How to Open and Set up a Retail Shop in Dubai?

Shopping is a primary aspect of the economy in UAE and it accommodates amazingly well with the rich and wealthy. Retail shops have proven to be the best and thriving businesses in the majority of areas as they offer necessary items that are used every day. Are you planning to open a retail shop in Dubai? If yes, this article on How to Open A Retail Shop in Dubai is just for you! 

Most of Dubai’s population is a mixture of foreign people as well as locals. Moreover, tourists from all over the world visit Dubai every year, making it a major reason for the rapid growth of the retail sector in Dubai. 

Dubai also offers events like Dubai Shopping Festival which is highly beneficial for those who intend to open a retail shop in Dubai. However, there are some requirements that you should stick to if you intend to open a retail business setup in Dubai. 

How to Open a Retail Shop in Dubai? 

When compared to other businesses, any small financers can open a retail shop if they can give employment to a huge number of people. You can set up your retail shop either in the Dubai Mainland or in any of the free zone areas in Dubai. 

Most free zone areas offer residential facilities to their employees and their families. Read to know more about why you should open a retail shop in the Freezone areas in Dubai. 

Understanding the Type of Business You Want to Open

The type of license you will be required to have depends on what products you will be dealing with in your shop. Certain products, for example, operating a food or jewelry business require approval from particular government departments. The Department of Economic Development in Dubai (DED) has a list of more than 2100 activities that you can choose from.

Getting a Local Partner (Optional)

In order to operate a business in the UAE mainland, it was mandatory to have a UAE local partner. The local partner helped to support the business and had a 51% share in the business. Although this mandate is removed, having a local partner has its own benefits. If you don’t meet the requirements for a professional services license, you would require a local partner though.  However, you will not need the support of a local partner if you are intending to open a retail shop in any of the Freezone areas of Dubai. 

Business Registration and License

The second step in the process of retail business setup in Dubai is acquiring the trade license and other key certifications from the authorities. The Department of Economic Development in Dubai (DED) is the government body that authorizes permits to set up a retail shop in the UAE. 

Also, read How Can I Get A General Trading License in Dubai? 

Know the Jurisdiction

Considering the jurisdiction for the retail shop is imperative, whether you set up a retail shop in Dubai Mall or Meena Bazar. Retail shops get scrutinized under the terms of their jurisdiction just like any other offshore company establishment. A suitable shareholding arrangement is necessary to demonstrate in front of the authorities. 

Special Permissions Required for Getting Shops on Lease

Opening a shop on lease in the UAE comes with certain additional steps. Deciding the right and best location for the company is not the only important bit. You are required to acquire special permissions from the Dubai Municipality and other associated organizations. 

Process of Setting up a Retail Shop

The process of setting up a retail shop in the UAE is quite straightforward. By following the steps listed below, you can get your retail shop up and running within just a week. 

Business Plan

A solid business plan is needed to decide how much funds you will require to set up your business. Research should be conducted before the setting up of a retail shop which should also include practical calculations and the monthly operating costs for managing your store. This will give you a clear idea of the time taken for your business to reach the break-even point. The BEP or break-even point is the point at which revenue and expenses are the same and that will show you there is neither gain nor loss. 

Overestimating the Expenses

When considering getting a loan for your business, the cost of operating expenses for starting a business is directly related to the risk involved in it – the higher the risk, the higher the cost of the project will be. The major and most common mistake business owners make is underestimating their operating expenses. Be more practical and overestimate your expenses. 

Costs that were not a part of the actual business plan will surely occur when you open your shop. Failing to oversee these costs can indirectly affect the success of your business. 

Fundamental Startup Costs

To calculate the fundamental startup costs thorough research is mandatory. You must take into account the location and the size of your retail business. Apart from that, you must keep into account the following:

• Rent – an important aspect. Business owners must ensure that they have at least enough capital to cover 2 years of rent. 
• Licensing and permit fees – This consists of licenses and permits such as an Employer Identification Number for tax purposes, a Resale Certificate if you are not selling entirely independent products, a Seller’s Certificate, and a Certificate of Tenancy. 
• Store fixtures – You might require to have shelves, cases, display racks, and other furniture. 
• Initial inventory – The most important part of any retail business is that you must have a completely stocked inventory on the opening day and sufficient products to last at least the first four months. 
• Equipment and technology – Prerequisites such as web access, point of sale systems, computers, mobile payment platforms, televisions, and other IT expenses.
• Janitorial services – If you prefer to employ cleaning services in your retail shop, you have to anticipate between $50 and $100 a week. 
• Web Hosting – If you plan on hosting a website for your retail business, you will need a website designer and a host. 
• Interior decor – You will be required to paint the walls, mount shelving, replace the flooring, and counters, and make other necessary changes. 

To make your business noticed by the public, you will have to organize an event. An impressive opening program will provide enough exposure for your retail shop. This is not a compulsory step, but it can be helpful for the public to take notice and you can expect your business to be a huge success. 

So, this is your guide on How to Open A Retail Shop in Dubai. To conclude, you have to decide where you want your business to be set up, devise a business plan, get a license and register your business, select the jurisdiction, get permission from authorities, and finally, estimate the costs of setting up a retail business. 

Seek the help of business consultants like A&A Associate in Dubai and the United Arab Emirates. Once you have your business plan ready, you can always get the help of business consultants. They specialize in providing prompt, hassle-free, and competent support to help you launch a retail business matching your requirements. 

Contact us for legal advice and tax preparation or any kind of business consultation that you may require to open a low-cost business setup in Dubai.