Incoterms Explained: EXW, FOB, CIF and DDP for UAE Importers and Exporters

Incoterms are the standard trade terms, published by the International Chamber of Commerce, that say where the seller's responsibility ends and the buyer's begins. The term on your purchase order decides who books and pays for the freight, insurance, and customs clearance - so it decides how much work your freight forwarder does.

The terms you will see most

• EXW (Ex Works): the buyer collects from the seller's premises and handles everything after that, including export clearance.
• FOB (Free On Board): the seller delivers the goods on board the vessel at the port of loading; the buyer pays the sea freight from there. Used for sea freight.
• CFR (Cost and Freight): the seller pays freight to the destination port, but risk passes to the buyer once the goods are on board.
• CIF (Cost, Insurance and Freight): like CFR, plus the seller buys insurance for the buyer.
• DAP (Delivered at Place): the seller delivers to an agreed place at destination; the buyer handles import clearance and duties.
• DDP (Delivered Duty Paid): the seller handles everything, including import duties at destination.

Buying into the UAE

Buying FOB or EXW gives you control of the shipment: you choose the forwarder, the route and the timing, and you can often get a better freight rate. We then arrange sea freight or air freight from origin and the customs clearance in Dubai.

Selling from the UAE

Selling CFR, CIF or DAP means you arrange the freight to your buyer. For regular lanes such as Dubai to Pakistan or Dubai to Saudi Arabia, quoting on these terms can make you easier to buy from.

The term you agree also sets the customs value at the border, because duty and VAT in the UAE are assessed on the goods plus freight and insurance to the port; our Jebel Ali import customs clearance guide shows how that value is built from the invoice under each term.

Practical tips

For a Saudi road movement, put the agreed responsibilities alongside the operational details: collection, border coordination, destination handling and delivery. Our Dubai-to-Saudi road freight guide gives a checklist for confirming those items before accepting an FTL or LTL quote.

• Always write the place after the term, for example 'FOB Jebel Ali'.
• Check the term matches the transport mode - FOB and CIF are for sea and inland waterway.
• Agree who arranges insurance, even when the term does not require it.

Unsure which term to use for a shipment? Talk to our team before you confirm the order.