Guide to Get Alcohol Trading License in the UAE

Get Alcohol Trading License In The UAE

A large expat population coupled with rising tourist numbers means alcohol is a big business in the UAE. Obtain a corporate or personal license for alcohol in UAE, it comes with its set of regulations and limitations. Before looking at how to obtain this license, let’s first understand its legalities for approval: The Legal framework governing the license is (the ‘Liquor Control Law’). There are various provisions related to the consumption, advertisement, and sale of alcohol in Dubai (e.g. Penal Code, advertisement laws, taxes and tariffs laws, etc.)

What Are The Types of Liquor Licenses? 

There are 4 types of liquor licenses:

• Type A: License to import liquor
• Type B: License to sell liquor to third parties from a shop or warehouse
• Type C: License to serve liquor within a hotel, club, or restaurant
• Type D: License to purchase liquor

Alcohol Trading License in the UAE

Now that we know the types of different alcohol licenses, we can sum it down to either a Personal or Commercial License. For commercial License, it is a trading (import and export) license and also a license to serve. The latter is solely reserved for bars, hotels and restaurants. For a Type A and B Alcohol license among the seven emirates, it is Fujairah and Ras Al Khaimah (RAK) are the two hassle-free places to obtain an alcohol trading license. While obtaining a license in other emirates is possible, the process can be far more complex and time-consuming.

To Choose Between Fujairah and RAK

Deciding on either Fujairah or Ras Al Khaimah will depend largely on the budget and the type of alcohol sales wish to be made. In Fujairah, one can set up a liquor trading company and get a license to sell alcohol as import and re-export. This license will not allow you to sell within the UAE. You may opt for a warehouse (leasing starts from AED 50,000*) for storage purposes or simply rent an office (starting from AED 20,000*) and import and re-export liquor products. However, you are not permitted to sell any alcohol on-site. A person of any religion (including Muslims) can register, and the cost is approximately AED 18,000*. In RAK, one can set up a liquor trading company along with an on-site shop. It allows you to sell alcohol in bars, restaurants and hotels – as well as to the general public from your licensed premises. Only non-Muslims can register, and the cost is around AED 4.14 M* including a 4 M* deposit. NOC for trading in alcohol needs to be obtained by the Ras Al Khaimah Tourism and Development Authority.

Application and Guidelines

Setup Procedure: As discussed earlier among all seven Emirates RAK and Fujairah are the easiest to obtain the license. To obtain this license in RAK one must first register their business and apply for a general trading license in Dubai, which allows for the import and export of alcohol. The next, step is to apply directly to the RAK Tourism Board for your liquor license. In Fujairah, no external approvals are there as you can directly apply for a Liquor license.

Costing: The most economical entity to get this license is Fujairah. License application here costs AED 110,000* including an AED 50,000* refundable security deposit. Total setup including office space and two visas costs will be AED 180,000*. RAK the cost is a little towards the higher end. As the RAK license allows you to sell alcohol from the premises, there is a payment of AED 4m* to the RAK Tourism Authority for approval – which along with the general trading license and warehouse lease puts the total setup costs at around AED 4.14m*.

Share Capital: While the setup costs may differ between Fujairah and RAK, however, there is no minimum share capital requirement.

Limitation on Shareholders: It is possible to set up a liquor trading company with multiple shareholders – which can either be an individual or corporate entity. The only limitation is Muslims cannot hold liquor licenses or act as a shareholder in a liquor trading business in Ras Al Khaimah whereas in Fujairah, both Muslims and non-Muslims are allowed. Now that we have understood how and where we can get the Alcohol trading License in UAE, below is listed other important information to keep in mind to understand the

Benefits of Having an Alcohol Trading License in The UAE

1. Legal Business Operations

If you have a valid alcohol trading license, then only you can run your business without worrying about legal issues. It gives you official approval to import, store, and sell alcohol within the rules of the UAE. 

