September 18, 2025

Legal Aspects of Business Setup in DAFZA for Logistics & Trade Companies

Dubai Airport Free Zone (DAFZA) is a vital, international centre for logistics and trading companies, attracted by its proximity to Dubai International Airport and an excellent logistics infrastructure. These benefits mean that DAFZA is an exceptional option, offering many features for logistics and trade companies, including 100% foreign ownership, the ability for individuals to take all profits, and operating in a 100% tax-free zone. All the same advantages as operating in Dubai and responsibilities are also in DAFZA. But to be able to establish and operate a company in DAFZA, you will need to understand the legal framework it creates. 

 

Logistics regulations, licensing, and compliance requirements in DAFZA can quickly become very specific. Herein lies the value of an expert and advisory team, like CDA. CDA provides many more services than business set up, as these elements require the guidance of knowledgeable partners across all legalities local to DAFZA. We will guide you throughout the entire DAFZA process in relation to all logistics and operational compliance matters, starting with your initial setup and corporate structure and assisting you in managing compliance on an ongoing basis.

 

Legal Considerations When Establishing Your Business in DAFZA for Logistics & Trade Companies

DAFZA provides a unique setting suitable for the activities of logistics and trade companies. Legal issues of the free zone help the company to understand what is necessary for long-term business success.

 

1.Company Formation and Licensing in DAFZA

Once you have decided to establish your business in DAFZA, the first decision to make in starting your business involves the appropriate legal structure, incorporating, and registering the right license. 

 

  1. License Type

Usually, DAFZA provides:

  • Trade License: For import, export, re-export, distribution, and storage of specified goods.
  • General Trading License: A more general license to trade in multiple good categories.
  • Service License: For the company supplying logistics, supply chain services, etc.
  • Industrial License: For light manufacturing, packaging, and assembly, which may be applicable to value-added logistics.
  • A dual license with DET (Dubai Economy and Tourism) allows DAFZA companies to also do business in the Dubai mainland without having a physical office, providing an increased reach into the market.

 

  1. Document Preparation and Submission

The application process in DAFZA requires meticulous preparation and submission of a comprehensive set of documents. This typically includes:

  • Completed application forms.
  • A detailed business plan outlining your operations and objectives.
  • Memorandum and Articles of Association (MOA/AOA).
  • Board resolutions, if applicable.
  • Passport copies of all shareholders and managers.
  • Proof of address and other supporting documents.

Ensuring accuracy and completeness in these documents is critical to prevent rejections and expedite the approval process, paving the way for a smooth setup.

 

  1. Compulsory External Audit and Financial Reporting

DAFZA mandates statutory annual external audits for all registered entities. This ensures that your financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and DAFZA’s specific requirements. An accepted audit report is a prerequisite for license renewals and provides assurance of the company’s financial viability and transparency to the authorities.

 

  1. Environmental and Economic Substance Regulations (ESR)

Logistics and trade companies in DAFZA must be aware of and comply with the UAE’s Economic Substance Regulations (ESR) for relevant financial years. This involves identifying if your business activities fall under “Relevant Activities” (e.g., holding company, distribution and service centre, shipping business). If so, you must demonstrate genuine economic substance in the UAE by showing sufficient employees, physical assets, and expenditure related to your core income-generating activities. Proper documentation is essential to prove compliance to DAFZA.

 

  1. Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) Compliance

Businesses in DAFZA, particularly those in logistics and trade, are subject to stringent AML/CFT regulations. This necessitates the development and implementation of effective AML/CFT policies and procedures tailored to your operations. Key aspects include:

  • Customer Due Diligence (CDD): Implementing processes to verify customer identities and understand their business.
  • Suspicious Transaction Reporting (STR): Establishing frameworks for identifying and reporting suspicious activities to the authorities.
  • Internal Controls: Setting up robust internal controls to prevent money laundering and terrorism financing.

Compliance with these regulations is vital for mitigating risks and maintaining legal standing.

 

Why partner with CDA?

Partnering with CDA, in DAFZA is required on a strategic level when establishing a logistics or trade business in DAFZA. CDA provides a full-service solution from company setup and licensing to corporate governance policy implementation, ongoing compliance with ESR, UBO, and AML etc. By using CDA’s extensive knowledge of compliance requirements and passionate and reliable regulatory advice, logistics and trade businesses in DAFZA can confidently navigate statutory obligations, reduce risk, and, with a trusted operational partner, ensure compliance for their business stability and growth.

Ready to simplify your DAFZA business registration and compliance in logistics & trade?

Contact CDA Today for expert legal & financial advisory.