The UAE building materials trade, penetrating the international market

UAE construction sector is the third largest in the Middle East after the oil and trade ones. More than 6,000 construction companies operate in the country, where the majority of building projects are held in Abu Dhabi and Dubai. Construction is expected to bring 11.1% of the UAE's GDP in 2015, compared to 10.3% in 2011. These and other factors indicate that the UAE building sector is going to be one of the most promising areas for business the following years.

Prerequisite for the business development in the UAE

At this point there are several factors that have positive effect launching the company engaged in building materials trade in the UAE:

- Expo 2020. In November 2013, the Bureau of International Exhibitions announced Dubai as the host city of the world event - Expo 2020.  In 2014 the UAE spent 315 billion dollars on the preparation for the mega-project, taking into account the costs of the social infrastructure. The country has also enlisted the help of foreign investors. The run-up for the Expo 2020 affects all industries, including the development of infrastructure: hotels, commercial buildings, residential complexes, etc. Therefore, companies which sell building materials, doors, windows, balconies, stairways, fences and other products, are definitely going to find their customerin the UAE.

- Population growth. The IMF informs that due to expatriates the population of the country is expected to increase to 6 million by 2015 (compared to 5.4 million in 2010), that certainly will be a key factor of the growing demand for residential and commercial buildings in the UAE.

- Favorable business conditions. Import duty for the products makes only 5%. Goods, which are worth less than 500 dirham, are exempted from the duty. There exist no taxes in the country, including VAT that allows significant costs optimizing and successful market competition.

Documents required for imports registration

At registration of import the UAE Customs require:

- Purchase Order from the forwarder for a licensed company in the UAE;

- The original bill of lading (for seaports);

- The original invoice from the exporter under the name of the licensed importer indicating the number of the goods, the description and the total cost for each item of cargo (pcs.);

- A copy of the trade license of the buyer and seller;

- Certificate of Origin, approved by the Chamber of Commerce in the country of origin indicating the goods origin; *

- Certificate of transportation; *

- Customs declaration;

- A letter of customs duties exemption in case that there is a decree on procurement from local sources;

- Description of the contents of delivery with the indication of weight, method of packaging and product code for each item in the lot; *

- Transport documents required for import clearance.

Documents marked with * must be certified by the United Arab Emirates Embassy and by the Chamber of Commerce in the country of goods’ origin.

How to start a company in the UAE

Starting a business in the UAE requires a license. For companies specializing in building materials, it is necessary to issue a trading license. Companies planning to trade counting on the UAE market should open an office on the territory of the Emirates. In this case the enterprise is obliged to use the services of a local partner, who will own 51% share of the company (usually nominal). In order to take the UAE advantage of trading with other countries (re-export), it is better to start a company in one of the UAE free zones, where it can be wholly owned. The license, respectively, should be issued in Dubai or Abu Dhabi government agencies, or in the places in the free zones, which have their separate administration.



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