How to start a homemade products business in the UAE
The trend of homemade products is gaining popularity worldwide. Many consumers nowadays are choosing quality and authenticity over mass-produced products which often lack individuality and craftsmanship. This is creating a growing market for unique, handcrafted items that offer a personal touch and support small businesses. The UAE, in particular, is ideal for these types of products. With its affluent and diverse consumer base, strong online retail presence, and high demand for luxury and bespoke items, it’s an ideal market for entrepreneurs to capitalise on.
There are also numerous business licenses and supportive regulations that facilitate these types of ventures, making it easier for entrepreneurs to set up and run their homemade products business successfully.
This article provides a comprehensive guide on how to start a homemade products business in the UAE, from choosing the right jurisdiction and business structure to obtaining the necessary licences and permits.
- Choose the right jurisdiction and business activity
Selecting the appropriate jurisdiction is crucial for your homemade products business in the UAE. You have two main options: setting up in a free zone or on the mainland.
Free zones offer advantages like 100% foreign ownership, full repatriation of profits, and exemption from import/export duties. They also offer simplified setup procedures and are ideal for businesses focusing on international trade, online sales, and export-oriented operations. However, there are disadvantages, such as restrictions on doing business directly with the UAE mainland market. To sell your products outside the free zone, you may need a local distributor.
A mainland setup, on the other hand, allows you to trade directly within the UAE market without restrictions and offers greater flexibility in choosing business activities and expanding operations. This is ideal if you intend to engage directly with the local market, including retail shops and service providers. However, there are some disadvantages to consider, such as potentially higher costs and more stringent regulatory requirements compared to free zones.
Once you’ve selected the jurisdiction, the next step is to choose the correct business activity. The Department of Economic Development (DED) classifies various activities, and aligning your business with the right category is essential to avoid any legal issues. The classification of business activities includes trading, which involves buying and selling homemade products and is suitable for businesses planning to engage in wholesale or retail activities. Manufacturing covers the production of homemade items and is ideal for businesses that create products from raw materials or through substantial transformation. Online sales focuses on e-commerce activities and is perfect for businesses intending to sell products via online platforms.
Ensuring that your chosen activity matches DED classifications will streamline the licensing process. Accurate classification not only ensures compliance but also provides a clear operational framework for your business.
- Obtain necessary licences and permits
Obtaining the necessary licences and permits is a critical step in setting up your homemade products business in the UAE. First, identify the licences required. The most appropriate for those selling online, is an e-commerce licence. It allows you to trade products through online platforms and is issued by the Department of Economic Development (DED) or relevant free zone authorities.
The application involves the following steps:
- Choose a Business Name: Select a unique name for your business that complies with UAE naming regulations.
- Submit an Application: Apply through the DED if you are setting up on the mainland, or through the relevant free zone authority.
- Provide Required Documents: Prepare and submit the following documents:
- Copy of your passport
- No Objection Certificate (if currently employed in a UAE company)
- Copy of your Emirates ID
- Licence application form from your home jurisdiction
- Tenancy contract
- Attested Memorandum of Association
If you’re selling food or cosmetics, additional permits may be necessary to ensure compliance with health regulations. These can include a food safety permit if you are producing or selling homemade food items, a cosmetics product registration if your business involves homemade beauty products or other health certificates if you need to verify that your items meet all required health and safety regulations.
Additionally, you may need specific approvals from other relevant authorities depending on the nature of your homemade products. For example, if your products are organic, you may require certification from the Emirates Authority for Standardisation and Metrology (ESMA).
These steps ensure that your business operates legally and meets all regulatory requirements, which not only builds trust with customers but also protects your business from potential legal issues.
- Set up your workspace
Setting up your workspace is a crucial step for your homemade products business. Since you’re focusing on a home-based setup, you will benefit from lower overhead costs, convenience and the flexibility to start small and scale up as your business grows. However, it’s vital that you ensure that your workspace complies with local zoning laws and any homeowners’ association regulations. It’s also essential to maintain a clear separation between your living space and your business area. If you’re producing food or cosmetics, your workspace must comply with specific industry standards to ensure the safety and quality of your products. This might involve regular inspections by health authorities. You should also verify that your business activities are permitted in your chosen location since some residential areas may have restrictions on running a business from home.
- Source quality materials
Start by identifying reliable suppliers for your raw materials. In the UAE, you have access to both local and international suppliers. Visit local markets like the Dubai Souk or Abu Dhabi Central Market for unique, high-quality materials. Trade shows like the Dubai International Expo and the Gulf Food Exhibition are also excellent for connecting with suppliers.
Focus on quality and sustainability to set your brand apart. Choose suppliers that provide high-quality materials meeting industry standards and consider the environmental impact of your choices. Opting for sustainable materials appeals to environmentally conscious consumers and benefits the planet.
- Selling your products
There are several strategies you can use to reach your customers. Firstly, you could leverage popular online platforms such as Etsy or Amazon which provide a ready-made audience and a trusted marketplace. You could also consider setting up your own website using e-commerce platforms like Shopify or WooCommerce which provide greater control over branding and customer experience.
Local markets and fairs are another good outlet to showcase your products, gain exposure, and connect with customers directly. Events like the Ripe Market in Dubai and the ARTE (Artisans of the Emirates) market provide platforms for local artisans to sell their goods. It’s also important to maximize your online presence through social media platforms like Instagram, Facebook, and Pinterest which are popular in the UAE and can help you reach a larger audience.
- Manage your finances
Open a corporate bank account to separate your personal and business finances, making it easier to manage transactions and track your business’s financial health. The UAE offers a wide selection of local and international banks to choose from, so you’re sure to find one that fits your needs. Typically, you’ll need to provide your business licence, a copy of your passport, and other relevant documents to open the account. Once all these steps are taken care of, you can legally operate and focus on growing your business.
How can Global Link help?
Global Link has over 16 years’ experience working with local and global businesses, providing bespoke consultancy services for company incorporation in Dubai and the wider UAE.
We offer specialised support for starting a homemade products business in the UAE, including navigating the licensing process, advising on the appropriate jurisdiction and business structure, and liaising with government authorities to expedite the setup process. Our expertise ensures that your business plan meets all regulatory requirements, and we assist with securing the necessary permits. From strategic financial planning to compliance with local regulations, we provide comprehensive guidance to help you establish a successful homemade products business.
If you need advice on this or any other aspect of company incorporation or visa acquisition, please get in touch with us on +971 4 553 9901 or email us at [email protected] and we will be happy to assist you.