How to Open a Retail Shop in Dubai 

How to open a retail shop in Dubai

Table of Contents

Opening a new store in a competitive retail environment can be intimidating, especially when you’re unfamiliar with the local market. To launch your retail shop in Dubai, it’s important to conduct thorough research on the cultural and business norms of your future customers and to consider ways to differentiate yourself from the competition. You should also find ways to stand out from the crowd so that potential customers will remember you and come back for more. 

What is a Retail Shop? 

Retail shops are commercial establishments that sell goods and merchandise to the general public. A retail shop can be a small business with a single location, or it can be a chain store that has multiple locations throughout a region or country. Retail stores can be found in many settings, such as shopping malls, strip malls, and downtown districts. Small businesses that sell mainly online are not considered retail shops.  

In general, retail shops can be categorized by their scale and focus: 

  • Small Scale: Specialty shops focus on a niche audience, offering unique products that can’t be found in other places. For example, there are dozens of ice cream parlors in New York City alone. 
  • Medium Scale: Department stores sell a variety of goods within one shopping experience. The goods sold at department stores range from clothes to electronics to books. 
  • Large Scale: Supermarkets sell all kinds of food under one roof, and are often open 24 hours a day. A Walmart Supercenter in the U.S., for example, is over 200,000 square feet (20,000 square meters) large and sells just about anything you could ever need. 

10 Easy Steps to Open a Retail Shop in Dubai 

10 steps to open retail shop in Dubai

Opening a retail shop in Dubai is not a simple task. It involves many legal requirements and documents that the shop owner must obtain. 

In order to open a physical retail shop, you will need to obtain the following: 

  1. Decide Your Business Type 
  2. Select a Location
  3. Get a Local Partner 
  4. Choose a Trade Name
  5. Complete All Paperwork 
  6. Get Permission from the Dubai Authority  
  7. Get a Retail Establishment License 
  8. Trade Name Registration 
  9. Get a Commercial Establishment License 
  10. Open a Business Account

1. Decide Your Business Type

decide business type

In order to open a retail business in Dubai, you need to select a type of retail business that would be profitable in your area. As there are many retail businesses to choose from, you should carefully decide which one would be best for you. 

The retail business type that you choose to Start a Business in Dubai will greatly depend on the kind of market you are entering. If you plan to open a single location store, then any retail business type is fine. However, if you are planning to launch a chain of stores, then you need to think carefully about which one would be the most effective in terms of customer service and profit margins. 

Retail business types are generally categorized into two groups: product-oriented and service-oriented.  

  • Product-Oriented Businesses sell physical products to customers who buy them for their own use. Examples of product-oriented businesses are grocery stores, department stores, clothing retailers, and furniture shops.  
  • Service-Oriented Businesses provide services to customers for their own use or for the purpose of reselling that service. Examples include restaurants, hotels, spas, hair salons, dentists’ offices, gyms, service stations, and gas stations. 

2. Select a Location

select suitable location for retail business

One of the most important factors that should be taken into consideration is the location of the shop. If you want to start a retail business in Dubai, make sure that it is located in a highly-populated area that attracts plenty of customers. The next thing to consider is whether you want to rent or buy a store. If you are planning to rent one, make sure that the lease agreement isn’t too expensive and doesn’t restrict your freedom when running your business. 

3. Get a Local Partner 

get a partner for your retail business

One of the biggest challenges facing new business owners looking to start retail shops in Dubai is finding a competent partner that they can trust with their success. A good business partner can make or break your company and its reputation, therefore, you must choose wisely if you want your shop to stand out from others and succeed where others have failed. 

4. Choose a Trade Name 

choose trade name for your retail business

Choosing a trading name is an important step in the business formation process. In addition to choosing a name that reflects your business and fits your goals, you also have to make sure that it’s not already taken. This is what we’ll focus on here because it’s the most important part of this process. The rules for trade names vary depending on where you live and what type of business you’re starting, but they all have one thing in common: they must be unique. 

5. Complete All Paperwork 

complete paper work of your retail business

There are three major documents that you need to complete before starting a business in Dubai.  

  • Trade license which gives permission to start the business in Dubai.  
  • A personal trade license is given to you after completing the trade license.  
  • Resident visa and this is the most important document. You can get a new visa every year. 

6. Get Permission from the Dubai Authority

Get permission from Dubai authority

The process of getting a retail shop on rent to start a business in Dubai is not as easy as it looks. There are several legal and technical formalities required to get a retail shop on rent. The first step is to get the shop allotted to you by the concerned authority/landlord/owner. In Dubai, the landlord can be anyone from the government or private individuals. 

