Since the beginning of the Covid-19 crisis, e-commerce and customer behavior have changed the direction of the international market in a new direction more vigorously than ever before. While the usage of the internet for online shopping is on the rise, these traders are being forced to update their mode of operations to be competitive and effective.
Now, the UAE markets have excellent and growing rates for e-commerce businesses. Revenues are expected to grow from $2.6 billion in 2019 to $9.2 billion in 2026, creating a fantastic opportunity for startups. For the entrepreneur who wants to seize this opportunity, here is a step-by-step approach on how to set up ecommerce business in Dubai.
Why Choose Dubai for Your E-commerce Business?
Setting up an e-commerce business setup offers many benefits, including efficient logistics, ease of trade, the opportunity for global trade, and much more. Following are the benefits that make UAE an amazing for initiating an e-commerce startup.
- No Paid-Up Capital Requirements: Contrary to numerous other jurisdictions, the UAE doesn’t Impose a minimum capital investment for e-commerce businesses. This means you can establish your business with modest initial investment.
- 100% Foreign Ownership: UAE E-commerce business setup does not require a local sponsor and offers 100% foreign ownership.
- Low Tax Rates: UAE offers a Beneficial tax system with zero income taxes on wages. Furthermore, the 9% corporate tax and the 5% VAT are only Applicable in cases if the yearly income is over AED 375,000*.
- Gateway to Global Markets: The UAE is Ideally situated as a portal to new markets in the Middle East, Africa, and Asia. Dubai is a center for international trade. Launching your startup in the booming UAE e-commerce market, gives you access to an amazing customer base that is engaged in international commerce. This enhances regional connectivity, providing opportunities for growth and international reach.
- World-Class Infrastructure: E-commerce businesses grow on Advanced infrastructure and services. Free zones in the UAE offer top-tier amenities, consisting of high-speed internet, modern offices, and fully stocked facilities. These resources are beneficial for the Efficient functioning of your online business, making sure that your customers obtain effective and consistent services
- Stability and Security: The UAE, including Dubai, is famous for its Political and economic consistency. This stability makes a safe and reliable business environment. Entrepreneurs and investors can have trust in the pro-business climate, where agreements are upheld, and intellectual property rights are guaranteed.
Steps to Start Ecommerce Business in Dubai
Starting an e-commerce business in the UAE is a streamlined process, but with the right planning and guidance from Xpert Advisory, you can ensure a smooth and successful launch. Follow these easy steps to Set Up Ecommerce business in Dubai’s thriving business hub:
1. Find Out If there Is a Market for Your Product
You must choose the right business model, considering market dynamics, customer requirements, and the UVP of your company. Considering your company’s target audience and the room for growth in the market you can opt for B2B, B2C, or C2B modules based on your company’s needs.
2. Select an Appropriate Location
The choice of business location is an important factor when starting your e-commerce business in Dubai. However, for an e-commerce company formation, it is not necessary to rent a physical office space within the UAE. You will thereby be permitted to engage in a range of business activities, such as if you want to apply for a business license, you can do so either in a free zone or on the mainland.
Free zone companies have no income tax or corporate tax, 100% profit remittance, and low customs duties. Before you can initiate your business on the mainland, the Department of Economic Development (DED) requires you to book online. Launching a mainland company opens up opportunities for both domestic and global trade.
3. Obtain a Trade Name for Your Company
Trademark registration in the United Arab Emirates is as straightforward as completing the given form by the Economic Department and submitting it to the government. Your selected name must be allowed by law in the UAE. Ensure that the company name does not contain any offensive, religious, or other terms in controversial conditions. Moreover, you cannot use a name that is the same as the names of different businesses in the UAE. Your company must feature the individual’s complete name if named after them.
4. Apply for an E-commerce Business Permit
Application for an e-commerce license in the UAE is required after securing an appropriate location. An e-commerce license is available through the Department of Economic Development. There are some advantages to obtaining an e-commerce license in the UAE; namely, it allows you to begin your business on many social networking sites. You can transact business through a local sponsor if you have a free zone license; however, if you have a mainland license, you can commence distribution of the specific products by dealing directly in the local market.
5. Develop Your E-Commerce Website
Having a well-structured, easy-to-navigate, and secure website for your customers is important if you want to start an e-commerce business in Dubai. A domain name is beneficial for your e-commerce website’s online visibility. There are many website builders present online that make it simple to make a website. Coding is not important if you are making your website with these.
6. Establish a Payment Gateway
It is beneficial to have a trading bank account from your local bank or financial service provider to receive credit card payments on your website. Payment optimizing gateways are necessary to manage user traffic effectively according to TRA guidelines since the Telecommunications Regulatory Authority (TRA) in the UAE is responsible for electronic transactions. Make sure that your website maker grants 24/7 customer support in case of a payment failure.
