How to Start Tea, Coffee and Spices Business in Dubai?
Trading of tea, coffee and spices is one of the oldest kinds of businesses that still exist today. UAE, the way it stands out as one of the major business destination in present times, has been no different in olden days. The archaeological surveys have proven UAE to be an important trading junction in ancient times as well with Dubai being an important hub for spices and tea trading. Today, Dubai has a population of more than 3 million which is comprised of just 15% native residents and 85% of expats. About 85% of the expat population or 71% of the total population is made up of Asian, primarily from India (accounting for 51%). Other Asians in Dubai are originally from Pakistan (17%), Bangladesh (9%) and the Philippines (3%). Coffee which has been one of the most favorite beverages of Arabs, tea for South Asians and spices, more or less, has been important part of cuisine for both Arabs and Asians, it is easy to figure out that importance of tea, coffee and spices trading in Dubai’s economy just cannot be ignored.
Retail is an integral part of various businesses conducted in Dubai. Entrepreneurs, looking to setup a business in Dubai of tea, coffee and spices, needs to make themselves aware of various important information. Like how to import or export from various suppliers and also need to gain right knowledge about which country is the best to buy or sell their products?
The Dubai Spice Souk is one of the most sought-after places in Dubai for purchase of all kind of spices. Traders, who have been active for many years here, have pretty well knowledge about importing and exporting their spices to various countries worldwide and also locally.
Market Opportunities for Coffee, Tea and Spices Trading in Dubai
Coffee and tea are popular beverages in different forms around the world. The inclination of people towards the consumption of coffee or tea is increasing day by day for all age groups. However, with growing health awareness among youngsters, we see people looking for options like green tea and herbal tea which in turn are creating new business opportunities in the Dubai.
Similarly, various spices and herbs, especially Indian spices are gaining popularity worldwide, because of their distinctive flavors, aroma and medicinal attributes. All these and many more trends proves that it’s a great time to setup a tea, coffee and spices business in iconic and cosmopolitan place like Dubai.
Some of the products to be considered for trading are as below:
- Specialty Coffee- Roasted, green, organically sourced coffee from certified producers
- Tea Varieties – Green tea, black tea and a variety of herbal teas
- Spices – Indian, Chinese, Mexican, Thai or any kind of special spices which could attract the expats living in Dubai where the population comprises of highest number of foreigners then the locals
Steps for acquiring a coffee, tea and spices license in Dubai mainland
All the 3 type of products can be traded under one license as they fall in the same group and type
- Coffee Trading
- Activity Group : Roastry
- License Type : Commercial
- Activity Description : Includes reselling coffee beans, whether in bulk or consumer packs
- Tea Trading
- Activity Group : Roastry
- License Type : Commercial
- Activity Description : Includes reselling tea, whether in bulk or consumer packs
- Spices Trading
- Activity Group : Roastry
- License Type : Commercial
- Activity Description : Includes reselling of dried, packed or preserved spices, whether as raw or after having been roasted, ground, blended or packed
This license needs to be an LLC where the 49% will be held by the expat and the 51% held by the UAE National.
Cost Details to obtain the license
| Particulars | Commercial License(AED) |
| Tradename Reservation | 620 |
| Initial Approval | 135 |
| NOC from Dubai Municipality | AED 1000 |
| Court Fees | Approx. AED 2000 |
| Final Submission | 116 |
| Market Fees | 2.5% of Annual Rent |
| License Fees | Approx. 17000 |
| Approval from Dubai Municipality |
Office Requirement
This license can be obtained only for a shop/office of minimum 100 sq ft which needs to be approved by the Dubai Municipality.
Process to obtain license for tea, coffee and spice trading
- First the trade name of the company needs to be selected and reserved to obtain the license
- Second, the NOC from the Dubai Municipality (DM) needs to be obtained; for which layout drawings of the shop requires to be submitted at DM. It is designed by the DM authorized Engineer
- Third, we need to submit the NOC to Department of Economic Development (DED) for the initial approval. Upon receiving the same, the MOA can be signed by the shareholders of the company in the Dubai Courts
- Final Payment Voucher will be generated in order to obtain the license
- Once the license is issued there will be remarks on the license and to remove that an approval from the Dubai Municipality is required
- An import and export code needs to be obtained from the Dubai Customs to buy and sell the coffee, tea and spices products from any part of the world
How to own 100% ownership on Coffee, tea and Spices Business in Dubai Free zone?
The retailing or wholesale business can be performed in any of the free zones in Dubai. However, the free zones are legally structured to perform business only in their particular zone or internationally. If an investor is planning to do any kind of operations in the local market then he will need to route his business only through a distributor.
The free zone gives you an advantage of 100% ownership but the drawback would be that you will not be able to expand your business directly in the local market with a free zone license.
The cost for the license in various free zones depends on number of visas required and the office space requirements. However the approximate cost for most of the free zone in Dubai is around AED 30,000 without the office cost. Choosing the right legal structure for your tea, coffee and spices business in Dubai and processing the documentation can be quite complicated, but a reputed and experienced business setup consultant can make the complete process hassle free and quick.
This blog written by Ms. Florine, Senior Business Advisor at Flyingcolour Business Setup, Accounting & Tax Services in Dubai & across UAE . Feel free to call us for more details. You can also send your inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366
