The modernization of Dubai can be largely credited to the oil and gas industry here. At the start, Dubai was nothing but a small fishing village. Only after the discovery of oil did Dubai rapidly flourish into its current state today. In only the span of 30 years, it became one of the most influential cities in the business world. All thanks to the oil trading business in Dubai.
If you want a start an oil trading company in Dubai, then you are on the right track. Oil accounts for approximately 65% of the United Arab Emirate’s GDP. Since the market is so saturated, many entrepreneurs and businessmen have the wrong concept that it is impossible to start a business in the oil and gas sector. One of the most effective ways to enter this market is as an oil trader.
You can enter the oil and gas industry easily as an oil trader. You can trade and profit from oil commodities like the future trades and CDFs. However, the oil and gas industry is heavily regulated in Dubai and the rest of the emirates. But do not let that hinder your interest in this sector. There are several business setup consultants who are more than happy to help you start an oil trading business in Dubai.
How to Start an Oil Trading Business in Dubai
The process of setup a oil trading company in Dubai is much easier when you work with a company set up expert. They have established a lot of businesses in the UAE, so they know all the ins and outs of the setup process. You can attempt to tackle the whole process yourself as well, but it is highly discouraged if this is the first time you are setting up a company in the UAE.
Here are the steps in the process of starting an oil trading business in Dubai:
1. Find a Local Sponsor for Your Business
The government in the UAE does not allow foreigners to own 100% of a business in the sectors that are strategically important to the country. As the oil and gas industry is responsible for most of the country’s wealth, it is very important to them. In such cases, you will need to find a local sponsor to share ownership of the company with you. These local sponsors can be Emiratis or business entities in the UAE.
Even if you are sharing ownership with a local sponsor, you will retain all the decision-making power. You do not have to share the profits according to the shared ownership. You need to pay the local sponsor a flat annual fee.
2. Select a Trade Name for Your Business
The authorities have set a strict set of rules for choosing names for your company. For example, the trade name of your business cannot contain any racial or religious slurs. You need to avoid any blasphemous or offensive language. To avoid any future conflicts, you should avoid the names of well-known organizations even if they do not exist in the UAE.
It is suggested to submit at least three names when trademarking your company. There are several online tools that help you to search if the name you are opting for is available in the UAE or not. As long as you are abiding by the set conventions, this is a fairly easy step to complete.
3. Complete the License Application Process
This is the most crucial step in the process of starting an oil trading business in Dubai. You need to obtain a business trade license from the Department of Economic Development in Dubai. This step is a whole process with steps of its own. If you are working with a company set up expert, then it will be a walk in the park. If not, then you need to deal with the authorities in the Department of Economic Development in Dubai by yourself.
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