Dubai Textile City (DTC)

Dubai Textile City (DTC) was created in 2000, Textile Merchant Group (TEXMAS) signed an agreement as a joint venture between the ports custom and free zone authority which is a body that represents the Textile merchants. DTC is now one of the most active sectors that continue to experience robust growth in the region. Dubai Textile Free Zone serving as a major hub for textile trade and manufacturing. Set up with a vision to strengthen Dubai’s position as an ideal textile trading hub, the numerous privileges for the textile industry in the production, trade and distribution of textile and related goods.

Located in Al Warsan area of Dubai, established to provide a designated space for textile traders and businesses and creating a strategic location for redistribution of textiles all over the world. Dubai Textile City aims to serve the requirements of wholesale traders to manufacturers and garment industry. It provides modern infrastructure, advanced warehousing, and ideal environment for textile industries.

Why Choose Dubai Textile City for Your Textile Business?

Ideal Location for global trade: Dubai Textile City Free Zone is located near major ports such as Jebal Ali Port and Dubai International Airport, ensuring excellent connectivity for textile import and export. Its proximity to other major trade zones in Dubai provides easy access to markets in the Middle East, Africa, Asia, and Europe, giving businesses a competitive advantage in global textile trade.

Modern Infrastructure: Dubai Textile City provides a top-notch amenity to textile businesses, including Warehousing, Logistics and Office Spaces which provide an ease to Entrepreneurs with textile storage, operational needs and transportation of good smoothly respectively.

Zero Import and Export Duties: One of the most appealing aspects of Dubai Textile City Free Zone is the tax advantages it provides. Textiles and garments are subject to zero import and export duties, Exemption from corporate and income taxes and Profits and capital will be returned in their entirety. These tax incentives lower the cost of doing business and increase profitability for textile manufacturers.

Business-Friendly Regulations: The Dubai government has implemented business-friendly regulations that make it easier to start and run a business in the free zone. Companies benefit from simplified registration processes, quick licensing approvals, and government assistance to ensure smooth operations. 100% Ownership of the company, with no requirements for a local sponsor or intermediary, making he business setup more efficient and cost- effective.

Types of Businesses in Dubai Textile City

Dubai Textile City Free Zone supports a wide range of textile-related businesses, each of which plays an important role in the industry ecosystem. Textile manufacturers concentrate on producing raw materials like fabrics and yarns, which are required for garment production. Garment manufacturers process these raw materials into finished apparel and garments for both domestic and international markets. Wholesale traders facilitate bulk textile import and export by managing the flow of raw materials and finished products between manufacturers and end users. Fashion designers use the Free Zone’s infrastructure to create and distribute their distinctive clothing and accessory designs on a global scale.

How to set up your Business in Dubai Textile City

1) Choose your Business Activity
Determine the specific nature of your textile business, such as manufacturing, trading, or distribution. This decision will affect the type of business license you require as well as the documentation needed for registration. There are no direct costs to selecting a business activity, but the type of activity can influence overall setup costs.

2) Register Your Business
To register your business, you must provide the required documentation to the Dubai Textile City Free Zone Authority. This usually includes:

Passport copies of shareholders and directors.
Proof of capital (such as bank statements).
Create a business plan that outlines your operations.

Registration fees: Registration fees vary depending on the type of business and the size of operations, but typically range between AED 10,000 and AED 15,000. Make sure you confirm the exact fees with the Free Zone Authority, as they may change.

3) Secure a Lease
Lease office or warehouse space in Dubai Textile City based on your business requirements. The Free Zone provides flexible leasing options, including both short and long-term leases.

Leasing costs differ depending on the size and location of the office or warehouse. Warehouse leases typically cost between AED 30,000 and AED 100,000 per year, while office spaces cost between AED 15,000 and AED 50,000. There may also be an initial security deposit required, which is usually equivalent to one- or two-months’ rent.

4) Obtain a Trade License
Once your business has been registered, you can apply for a trade license from the Free Zone Authority. This license is required to legally operate and trade within the Dubai Textile City Free Zone.

Trade License Fees: The cost of a trade license typically ranges between AED 10,000 and AED 20,000, depending on the business activity and number of activities listed on the license.

5) Apply for Visas
The Dubai Free Zone authorities provide streamlined visa processing services for business owners and employees. You will need to apply for work visas for your employees as part of the setup process.

Visa Costs: Each visa costs between AED 3,000 and AED 5,000, including government fees and processing charges. Additional fees may apply for health insurance and Emirates ID processing.

Additional Considerations:

Penalties and Compliance: To avoid penalties, ensure that you follow all Free Zone regulations. Violations such as late license renewal or failure to meet operational standards may result in fines. Penalties can range between AED 1,000 and AED 10,000, depending on the nature of the non-compliance.

Following these steps and understanding the associated costs will allow you to establish your business in Dubai Textile City Free Zone in an efficient and cost-effective manner. For the most accurate and up-to-date information, contact the Dubai Textile City Free Zone Authority or a local business consultant.

Conclusion

A Dubai Textile City Free Zone is the crucial link for textile companies in the international marketplace and acts as an effective tool for expanding operations. Easy access, tax exemption, quality facility and environment of the city make it ideal investment hub for textile producers, buyers, and distributers.

Establishing operations in this region, Dubai Textile City allows companies to access critical market segments from different parts of the world while enjoying the advantages of well-organized supply and demand chains. Therefore, as the textile industry is gradually moving towards sustainability and innovation, Dubai Textile City Free Zone will remain relevant in the future of the industry.

Corporate tax applicability to the companies in Dubai Textile City (DTC) Free Zone:

Corporate tax law is going to be applicable for all the companies registered in UAE including the free zones in UAE. The UAE Corporate tax is effective for the financial year beginning on or after 1 June 2023 for the businesses in UAE. Corporate tax will be levied at zero percent on the taxable income (adjusted net profit) of the businesses in the free zones as long as they comply with all the regulations of the respective free zone and do not do any business with the mainland companies, otherwise there is a possibility of levying 9% corporate tax on the taxable income (adjusted net profit) in excess of AED 375,000. Hence companies in the Free Zones need to make sure that they are complying with all the regulations of the free zone and do not do any business with the mainland entities to enjoy the benefit of zero percentage of UAE corporate tax.

[NOTE: Kindly note that the authenticity of this article is limited to the day of publishing this blog. As policies and rules pertaining to each free zone keeps changing from time to time based on the necessity of the respective authority, it is hereby advised you to check the website of the concerned free zone directly to get the latest update on the same. We do not assume any liability if you have taken any decision based on the information provided in the article. We have ensured that the presented information to the visitor is legible to the maximum extent possible so that all the information is available in one page, at one go. Thank you.]

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