The wholesale brokerage market in the UAE is a hidden gem brimming with potential, revolutionising how businesses connect and trade. As the region transforms into a bustling trade hub, the demand for wholesale brokerage services has surged, becoming a linchpin in the UAE’s diversified economy. Fueled by an explosion in e-commerce and the growing appetite of consumers for a wider array of products, this sector is not just thriving; it’s redefining the landscape of wholesale distribution. In 2022 alone, the wholesale trade market was valued at approximately AED 160 billion, with forecasts predicting a robust compound annual growth rate (CAGR) of 7% over the next five years.
However, what exactly is driving this unprecedented demand? Factors such as the UAE’s geographic position, exemplary logistics infrastructure, and government initiatives to foster a business-friendly environment have created a fertile ground for wholesale brokerage. Furthermore, the influx of international brands eager to penetrate the local market has led to increased competition, making effective wholesale brokerage services more essential than ever. For entrepreneurs considering entry into this vibrant industry, the potential rewards are significant, with profit margins typically ranging from 10% to 30%.
Here are the business activities that you can select under your license if you’re looking to establish your wholesale brokerage company in the UAE:
4610.00 – Wholesale on a Fee or Contract-basis
This business activity refers to the arrangement in which a business acts as an intermediary or broker to facilitate the sale of goods in large quantities, without taking ownership of the products being sold. This activity involves the wholesaler arranging transactions between suppliers and buyers, earning a commission or fee for their services rather than generating revenue from the actual sale of the goods. The key focus is on negotiating and managing contracts, often for specialised goods or bulk orders, ensuring the smooth flow of products through the supply chain while meeting the specific contractual obligations set by clients.
4610.01 – Activities of Commission Agents and all other Wholesalers who Trade on Behalf and on the Account of Others
This business activity directly refers to intermediaries, known as commission agents, who engage in wholesale trade by representing or negotiating the sale of goods on behalf of third parties. These agents do not own the goods they trade but act as intermediaries, facilitating transactions between buyers and sellers in exchange for a fee or commission. Their services include sourcing products, managing orders, and overseeing the transaction process while operating under specific contracts or agreements.
4610.02 – Activities of Those Involved in Bringing Sellers and Buyers Together or Undertaking Commercial Transactions on Behalf of a Principal, including on the Internet
This business activity refers to intermediaries or agents who facilitate transactions between buyers and sellers on behalf of a principal, such as a manufacturer or wholesaler. These agents do not take ownership of the goods or services but are responsible for negotiating, arranging, or finalising sales or contracts. The transactions can occur across various channels, including in-person and on the internet, with the agents earning fees or commissions for their role.
4610.13 – Mediation Services in Applications Via Websites
This business activity directly involves facilitating and coordinating transactions between parties through online platforms. Mediation services, in this context, involve acting as an intermediary or broker to enable businesses or individuals to interact, negotiate, and execute transactions using web-based applications. The service provider does not take ownership of goods or services but facilitates the process for a fee or commission. Primarily, this activity focuses on connecting buyers and sellers without holding inventory, ensuring smooth transaction processes through digital platforms.
4610.16 – Trading Agencies
Trading agencies refers to businesses that serve as intermediaries in the wholesale sector, facilitating the buying and selling of goods on behalf of manufacturers, importers, exporters, or other wholesale traders, without taking ownership of the products. Operating on a fee or contractual basis, these agencies specialise in negotiating and securing sales transactions, establishing and managing distribution channels, and representing their clients’ interests in the market. Their role is to streamline the supply chain, connecting suppliers with buyers, and optimising trade operations without the need to maintain inventory. This business activity enables efficient market access and enhances the commercial reach of manufacturers and suppliers, contributing to cost-effective and large-scale trade operations.
4610.17 – Other Specialised Wholesale
This business activity encompasses businesses engaged in the wholesale distribution of specialised products not classified under more specific categories. This includes wholesalers who operate on a fee or contract basis, supplying goods such as machinery, equipment, or parts to various industries without engaging in manufacturing themselves. The focus is primarily on distributing niche products that may require specialised knowledge or services for sales, such as technical expertise or tailored customer solutions. This activity is characterised by its reliance on building strong relationships with manufacturers and clients, managing inventory effectively, and navigating complex supply chains to meet the specific needs of targeted markets. Wholesalers in this category often leverage contracts to secure exclusive distribution rights or favourable pricing arrangements, enabling them to enhance their competitive advantage in the marketplace.
Exclusions for these business activities are:
- Wholesale trade in own name
- Activities of commission agents for motor vehicles
- Auctions of motor vehicles
- Retail sale by non-store commission agents
- Activities of insurance agents
- Activities of real estate agents
Third-party Approval: No third-party approvals are required for these business activities.
Filing of Economic Substance Return: These business activities are exempt from this requirement.
Anti-Money Laundering Compliance: These business activities are exempt from this requirement.
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