Materials (ASTM) has developed safety standards for equestrian helmets (ASTM F1163) and equestrian protective vests (ASTM F1937). Products meeting these standards are widely accepted as safe for use.
SEI Certification (United States):
The Safety Equipment Institute (SEI) provides certification for equestrian safety equipment in the United States. SEI-certified helmets and vests have passed rigorous testing to ensure they meet safety standards.
AS/NZS (Australia/New Zealand):
In Australia and New Zealand, equestrian safety gear must meet the AS/NZS 3838 standard for helmets and other relevant standards for protective vests and jackets.
ISO Certification:
The International Organization for Standardization (ISO) also plays a role in developing safety standards for various products, including equestrian gear. ISO standards ensure that products are safe, reliable, and of high quality.
Importing products in the UAE – Customs
The first step in legally importing equestrian goods for your business is to register with customs and obtain your customs code. Depending on the location where your items will arrive from abroad, such as if your warehouse is in Jebel Ali, the port or airport of destination will likely be in Dubai. In this case, you need to register with the customs authority of the relevant Emirate of destination.
For Dubai customs registration, you can easily complete the registration process online, which is divided into three simple steps. First, fill out the application, then pay the service fee of 100 AED, along with a 20 AED knowledge and innovation fee. Your customs code will be sent to you via email within a few days. The necessary documents for this process include your trade license, a copy of the authorized person’s passport, and, for courier services, the Emirates Post license. It’s important to note that the business code needs to be renewed annually, or it will be suspended if not renewed within 60 days of its expiry date.
For Abu Dhabi customs registration, the procedure is quite similar. You can obtain your customs registration number on their website. Likewise, you will need to provide the authorized person’s passport or Emirates ID, a copy of the trade license, and a tax certificate if applicable. The service fee is 100 AED.
Clearance of Goods
Once you obtain your custom code, you are legally enabled to import and export goods to and from the UAE. Once your equestrian products reach the port or airport of destination in the UAE, it will be required to be cleared before being delivered to the warehouse.
Through the authorized person you will need to provide a range of documents to customs authorities, including the commercial invoice, bill of lading, packing list, and your customs code. These documents are essential for customs officials to verify the legitimacy of the goods and their value. Customs authorities may also inspect the goods to verify that they match the information provided in the documentation. This can include physical inspections, sampling, or other methods of verification.
Customs authorities will determine the applicable duties and taxes based on the classification of the goods, their value, and their country of origin. Importers are responsible for paying these fees. In some cases, customs duties can be substantial, and importers often work with customs experts to ensure compliance and minimize costs.
Once the goods are cleared and any necessary duties and taxes are paid, the goods can be transported to their final destination, whether it’s a warehouse, distribution center, or retail store. Proper transportation and delivery arrangements are crucial to ensure the goods reach their destination without issues.
The clearing process is essential for regulating international trade, ensuring the proper collection of customs duties and taxes, and preventing the illegal movement of goods. It can be a complex and time-consuming process, particularly for businesses engaged in international trade. Many companies rely on customs brokers and experts to navigate the complexities of customs clearance and ensure compliance with all relevant laws and regulations.
In summary
In summary, the UAE’s dynamic equestrian market presents attractive opportunities for entrepreneurs seeking to import and sell equestrian products. However, entering this market necessitates thoughtful attention to regulatory and legal aspects. Acquiring the appropriate business license, registering your brand, obtaining product authorizations, and successfully navigating the customs process are all vital components to initiate your equestrian e-commerce venture in the UAE.
I trust you have found this article valuable in your pursuit of importing and selling equestrian products in the UAE. Please share your experience in the comments below.
