Business

How Do You Start a Cosmetics Business in Dubai?

UAE is the biggest market for cosmetics and personal care products among all the Middle Eastern countries, and within the UAE, Dubai is the major contributor to this industry. It is already known that Dubai is a beautiful location to start a business, with its excellent infrastructure and business-friendly policies. The cosmetics industry is rapidly growing in the UAE, and Dubai, being a tourist hub, has become a major market for cosmetics and personal care products. With thousands of tourists visiting Dubai every year, the demand for cosmetic products is everlasting. This is the right time to grab this opportunity and start a cosmetics business in Dubai. This blog provides an overview of the cosmetics industry in Dubai and the benefits of a Cosmetics business setup in Dubai. It also describes the process, required documents, and costs involved in starting a cosmetics business in Dubai.

Emerging Trends in the Dubai Beauty and Wellness Sector

In the past few years, various new trends have emerged in the beauty and wellness industry of Dubai. Kindly have a look at these latest trends to get an insight into the Dubai cosmetics industry.

• There has been a growing demand for natural and organic products in Dubai.
• Men’s grooming products are also one of the most sought-after products in the Dubai market.
• Spa market
• Halal skincare and beauty products
• Customized goods and services
• Products and services under cosmetic surgery include micro blading, laser treatment, botox, and fillers.

Reasons to Start a Cosmetics Business in Dubai

There are several benefits associated with a cosmetics business setup in Dubai like the millions of tourists visiting every day, low tax rates, international exposure etc. Below is a detailed explanation of the advantages of a cosmetics business setup in Dubai.

Tourist Hub

Dubai is a hub of tourists, and an enormous number of people from around the world visit Dubai every year. It provides a lucrative opportunity for business owners and entrepreneurs to start a cosmetics business in Dubai.

Multiple Cultures

With millions of foreigners being settled in Dubai, it is a city having people from multiple cultures. And with different cultures and different nationalities, everyone has a unique taste in cosmetics. So, there is a large space for business owners and investors to operate their cosmetics business in Dubai.

Quick Business License

If you are a foreign entrepreneur or business owner, then you would know the struggles of starting a business in a foreign country. It involves various struggles including obtaining a business license to conduct your business operations in that country. In Dubai, there is a simple process with minimum restrictions for foreign entrepreneurs to obtain their business licenses. You can easily obtain your business license by applying to the Department of Economic Development or the relevant Free Zone Authority based on your selected business location.

Different Business Locations

In Dubai, you have the option to start your cosmetics business in various locations such as the free zones, mainland and offshore. You can commence your cosmetics business setup in Dubai as per the requirements and strategies of your business. Every location has its own benefits and limitations. You need to decide what is most suitable for your business. If you set up your cosmetics business in the Dubai free zone, then you can enjoy 100% ownership, full exemption on taxes and 100% repatriation on profits, while, on the other hand, the mainland provides you with the freedom to expand your business operations in other markets of UAE without any restrictions.

International Exposure

After setting up a cosmetics business in Dubai, you will have one foot in the international market. It provides you with an easy doorway to other internal markets. A cosmetics business setup in Dubai not only establishes you as an international brand but also helps you expand your business operations to other emirates like Qatar, Oman and Bahrain. As you are recognized as an international cosmetics brand, it automatically builds your positive image in front of your customers and investors.

Low Tax Rates

One of the best advantages of starting a cosmetics business in Dubai is the low tax rates applied in the UAE. You don’t have to pay any corporate taxes and the VAT rate is also very low, i.e., only 5%. The VAT of 5% is only applied on the goods sold within the territory of the UAE and for the goods sold outside its territory, no VAT is applied.

Government Support

The Government of UAE has passed various business favourable policies to encourage and support foreign investors and entrepreneurs. Moreover, Dubai has a quick and easy registration process that will aid you in launching of new cosmetic products in the market. 

Essential Guidelines for Cosmetics Business Setup in Dubai

Prior to starting a cosmetics business in Dubai, you should read the following guidelines provided by the Public Health and Safety Department.

• You should categorise your cosmetic product based on its use, i.e., whether it should be used to perfume, to clean or to modify an individual’s appearance.
• You need to register your business with the Dubai municipality as a manufacturer, importer, distributor or seller of a cosmetic product in Dubai. This is also important from the perspective of obtaining a business license from the Department of Economic Development. For example, if you are a seller of cosmetic products, then you should obtain a commercial license from the DED, but if you are a manufacturer of a cosmetic product, then you should secure an industrial license in Dubai.
• The product you are manufacturing, selling, distributing or importing should be safe to use and should not have any side effects on the hair, skin, nails, lips and teeth.
• Your cosmetic product should meet the ESMA (Emirates Authority for Standardization & Metrology) imposed standards.

Launch a Cosmetics Business in Dubai in Easy Steps

To start your cosmetics business in Dubai smoothly and hassle-free, you need to follow the steps below.

