Do you want to start a perfume business in Dubai as a foreign entrepreneur? Opening a perfume shop will put you on the road to success in this emirate. It is said that the UAE’s perfume industry will be worth more than $500 million on average. Plus, it is expected to reach nearly $700 million by the end of 2023.
In this article, you will learn everything you need to know about the perfume business in Dubai. With so many benefits, this business is very appealing to investors. Let us will provide you with an in-depth look at the Dubai perfume market; as well as an understanding of all the terms and conditions that you will need to consider.
- A little bit about perfumes
- The perfume industry in the UAE
- What is your intended market?
- The manufacturing of perfume in the UAE
- Dubai’s retail sector
- Dubai Industrial City: The UAE’s perfume manufacturing hub
- Establishing a manufacturing facility
- Why open a perfume business in Dubai?
- What are the main advantages of starting a perfume business in Dubai?
- What are the steps to launch a perfume company?
- Documents you need to start a perfume business in Dubai
- How much does it cost to start a perfume business?
- How can Connect FZ help you?
1. A little bit about perfumes
Perfumes are classified into scent families in the perfume world. The categories exist because the terms are used by critics and designers. There are no universally agreed-upon groupings; nor are there any rules about categorization other than common sense and a perfume belonging if it smells like the last perfume in the category.
Here are a few classifications you may come across:
- Floral: it has a floral scent.
- Fruity: it smells like fruit, especially citrus.
- Green: fresh grass or leaves.
- Herbaceous: like any variety of herbs.
- Woody: resembling various types of wood.
- Amber: it is similar to tree resin.
- Animalic: bodily odors
- Musk: a substance produced by the musk deer.
- Oriental: notes include amber and spice.
However, sometimes they classify perfumes based on the structure of one of their fragrant molecules:
- Aldehydic: fatty, but emits other smells.
- Lactonic: fruity and creamy.
- Phenolic: has a tar-like odor.
2. The perfume industry in the UAE
The perfume industry is one of the most profitable industries in the country. According to recent news reports, one of the world’s most expensive perfumes available on the market in Dubai is worth AED 4.8.
Hence, the UAE perfume market is expected to reach $528 million in 2020. The Dubai perfume market is expected to grow at an 8.4 percent CAGR between 2021 and 2026.
3. What is your intended market?
Everyone interested in personal grooming is in your target market. This means that both men and women are your target demographic. Therefore, popular perfume scents include amber, musk, exotic flowers, oud perfume, and many others.
4. The manufacturing of perfume in the UAE
In the past, the traditional method of producing perfume by hand and selling it in the local market was common in Dubai. However, the industry has made significant strides in the last decade. This is because the UAE is proving its importance as an international destination and strategic business center for the perfume industry.
Hence, with the help of UAE leadership and regulations that encourage business growth, the country ranks first in the production and export of perfume. The city also provides appropriate licenses to facilitate the start-up of business activities.
5. Dubai’s retail sector
Dubai is known for its retail industry; all of the major brands of various products have seen tremendous success in the city. Businesses thrive as a result of the tax-free policy. It is one of the most promising companies in the retail industry.
Therefore, companies can easily apply for a trade license, which allows them to begin operations and run the business.
6. Dubai Industrial City: The UAE’s perfume manufacturing hub
When it comes to the perfume manufacturing sector, Dubai Industrial City has it all. It was incorporated in 2005 near Jebel Ali, DIC as part of TECOM Investments. This free zone offers numerous benefits to investors and business owners looking to establish a presence in Dubai.
It also provides the necessary licenses to begin business operations in a comfortable and trouble-free manner.
7. Establishing a manufacturing facility
Traditionally, all perfumes were made by hand and sold in large quantities. However, as the world of personalization has captured everyone’s attention, this trend has gradually waned. So, this shift required that the perfume manufacturing industries innovate and come up with a solution; which was, of course, customized fragrances, tailored to the needs of different people all over the world.
Hence, this shift in trend resulted in a massive market opening in which the UAE has firmly established itself. In addition to being a popular international destination, the UAE has established itself as a vital commercial hub for the entire perfume industry.
Thus, if you want to set up a perfume manufacturing facility in Dubai, you have several free zone options to choose from. Dubai Free Zone, Jebel Ali Free Zone, and numerous other free zones offer facilities that are ideal for this business.
8. Why open a perfume business in Dubai?
Opening a perfume business in Dubai will put you on the road to financial success. Aside from being a profitable business, network building can also help you discover new business opportunities and ventures. Thus, many well-known perfume manufacturers are now part of the “celebrity cult”, which is an added benefit.
Aside from the financial aspect, the industry gives you access to an international market. This essentially opens the doors to customers all over the world, which is a fantastic business opportunity.
