Cold storage refers to the practice of storing perishable goods, such as food or pharmaceuticals, at low temperatures to extend their shelf life and maintain their quality. Therefore, opening a cold storage facility or a cold storage warehouse involves establishing and operating a facility that is specifically designed and equipped for storing perishable goods at low temperatures. These facilities are commonly used by businesses in the food industry, pharmaceutical industry, and other industries that require temperature-controlled storage.
Dubai is the ideal location to set up a cold storage facility since it is a global tourism and hospitality hub, attracting millions of visitors every year. The hospitality industry, including hotels, restaurants, and catering services, requires reliable cold storage facilities to store and transport perishable food items.
The hot climate in Dubai poses challenges for the storage and transportation of perishable goods, so cold storage facilities with proper temperature control and refrigeration systems are crucial to ensure the quality and safety of perishable items, preventing spoilage and extending their shelf life. Investing in setting up a cold storage facility in Dubai’s Meydan Free Zone can help bridge this gap in the supply chain and meet the demand for temperature-controlled storage solutions.
5221.95 – Cold Storage
Cold storage warehousing is the practice of storing perishable or sensitive goods, such as food, medicines, artwork, and more, at specific temperature ranges to maintain their integrity, shelf-life, and quality. It involves chilling or freezing these sensitive goods to slow down physical and chemical changes, inhibiting biological decay and preserving their purity, with the ultimate goal of delivering high-quality products to end-users.
A wide range of products requires cold storage due to their sensitivity to temperature fluctuations. This includes fresh produce, meat and seafood, dairy, processed foods, frozen foods, nutritional supplements, botanicals such as flowers and plants, bio-pharmaceuticals like medicines and vaccines, books and artwork like historical documents and paintings, craft goods like candles, cosmetics, chemicals like reagents and disinfectants, organic textiles like fur and wool, and specialised products like aircraft components.
A cold storage facility receives and inspects incoming shipments of perishable goods, checking for temperature, condition, packaging, labelling, and documentation to ensure compliance with quality and safety standards. Next, temperature control and monitoring are crucial tasks in a cold storage facility, involving setting and monitoring temperature levels using refrigeration and temperature control systems.
Handling and transportation of products within the facility and coordinating transportation to and from the facility is another important action. This involves loading and unloading products using proper equipment and procedures and maintaining the cold chain during transportation by coordinating with logistics providers.
Quality control and compliance are critical tasks in a cold storage facility, involving regular quality checks, monitoring for spoilage or contamination, and maintaining proper documentation. Maintenance and safety measures are also implemented to ensure smooth operations and the safety of personnel and products.
The operation of terminal facilities for handling freight in a cold storage facility or warehouse is an important aspect of managing the movement, storage, and handling of perishable goods within the facility to maintain their quality and ensure efficient operations.
Exclusions:
This business activity excludes cargo handling.
Cargo handling refers to the activities involved in the movement, transportation, and management of goods, including loading, unloading, sorting, consolidation, packing, transportation, and inventory management. Cold storage, on the other hand, specifically refers to the storage of perishable goods in controlled temperature environments to maintain their quality and extend their shelf life.
One common reason for this exclusion is specialisation, where the facility focuses solely on providing temperature-controlled storage services and leaves cargo handling to other parties. Another reason could be outsourcing, where the facility hires third-party service providers for cargo handling to save costs or due to a lack of in-house capabilities. Additionally, the facility’s business model, regulatory restrictions, or operational limitations may also play a role in excluding cargo handling.
Third-Party Approvals – Post License
If you plan to set up a Cold Storage Facility or a Cold Storage Warehouse business in Dubai, it’s crucial to seek third-party approval from the Food Safety Department of the Dubai Municipality after obtaining a business license.
This step is essential to ensure that your business complies with the relevant standards and regulations established by the Dubai Municipality for food safety. At Meydan Free Zone, we help you get the third-party approvals required for your Cold Storage Facility or Cold Storage Warehouse.
ESR
The UAE government has implemented the Economic Substance Test (EST) to ensure that certain types of businesses are managed or guided from within the country. This includes meeting criteria such as having an adequate number of full-time employees located in the UAE, generating most of their income within the UAE and having sufficient assets and operational expenses in the UAE. Businesses are required to report their compliance with the EST by submitting an Economic Substance Return (ESR) within one year of their fiscal year-end.
For instance, companies with fiscal years that began on or after January 1, 2019, and ended on or before December 31, 2019, are required to file the ESR. Even newly established companies must file an ESR the following year if their business activities fall under the scope of the EST. This reporting requirement ensures that businesses in the UAE adhere to the economic substance regulations and promotes transparency and compliance with local laws.
Business activity 5221.95 is exempt from the ESR requirement.
AML
Designated Non-Financial Businesses and Professions (DNFBPs) operating in the UAE are obligated to adhere to anti-money laundering laws and combat the financing of terrorism and illegal organisations. The Ministry of Economy conducted an awareness campaign on April 30th, 2021, and existing license holders were already registered for goAML, the government’s system for reporting suspicious financial activities. Failure to comply with these requirements before the deadline may result in fines imposed by the Ministry of Economy.
Newly licensed DNFBPs must ensure they meet these requirements after obtaining their license to avoid penalties.
Note that business activity 5221.95 is not subject to AML regulations.
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