Starting oil and gas business in Dubai
When it comes to tapping on some lucrative business opportunities, the oil and gas market of UAE is something every entrepreneur can rely on. Starting an oil and gas trading business in Dubai, UAE is indeed one of the best business ideas you can have.
It’s because UAE is among the world’s ten largest oil producers. According to the international trade administration, “ About 96% of the country’s roughly 100 billion barrels of proven oil reserves are located in Abu Dhabi, ranking number six worldwide. The UAE produces an average of 3.2 million barrels of petroleum and liquids per day.”
So, if you have a plan to dig into oil market of UAE then you must have complete idea about:
How to start oil trading business in Dubai, UAE?
Here are some steps that will help you set up an oil and gas business in Dubai, UAE.
Step 1-Conduct market research
Before you open a business in Dubai or any other country, the first step should be market research. It will help you identify business activities that you can do to make profit from business. Understanding market trends is essential because it lets you decide about a profitable market niche.
As a foreigner, it’s not always easy to explore UAE market and Prospr understand that very well. If you have any business idea about which you have no clarity whether to pursue it or not, then you can email your business idea: hello@prosprplus.ae We have years of experience in setting up a business in Dubai and assistance, we also offer market research service. So, before you commit to any idea, contact us and make an informed decision.
Step 2- Choose method of trade
Once you have decided to enter into the oil industry business of UAE then you need to pick a method of trading. You have a few options to try. For example, if you have a substantial amount of money, investment in an oil business would help you make a profit. You can purchase oil options or futures. Another good idea is to trade via CFD-Contract for Differences. You can also start your very own oil trading company in Dubai.
Step 3-Choose jurisdiction
In this step, you have to choose between Mainland and freezone. To make this choice simple for you, Prospr has created a comprehensive guide that helps you understand the difference between Mainland and freezone companies.
Step 4- Create Oil trading business plan
If you want to get approval for your business in Dubai, it’s always a good idea to map out your business plan. It will provide complete picture of your business in Dubai such as:
- Business partners
- Employee count
- Marketing efforts
- Information about official operating office
- Financing details
- Nature and activities of business
- Capital investments
- Income projections
- Markets
- Competitors
- Critical success factors
- List of suppliers
Make sure you have a comprehensive plan for business in Dubai to get quick approval from the jurisdiction.
Step 5- Select name and get trade license for business in Dubai
Now it’s time to choose a unique business name. You can think of two to three good business names that follow UAE business name policies.
You can get either a commercial or general trading license. If you are planning to start an oil trading company in Dubai Mainland, you need to apply for a license in the DED office. On the flip side, when you pick a freezone as your jurisdiction, then you need to apply for a license with relevant FZA-free zone authority.
Step 6- Acquire additional mandatory approvals
Once your commercial license is approved, you can’t continue business in Dubai until you get approval from relevant oil and gas authorities in UAE.
Since you want to conduct business in Abu Dhabi’s oil and gas sector then you will get approval from SPC- Supreme Petroleum Council- which is now merged with the Supreme Council for Financial and Economic affairs. Since you need access to the oil field, your company also has to seek permission from the Critical Infrastructure and Coastal Protection Authority (CICPA).
Before you get approval, you must ensure that your business follows rules and regulations set for oil field operations by the government. Besides, your company must have put in place some measures for environment protection and sustainability.
Step 7-Vendor registration
If you are planning to collaborate with ADNOC -Abu Dhabi National Oil Company then you need to register as a vendor. This registration process is lengthy and requires you to follow some policies set by ADNOC. Once you get approval, you will be listed among suppliers and it’s where you can get a DED license and start your company as a LLC – Limited liability company or as a foreign branch.
How much does it cost to start an oil trading business in Dubai, UAE?
Now you may be wondering how much money you need to spend for starting an oil and gas trading business in Dubai, UAE.
License fee
The very first cost you will pay is the License fee. You will get a commercial license, and the cost of a commercial license is AED 3000. You can also start a general trading company in Dubai, as it’s a cost-effective option; learn how.
Office rent
You will rent out a commercial space to start doing your oil trading business in Dubai, UAE. Amount of rent depends on location, size and facilities you get.
Company registration
Next cost will be company registration. Learn: How to register a company in Dubai.
Visa fee
Once you have your license, you need to start applying for a residence visa. Beside, you will apply for an employee and dependent visa. Cost of processing visas varies from one to another.
External approval
As you are going to get external approvals from the Supreme council and ADNOC, this approval will also cost you money.
Consultation fee
As a foreigner you won’t be clear about every other aspect of the oil trading business market. As a result, you need to pay consultation fees. Whether you get PRO service from Prospr or a market feasibility session, you will pay little cost for it but in return you will get immense value- as it will help you make informed decisions.
Operational cost
In order to keep your oil trading business up and running in the UAE, you need to spend money on day to day operations. You must have cash in hand and some additional capital to start your business operation smoothly.
Types of Oil and Gas Trading Licenses in UAE
Depending on activities of your business in Dubai, you need to apply and get a specific trade license in oil and gas industry. Here are some different types you must know about
Commercial trade license
You need to get this license from DED or FZA. Know everything about different types of license in Dubai.
Industrial license
In case you are planning to get involved in oil refining and processing activities, you need to acquire an industrial license.
Oil and gas trade license
When you want to trade oil and gas products, this specific license you need to acquire.
Storage and handling license
Sometimes your business activities involve storing and handling oil and gas products. If that’s the case then you will apply for this specific license in UAE.
Import/export license
Whenever your business model is based on import and export. You will have to apply for this license and make sure that you follow custom regulation related to this specific business activity.
Let’s start oil trading business in Dubai with Prospr
Finally, you have a clear picture of how to start an oil and gas trading business in Dubai UAE and what kinds of licenses and activities you can get involved with. As a foreigner, it won’t be easy for you to get approval from authorities. But guess what, Prospr’s PRO service providers are there to assist you. We will help you choose the best business activity and then our experts will be there with you from start to finish. Call Now.
