Dubai is familiar due to its oil reserves. It has become a business hub in the Middle East. Entrepreneurs prefer Dubai as it is growing with a stable economy. It is expected to expand more in the future. The oil sector plays an important role in improving Dubai’s GDP. That is the reason why setting up your business in Dubai is the best choice for your financial success. But there are many challenges you might have to face.
Are you looking to start your business setup in Dubai and don’t know how the process works and what the advantages are? No need to worry!
In this blog, let’s discuss in detail the steps of starting an oil and gas trading business in Dubai, UAE. You will also read the benefits of oil trading business, top oil companies in the UAE, costs to obtain trade licenses, and many more.
Steps to obtain an oil trading business license
Setting up a new business setup in Dubai can be challenging. It becomes trickier when you are starting it in the oil and gas sector. You must have a professional business consultant to
guide you through the process.
Following is the step-by-step process of obtaining an oil trading business license in Dubai.
- Research the oil market
- Choose a trading method
- Choose a business location
- Create a business plan
- Choose a unique company name
- Apply for a UAE trade license
- Get additional approvals
- Get your residency visa
- Open a corporate bank account
Step # 1. Research the oil market
Learn and research the oil trading market, including current trends in the UAE.
Step # 2. Choose a trading method
Choose a method of trading. You can trade by purchasing futures, Contracts for Differences, or by starting your business setup in Dubai.
Step # 3. Choose a business location
Decide your business structure and location. You can either choose a free zone or Dubai mainland.
Step # 4. Create a business plan
The next step is to create a solid business plan. Ensure it includes your selling products, desired office space, reliable suppliers list, and includes other marketing strategies.
Step # 5. Choose a unique company name
Choose three unique business names that have not been registered before. The names must comply with all the rules and regulations of the UAE’s government.
Step # 6. Apply for a UAE trade license
After registering your name, you can now apply for a UAE trade license. It is regulated by the DED. In other Emirates, regulated by their relevant authorities.
Step # 7. Get additional approvals
Submit your documents and sign the Memorandum of Association. You may need additional approvals to conduct specific business activities in the oil and gas sector by the Supreme Petroleum Council (SPC). After that, pay the fees and obtain your license.
Step # 8. Get your residency visa
If you are moving to Dubai, it is necessary to have a UAE residency visa. The visa is usually valid for two years.
Step # 9. Open a corporate bank account
After obtaining your residency, you are eligible to open a bank account in the UAE.
Documents Required
The documents required to start an oil trading company in UAE are:
- Passport copies of all shareholders, if any.
- White background passport-size photos of all shareholders and partners.
- Residence visa of all shareholders and partners, if required.
- Application form.
- Proof of initial capital investment.
- A business plan.
- Memorandum of Association.
- Articles of Association.
- Initial capital investment proof.
Benefits of starting an oil trading business in Dubai
Dubai offers a tax-friendly environment with endless business opportunities. Apart from its favorable tax rates, there are numerous benefits of running a business in the oil and gas sector.
Setting up an oil trading company in Dubai has a bunch of perks, like:
- Strategic location for oil trading businesses to access key markets in the Middle East and North Africa regions.
- World-class infrastructure including ports, airports, and free zones that facilitate the smooth operation of oil trading businesses.
- Business-friendly environment with streamlined procedures.
- Favorable tax environment with low tax rates.
- Home to several international banks and financial institutions.
- Experienced workforce in the oil and gas industry.
- Access to a stable and growing economy.
- No currency restrictions.
- High potential to generate a lot of revenue and income.
- Complete repatriation of capital and gains.
Requirements for oil and gas trading business in Dubai
To start your oil trading business, it is necessary to:
- Conduct detailed market research to understand current trends and your competitors.
- Must have sufficient financial resources for day-to-day operations and future growth.
- Compliance with regulations and local and international trade laws.
- Build relationships with suppliers, and distributors from the oil and gas industry.
- Stay updated on the latest technologies in the sector to adapt for continuous improvement.
Cost of oil trading business setup in Dubai
The cost of setting up an oil trading business in Dubai can vary. It can depend on the type of business structure and commercial activity you choose. The cost includes such as fees for registration, business trade license, legal permits, residency visas, and other initial setup expenses.
It is recommended to hire our business consultants in Dubai. Emirates Business Setup guides you with a detailed breakdown of the costs involved in setting up your oil trading company in Dubai.
Top recognized oil companies in the UAE
Top recognized oil companies are involved in oil trading in Dubai. It includes trading of crude oil, refined oil products, and other oil products. The UAE government has made it easier for companies to start oil trading business by obtaining trade licenses.
1. ADNOC (Abu Dhabi National Oil Company)
ADNOC is a prominent oil and gas firm in the UAE. Established in 1971 and based in Abu Dhabi. The company is involved in various oil trading activities. The activities named a few are oil field exploration, energy production, refining, storage, and distribution.
2. Emirates National Oil Company (ENOC)
ENOC, a prominent oil and gas company in Dubai, was founded in 1993. With over 9,000 employees, the company caters to international clients. ENOC is owned by the government of Dubai. Additionally, it has more than 30 subsidiary companies operating in storage, processing, aviation, and sales. ENOC provides services to customers in over 60 countries worldwide.
3. Dubai Petroleum Establishment
Dubai Petroleum Establishment was established in 1969. The company is currently searching for new reserves of oil. Additionally, it has launched various initiatives that promote sustainability.
4. Dana Gas
Dana Gas is a private natural gas company in the Middle East. It was established in December 2005. It is listed on the Abu Dhabi Securities Exchange.
5. Abu Dhabi Oil Refining Company (TAKREER)
TAKREER is an operational entity of ADNOC. It was established in 2000. TAKREER includes crude oil refining, petroleum products supply, and other oil trading business activities.
Conclusion
Starting an oil trading business in Dubai, UAE can be a great opportunity. To successfully run a business in this sector, you must conduct thorough research. You need to understand the regulations and requirements. Meanwhile, you need to build networks, and invest in technological tools for efficient operations.
Additionally, it is important to have a solid business plan, sufficient capital, and a team of experienced professionals. With the right strategy and dedication, entrepreneurs can capitalize on the oil trading sector of Dubai.
If you would like more information, feel free to contact our business consultants at +971 585067175. You can also send us an email at [email protected].
Frequently Asked Questions
1. How can I start an oil trading company in Dubai?
To start an oil trading company in Dubai, you need to:
- establish your business entity,
- develop a business plan,
- obtain the necessary trade license,
- and comply with all requirements for company formation in the UAE.
2. What oil products are traded in Dubai?
The common oil products traded in Dubai are crude oil, petroleum, refined oil, and other derivatives.
3. What are the regulations governing oil trading in Dubai?
The oil and gas trading sector in Dubai is regulated by entities like the Supreme Petroleum Council.
4. What are the current fuel prices in the UAE?
The current retail prices of petrol and fuel are stated in AED (United Arab Emirates Dirham) and are as follows:
- E-Plus at 2.85 AED per liter,
- Special at 2.92 AED per liter,
- Super at 3.03 AED per liter,
- and Diesel at 3.16 AED per liter.
