International Trading Business in the UAE: Customs Duties and Fees Rates

Dubai Customs offers clear and transparent terms of customs services. It works relentlessly to improve and facilitate the clearance procedures.

Customs sets the regulations for importing and exporting goods; it monitors that the goods, which are imported into the territory of the country, are accompanied by the appropriate certificates. Thus, the importers should provide all the necessary documents including a valid trade license to local customs. They also must indicate the shelf life period of food products, specifying the manufacture and expiration dates. Meat products are allowed for entry only in the case they meet the regulations of the Islamic law. Availability of a special certificate ensuring this fact should be provided to the UAE customs.

Dubai Customs practices collection of certain customs duties when importing goods. The amount of such customs duties can vary, even though there is a general standard of 4%. It is important to notice that customs duties are also imposed on the goods when they are shipped out of the UAE free trade zones (FTZ) to the mainland.

The amount of import customs duty differs depending on the type of goods imported. Thus, the fixed amount of import customs duty on luxury goods is 10%, whereas alcohol and cigarettes are subject to the 30-33% import duty in Ajman, Ras Al Khaimah and Umm Al Quawain and 50% customs duty in Dubai.

At the same time, there are exemptions for numerous types of goods imported into the UAE. Customs duties are not levied on 734 items of goods, which include certain types of:

• medicines;
• chemicals;
• plants;
• vegetables;
• animals;
• diamonds;
• silver;
• gold.

There is no customs duties on some medical equipment, carriages, and accessories for the disabled. The Government has also exempted excursion boats, cruise ships, and helicopters to develop the tourism sector.

The UAE Ministry of Economy and Commerce prohibits parallel importing. For this purpose, it keeps a register of importer's agents. This data prevents importing the same kinds of goods by different agents. All the goods, which are imported by the non-registered importer, are kept in special port storages until the registered commercial agent will allow their entry, or, on exceptional cases, the customs authorities will permit importing without such approval. This results in the expiration of a vast amount of cargo (in case agent delays providing such approval for importing).

Indirect taxes types – customs duty

All the goods imported by non-member countries of the GCC, and which are liable to taxation, are imposed with a 5% customs duty introduced by the uniform customs tariff (1 January 2003). Import of goods originating in GCC countries is free of customs duties within the union. However, the goods originating in GCC include only those with the value added of at least 40% and higher and whose manufacturing facility is at least 51%-owned by GCC nationals.

A customs deposit, made when re-exporting to GCC countries, can be refunded upon filing a proof of re-export with the appropriate authorities. When re-exporting to GCC countries, a 5% customs duty is paid at the first point of entry.

How to get import/export license in UAE?

In 2018, the companies in the UAE have exported and imported goods for a total of about $320 billion, so it is no surprise that a trade license is one of the most highly demanded licenses from numerous entrepreneurs who prefer to register a company in the UAE in the free zones.

The flexibility of such licenses significantly increases their popularity. A general trade license, for example, allows business owners to import and export a range of different products — you can trade cosmetics and building materials under a single license.

Moreover, trading licenses also include several different strategies. For example, a business owner can import products in bulk for sale to distributors within the UAE, or create a trading center for import from foreign markets and then re-export outside the Emirates, or in combination with an e-commerce license to import goods and sell them in the local market.

Registering a company for import and export in the free zone is very simple and usually takes only a few days. An entrepreneur can choose from about 50 free zones, but not all of them suit well for import and export. If one plans to import and export goods mainly by sea, then the registration of the company in the Jebel Ali Free Zone (JAFZA) is well suited because it is directly connected to the port of Jebel Ali. If one plans to transport cargo by air, then the Dubai Airport Free Zone (DAFZA) zone is better option.

Regardless of where the company is registered, if the entrepreneur is engaged in import or export, the issues related to customs should be considered. To deliver goods to the UAE by sea or by air, you must request an import code from the customs of the Emirates. After that, it will be possible to import goods through any of the ports of the UAE. Goods that pass through the UAE customs from the free zone to the local market are taxed at 5% (although for some goods there may be a different tariff).

When importing into a free zone from a foreign country, licensees of the free zone are exempt from paying customs duties. Goods can be stored for an unlimited time, depending on the type of goods and the validity of the license.

Products from the free zone can be imported into the UAE or the GCC countries. This allows the licensee of the free zone to sell their products to companies in the UAE and GCC operating under existing commercial licenses from the relevant regulatory authorities.