  • The key document that is needed for getting a retail shop on rent is NOC (no objection certificate). It is a legal mandate that every building must have a NOC from the concerned authorities before it can be rented out to the general public. So, if you are looking for shops to rent make sure you have the NOC from your landlord. 
  • Another important document is MOA (Memorandum of Association). This document is also needed for getting shops on rent in Dubai before you can set up your own business in these shops. MOA states that any company has been registered with the government of UAE and describes its purpose of establishment. A copy of the commercial license must be attached with MOA as well. 

7. Get a Retail Establishment License

get retail establishment license

The first step is to apply for a trade license from the Dubai Chamber of Commerce & Industry. The application is available on their website and will require you to submit your social security number or VAT number if you have one, or your passport number and place of birth if you don’t. After submitting your application and paying the fee, you’ll be asked to provide details about the type of business you’re opening and why you’ve chosen that particular location. Your license request will be reviewed by government officials and then you’ll be contacted by a Chamber of Commerce representative who will make an appointment with you to review your application. If it seems like your application has been approved at this point, you might still be asked for more information or documentation before being granted a license. 

8. Trade Name Registration 

register trade name for your retail business

If you’re opening a retail shop, this step is optional but recommended because it allows you to open bank accounts with ease and opens up other financial options later on. 

9. Get a Commercial Establishment License

Get a commercial establishment license for retail business

First and foremost, you must have a clear vision of what you intend to do in your shop. You will need to be a registered trader in the Dubai Chamber of Commerce. This is mandatory and without it, you cannot get your license. 

As per the commercial shop’s license, one needs to get a Trade License from the Dubai Chamber of Commerce.  

Once the above-mentioned formalities are completed, you can begin your work on getting the Commercial Establishment License. This can be obtained from the Department of Economic Development (DED). To get this license, your shop should be located in a commercial area only. You will also have to pay an annual fee as well as a security deposit for this license. However, if you are selling non-perishable food items then you will not have to pay any annual fee or security deposit for this license. 

10. Open a Business Account

open business account for retail business

Businesses in Dubai, both foreign and local, should open a bank account. This is necessary for any retail business or even any business with a cash flow. Opening a bank account is not difficult; you just need to fill out an application and provide some identification. The bank will then instruct you on what documents you need to open the account. Businesses are allowed to open accounts in either dirhams or U.S. dollars. 

Read More: How to Start a Travel and Tourism Business in Dubai

Cost to Start a Retail Company 

Establishing a retail business in Dubai is not cheap by any means. You’ll need to consider the cost of hiring employees, renting retail space, and maintaining it, as well as transportation costs to get your products to your customers. However, there are considerable opportunities for growth and expansion here. The city has many government-supported initiatives that aim to develop the local economy by encouraging enterprise and innovation. In addition, Dubai has been getting more attention from international investors as its economy continues to grow and develop. 

To run a modest retail business in Dubai will require a fixed monthly expenditure of approximately AED 5,000: rent (AED 2,000), staff (AED 2,000), marketing & advertising (AED 1,000), and logistics (AED 1,000). Other expenses include insurance (AED 500) and basic equipment like chairs and tables (AED 1,000). These costs are per month and will vary depending on the selling season. 

Advantages of Start a Retail Shop in Dubai

Retail has always been one of the more viable business opportunities in Dubai. It doesn’t necessarily require a lot of capital, but it does require a bit of knowledge and a willingness to work hard. There are many advantages to starting a retail shop business in Dubai, such as: 

  • The city is home to some of the top shopping malls in the world, so there is already existing infrastructure for retail. 
  • The city also has a highly developed infrastructure for international trade, so you can connect with people from other countries easily. 
  • The government is very supportive of local businesses and therefore provides incentives for local entrepreneurs to start their own projects. 
  • The global recession might actually benefit Dubai, people have less money to spend and they are looking for affordable options. 
  • The retail industry is not just restricted to shopping malls, you can open up any kind of store from an office supply shop to a convenience store that sells basic necessities like bread and milk, etc. 

Summing Up: 

I believe that if you have the passion and talent behind your work, you should not let anything stand in the way of achieving success. You can find a way to contribute your skills to the world, no matter how it’s done or where it’s located. So, my advice is to pick a city with less competition and open there, to have a chance of success. A retail shop in Dubai is one of the best places to start. 

The popularity of Dubai as a retail destination is expected only to grow in the coming years, so there’s never been a better time for those interested in entering the retail business to set up shop here. 

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