7. Support for Customers and Logistics
Logistics and distribution are two of the important facets of the e-commerce business. Keeping your products in safehouses and having them available for sale within a timeline is significant. As a result, the delivery within time of the sold goods is critical.
The most notable aspects of a company’s survival are Customer service, technical infrastructure, database handling, and import-export operations. You opt to build your logistics in the UAE, or you have the option to recruit third-party logistics assistance.
8. Get your Trade License
The UAE offers three primary e-commerce licenses for businesses. The type of trade license required depends on the nationality and the type of business operations.
- E-trade License: An E-trade license is ideal for small businesses as it allows you to sell your products online. This license is for single ownership and does not authorize physical storefronts or retail establishments.
- Portal License: A portal license is suitable for more complex online business operations. It allows non-UAE nationals to launch an online business in the UAE by connecting customers and sellers.
- Virtual Company License: The DED initiated a virtual company license which is designed for companies operating primarily online with a virtual presence. It provides overseas investors and non-UAE individuals to start businesses in the region.
9. Get Import-Export Code (IEC)
To export goods made in UAE, import goods from another country into UAE, or even again export amenities earlier imported into UAE, an Import-Export Code (IEC) offered by the related customs department in UAE is critical. UAE grants a favorable place for import & export by following a unique customs guideline in all Emirates. Once you secure your trade license from the UAE licensing authority with relevant trade operations, Xpert Advisory can assist you in getting the UAE Import-Export Code (IEC).
Cost of E-Commerce Business Setup in Dubai
The price of an e-commerce license in Dubai ranges from 15,000* to 28,000* AED. The cost depends upon multiple aspects such as:
- Your choice of license type (a mainland or a free zone).
- The size of your business.
- Your need for office space and other areas for commercial uses.
- The number of visas you apply for the eCommerce license.
- The type of your business.
Requirements for an eCommerce License in Dubai
The e-commerce license in Dubai is present for UAE, GCC, and international residents. UAE and GCC. Foreign nationals can receive only professional licenses. You must complete the below requirements to get an eCommerce license:
- The owner must be aged 21 or above.
- She/he must hold a valid Emirates ID.
- Have a registered company name.
- Pay the fees within 24 hours of submitting the registration form.
- Must complete the registration process with DED.
- Annual renewal of the license within one month of the expiry date is mandatory.
Documents Required for an E-commerce License in Dubai
The documents needed for an E-commerce license in Dubai are as follows:
- Passports Copies of all the shareholders.
- Visas Copies of all the shareholders.
- Copies of the sponsors’ Emirate IDs.
- Local service agreement or civil works agreement.
- No Objection Certificate (NOC) from the relevant authority.
- Draft of an MOA (Memorandum of Association).
Benefits of Opening an E-commerce Business in Dubai
Starting a business in Dubai has endless benefits. You can get 100% ownership of your business, a streamlined startup procedure, very smooth license approval, and much more.
- Free of import and export taxes and duties
- There are no restrictions on capital withdrawal
- Entrepreneurs in e-commerce can apply for a UAE residency visa
- Flexibility and scalability for business growth
- Low cost of e-commerce business setup process
- There is no additional cost to launch or operate the business
- Multiple options available in terms of jurisdictions available for your business
- 100% ownership is allowed for foreign nationals and multiple currency transactions
- 100% repatriation of profits and capital
Conclusion
Launching an e-commerce business in Dubai grants an amazing opportunity to get into a thriving and IT-adept market. With its tactical location, government assistance, and advanced infrastructure, Dubai offers an unmatched place for entrepreneurs seeking to enhance their digital adventures. By taking the right approach—selecting the right products, business model, getting the important licenses, launching a user-friendly website, and applying efficient marketing strategies—you can place yourself for achievement in this dynamic marketplace. The key to triumph is in grasping the market, being resourceful, and giving excellent customer support.
FAQs
1. How to set up an E-commerce business in UAE?
To start an eCommerce business in the UAE, you need to choose the right business structure, register with relevant authorities, obtain necessary licenses, and set up payment and logistics systems.
2. What is the cost of an E-commerce license in Dubai?
The price of an e-commerce license in Dubai ranges from 15,000* to 28,000* AED. But it depends on multiple factors such as license type, size of your business and the number of visas.
3. Can an e-commerce business in the UAE be run fully remotely?
Yes, it’s possible to run an e-commerce business in the UAE fully remotely. Numerous free zone configurations facilitate remote management capabilities. However, periodic visits may be necessary for specific legal and operational considerations.