Step 1: Select your activity

The very first step in the process of starting a cosmetics business in Dubai is selecting the activities that you would engage in under your business. It implies that you need to list down what activities will be conducted under your cosmetics business in Dubai such as manufacturing, distribution, retail, export or import. It will help you determine the type of business license you need to apply with the Department of Economic Development.

Step 2: Choose a Suitable Business Structure

The next step in the process of setting up a cosmetics business in Dubai is to select a suitable business structure that meets your business’s requirements. The business structure depends on your needs, as you can establish a sole proprietorship in Dubai if you want full control of the business yourself and don’t want to share the profits with any other partner. But if you want to start a business in partnership with someone, you can choose a partnership form of business where you will be sharing the profits and losses of the business with your partner (s). The other and most preferred option is a limited liability company in Dubai. Most entrepreneurs choose an LLC as it limits their liability and protects their personal assets from the liabilities of the company. It is a separate legal entity that can sue and can get sued. There are some other business structures available in Dubai, such as Branch offices, Joint stock companies, etc. You can choose a business structure most suitable to your business requirements.

Step 3: Reserve your Trade Name

The third step in starting a cosmetics business in Dubai is choosing a trade name for your business that adheres to the laws of the UAE and the guidelines of the Department of Economic Development. You should select a unique trade name that is not similar or identical to any already existing business. The name should not contain any offensive words violating the morality of the public. It should not include any name of a religion or any insult to Islam. The use of a country’s or continent’s name is also not allowed in the trade name. While selecting a trade name for your business, you should consider whether it is related to your selected business activity. It will help you build a brand from your business, and the consumers will directly connect with your brand.

Step 4: Select a location for your Business.

The next step in the process of setting up a cosmetics business in Dubai is to select a business location, i.e., where you want to set up your business. You can set up your cosmetics business in either the free zone or the mainland. Both of these jurisdictions have their own pros and cons, and you need to select the location for your business that fits your requirements and strategy. If you establish your cosmetics business in Dubai-free zones, then you can enjoy various benefits like 100% foreign ownership, full exemption on payment of taxes and 100% repatriation on profits. On the other hand, establishing your cosmetics business in the mainland of Dubai will give you the liberty to expand your business operations in other UAE markets without any restrictions.

Step 5: Register with Dubai Municipality

It is an important step in the process of your cosmetics business setup in Dubai. After you have selected your business location, you need to register your cosmetics product with the Dubai Municipality. You cannot market your products without registering them with the Municipality. The registration of cosmetic products can be done through the Dubai Municipality’s product registration portal.

Step 6: Apply for a Business License

The next step is to apply for a business license with the Department of Economic Development or the relevant free zone authority based on your selected business location. There are several types of business licenses in Dubai, including commercial licenses, industrial licenses, tourism licenses, agricultural licenses, craft licenses, and professional licenses. You need to apply as per your selected business activity, i.e., if you will be engaging in the buying and selling of cosmetic products, then you need to apply for a commercial license, but if you want to start manufacturing cosmetic products in Dubai, then you have to apply for an industrial license. You need to file the application form and submit the required documents with the Department of Economic Development to obtain a business license for your cosmetics business in Dubai.

Step 7: Additional Approval

After getting your business license from the Department of Economic Development, you also need to get additional approval from the government authorities. For a cosmetics business in Dubai, approval in the form of a Health license should be obtained from the Public Health and Safety Department.

Step 8: Open a Business Bank Account

It is an important step of the Dubai business setup process as it helps you conduct financial transactions for your business. You need to find a suitable bank account that collaborates with your requirements and needs. All the banks have their own specific guidelines and rules, and you need to select one that suits the goals of your business. After finalising the bank, you have to open a corporate bank account, which will help you make and receive payments for your business.

Essential Paperwork for Dubai Cosmetics Business

To start a cosmetics business in Dubai, you need to collect and submit various essential documents to the relevant authority. Below is a list of required documents for your reference:

• Directors and Shareholders Passport Copy
• ID Proof of Directors and Shareholders
• Recent Bank Statements
• Memorandum of Association (duly attested)
• Lease Agreement (duly attested)
• Additional Approval from the Government Authorities
• Address proof of directors and shareholders.

Some additional documents may be required as per the selected business activity and location.

Conclusion

Starting a cosmetics business in Dubai is a golden opportunity for foreign investors and entrepreneurs who are looking for a successful business idea. The beauty and wellness industry is constantly growing in Dubai, with new trends emerging in the form of men’s grooming products, halal skincare and beauty products, natural and organic products, cosmetic surgery products and services, etc. If you are a foreign entrepreneur or investor, this is the right time to start a cosmetics business in Dubai. Apart from favourable business policies and tax incentives, the Cosmetics business setup in Dubai provides various benefits such as millions of tourists visiting Dubai every day, multicultural society, quick business license process, different business locations and international recognition of your cosmetics business. You can follow the eight simple steps listed above in this blog for a smooth and hassle-free cosmetics business setup in Dubai.

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