2. Access to Market

The demand for alcohol is high due to foreign visitors. It has created demand for licensed retailers, hotels, and restaurants for alcoholic beverages. 

3. Opportunity for Partnership 

You can make a partnership with International alcohol brands, local distributors, hotels, and event planners if you have a legal alcohol license. 

4. Flexible Business Options 

You can choose to focus only on the import and re-export if you have a proper license. Additionally, you can also sell directly to customers through licensed outlets.

UAE Alcohol Market

Custom Tariffs: The customs duties for alcoholic products on Cost, Insurance, and Freight (CIF) value vary depending on the port of entry in each Emirate. For example, Dubai has a 50% duty. Also, each Emirate adds a sales tax on alcoholic beverages

Sale of Alcohol in Grocery Stores, Supermarkets Or Restaurants: No sale of alcoholic beverages is allowed in general spaces such as grocery stores, supermarkets or any other restaurants that are not authorized to sell or serve alcohol.

Emirate in the UAE that does not permit the sale of Alcohol: Sharjah is the only Emirate where trade and consumption of alcohol are strictly forbidden. Following are the two exceptions in Sharjah: Sharjah Wanderers Sports Club and Duty-Free store at Sharjah International Airport.

Local Production of Alcoholic Drinks in the UAE: There is no production of alcoholic drinks in the UAE, and hence all brands are imported, especially the internationally known brands.

Advertising and Promotional Activities: Due to religious sensitivity, public advertisement is not permitted.

Media Platforms that are not allowed for Promotional Activities: Any public media platform such as newspaper, or mass media is strictly prohibited. Display of product names, brands and pictures of alcohol are also now allowed in the UAE. Window display at the licensed stores is also not permitted.

Mistakes to Avoid When Obtaining an Alcohol Trading License in the UAE

1. Selection of Unsuitable Emirate 

Every emirate has different regulations. Fujairah is ideal for importation and re-exportation, but you cannot sell directly to customers on-site (as that differs from the tourism requirements). RAK, you can sell on-site, but it is more expensive and has more rules. Choose wisely based on your business plan. 

2. Lack of Necessary Approvals

Some licenses require approvals to be obtained from other local authorities, particularly in RAK, the RAK Tourism and Development Authority. Ignore these, and you will receive a letter of rejection.

3. Not Considering All Costs

Consider more than just the license cost. You must also pay for deposits, warehouse storage rent, visas, renewals, etc. Forgetting about these can lead to more money issues later down the line.

4. Ignoring Regulations

Selling alcohol if the customer did not produce ID, moving it with no permit, and storing it incorrectly are all examples of breaches that can lead to large fines or losing your license.

Frequently Asked Questions (FAQs) About Guide To Get Alcohol Trading License In The UAE

1. Who can apply for an alcohol trading license in the UAE?

If you are in Fujairah, then both Muslims and Non-Muslims can apply for a license. In Ras Al Khaimah, only non-Muslims can apply for the license. The applicants are eligible   21 years old. 

2. For what time is the alcohol trading license valid?

Most of the alcohol trading licenses in the UAE are valid for one year. You have to renew before the expiry of the license to avoid business disruption. 

3. Can I sell alcohol in any country in the UAE with my license?

No. You can only sell in areas allowed by your license. RAK licenses permit only on-site sales, but Fujairah, for example, is mainly for import and re-export only.

4. Can I produce alcohol in the UAE?

No. There is no production of alcohol in the UAE. All alcoholic drinks are imported from overseas.

5. Can I promote alcoholic drinks in the UAE?

There are religious and cultural views towards the sale of alcohol in the UAE, and, therefore, no alcohol advertising is permitted in any form in newspapers, on billboards, or social media.

This blog is written by Ms. Nirmala, Business setup consultants at Flyingcolour Business Setup, VAT and Accounting Services, Dubai.

For more information on getting an alcohol trading license in the UAE,Book a free consultation with one of the Flyingcolour Business Setup team advisors. 

Please Note: This article was published on 22nd August 2020. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent updates or changes.