Furthermore, the UAE has an extremely robust transportation network system that allows you to conduct business with ease.
9. What are the main advantages of starting a perfume business in Dubai?
There are numerous advantages for foreign entrepreneurs, businessmen, and investors to open a perfume business in Dubai. Check out the following:
9.1. A wide range of products
Being a foreign perfume investor allows you to work with a wide range of fragrances in Dubai. Consumers in Dubai currently prefer fragrances that are rich, warm, and natural. As a result, you can create products with popular ingredients such as oud, amber, exotic flowers, musk, and so on.
9.2. Taxation at a low level
The low tax rate is one of the best aspects of doing the perfume business in Dubai. Furthermore, foreign investors are not required to pay corporate taxes. Furthermore, the VAT rate, which is set at 5%, is very low.
In addition, VAT is only levied when you sell perfume within the UAE. When you sell perfume products outside of the UAE, however, do not have to pay it. Nevertheless, you must be aware of the new tax law in the country.
9.3. Location for a flexible business
As a foreign entrepreneur starting a perfume business in Dubai, you are free to rent a workspace and begin operations. Furthermore, business relocation is painless and inexpensive.
9.4. Helpful government
Every year, a large number of foreigners visit Dubai, which is a multicultural city. Plus, the local government continues to implement new policies to encourage and empower foreign investors to establish and operate perfume businesses in the city-state.
9.5. Hassle-free licensing
The approvals and licensing methods are cost-effective and well-defined, making it simple to start a perfume business in Dubai. Hence, obtaining a perfume business license in Dubai is also simplified when you work with a business consulting firm.
9.6. Technological progress
Dubai has one of the most modern digital infrastructures. Furthermore, Dubai is on its way to becoming the world’s best digital hub and a technologically advanced future. Hence, you can list your perfume business in e-commerce and social media using technology and the internet. It will assist you in increasing brand awareness for your perfume business.
10. What are the steps to launch a perfume company?
Starting a perfume business in Dubai, like starting any other business, entails a set of rules and regulations. For foreign investors, this process is straightforward, beginning with planning, followed by implementation, and finally receiving business approval from the authorities.
10.1. Create a business plan
Begin with a business strategy, in which you formally write down the following:
- Perfume business mission.
- Products you wish to sell.
- As well as your business capital and budget plan.
10.2. Be creative
Appoint experts and researchers to assist you in developing your one-of-a-kind perfumes. You can experiment with different perfume recipes or create your own by purchasing essential oils in scents that appeal to you. After blending and experimenting with a few fragrances, begin mass production with the most popular ones.
10.3. Buy bottles and design the packaging
Investigate wholesalers for scent testers, samples, and bottles, and then design the containers or packaging of your choice. So, you can even choose the size and shape of the bottle to match your perfume scents.
10.4. Create a brand
Create a logo for your perfume company and register your trademark with the appropriate authorities in Dubai. To create a creative logo, you must hire designers who will assist you in creating an appealing perfume logo that will attract the target audience.
10.5. Obtain a business license
The most important aspect of starting a business in Dubai is obtaining a perfume business license. DED is the licensing body in Dubai that grants perfume licenses (Department of Economic Development).
10.6. Establish a manufacturing facility
If you are a foreign investor looking to establish a perfume business in Dubai, there are numerous FZ to choose from. Some areas that provide facilities for the establishment of perfume manufacturing units include Dubai Free Zone and Jebel Ali Free Zone.
11. Documents you need to start a perfume business in Dubai
In addition to a perfume trade license from the Department of Economic Development, any foreign investor must have a few additional documents to establish a perfume business in Dubai. Documents of this type include:
- Perfume Laboratory Test Report
- Your company’s registration certificate.
- Report on the perfumes you want to sell.
- Free sales certificate.
12. How much does it cost to start a perfume business?
In Dubai, the average cost of starting a perfume business is around AED 40,000 or more. If you are a foreign investor, you must figure out the cost of launching a new perfume company in Dubai. The cost of your perfume brand is determined by the fragrance creation, assembly, filling, designing, and packaging.
Furthermore, you may be required to bear additional costs such as employee salaries and rent for your Dubai business outlet. However, as part of the establishment costs, foreign investors and expatriates must pay one-time and recurring costs.
13. How can Connect FZ help you?
The perfume industry in Dubai is a thriving one for both local and foreign investors. Dubai is a popular tourist destination, and customers from all over the world come here to find their favorite perfume brands. Furthermore, the variety of perfume products available in Dubai is unparalleled in comparison to other fragrance hotspots.
Furthermore, investors benefit from free trading in Dubai and other Emirates, as well as business formation on the mainland. Starting a perfume business is a profitable venture that foreign entrepreneurs and other ex-pats can pursue.
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