Guide to 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. To 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 the 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 Personal or Commercial License. For commercial License it is trading (import and export) license and also the 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) that are the two hassle free places to obtain an alcohol trading license. While it is possible to obtain a license in other emirates, 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 into 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 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. 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 economic 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 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 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 individual or corporate entity. The only limitation is Muslims cannot hold liquor license or act as a shareholder in a liquor trading business in Ras Al Khaimah whereas in Fujairah, both Muslims and non-Muslims allowed.
Now that we have understood how and where we can get the Alcohol trading License in UAE, below are listed other important information to keep in mind to understand the 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, 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.
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, kindly contact us at info@flyingcolour.com or call +971 4 4542366 for quality consultation.
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 update or change.
