How to start a textile business in the UAE

When it comes to lucrative opportunities, the textile industry is every entrepreneur’s dream. Positioned as one of the largest players in the local market, this industry is thriving and shows no signs of slowing down. In this article, we break down what you’ll need to do if you wish to start a business in the textile and garments industry.

1. Select a trade name

Since you’ve already decided on your economic activity, the next step is to select an appropriate trade name for your business. Trade names should be chosen carefully as it stands as the company’s identity. Moreover, the trade name chosen must be in compliance with the UAE’s laws regarding business names. Some of the rules to keep in mind include:
A. The name should not violate public morals or the public order of the country.
B. The name should not use the names of any governing authority, the names of the emirates, the UAE, or the names of any religion.

2. Choose a location for your set-up

There are a multitude of options you can choose from with regard to your business’ location. However, there are two main categories your options will fall under, which are as follows:
A. Free zone locations: This option allows for you to start your business in a free zone, which comes with huge perks. From tax and corporate benefits, to aid in setting up your business, free zones have you covered. Moreover, the financial costs of setting up your business in a free zone are significantly reduced as compared to setting up the same on the mainland.
B. Mainland locations: These locations are located on the mainland, that is, not in a free zone and within the borders of the country. These locations can give you closer access to local markets, though, you will have to go through the process of setting up business without any aid and forego the other benefits that come with a free zone.

3. Select the appropriate business structure

The business structure you choose for your textile business will be mostly dependent on the location of your business. Mainland businesses usually have an LLC structure with single or multiple shareholders. Free zones however give entrepreneurs the option to register the company as a Free Zone Establishment (FZE) or a Free Zone Company (FZC).

The primary difference between these two forms of business is that an FZE requires only one shareholder, whereas a FZC requires two or more shareholders to be present. These free zone establishments are governed by the laws of the free zone they reside in, unlike mainland businesses who fall under the provisions of the UAE Commercial Companies Law (CCL).

4. Licensing

One of the most important aspects of starting a business of any kind is acquiring the appropriate license. A trade license is a permit that essentially legally proves that your business is allowed to operate within the UAE. For a textile business, a general trade license is required, and depending on the nature and extent of your business, an import or export license may also be required to conduct business in and out of the country freely.

Applying for a business license can be confusing if applied through regular means, especially if you are new to the field of business. SPC Free Zone has made the process streamlined and simple for those who wish to receive a trade license. Moreover, the free zone also allows for cross activity licenses, allowing for businesses to hold one license for up to 5 business activities.

5. Legalities and Paperwork

One of the final yet important steps is filling out the required paperwork and finishing up the legal procedures. Once this is done, your new textile business will be up and running for operations!

Starting a textile business doesn’t have to be daunting. Our experts here at SPC Free Zone can help you set up the business of your dreams with no hassle! Contact us at 800 SPCFZ to bring your entrepreneurial dreams to life in just a day.