With one of the highest internet penetration in the world, the UAE stands to be one of the most suitable places to start an eCommerce business in Dubai. The United Arab Emirates(UAE) holds the largest B2C eCommerce market. UAE is also an eCommerce leader in the Gulf Cooperation Council (GCC) with more than 60% of the online buyers based in Dubai. This makes many foreign investors wonder start an ECommerce business in Dubai.
Dubai’s positive growth in the eCommerce industry along with its advanced eCommerce marketing facilities makes it suitable for conducting business online. Collaborating with the business expert at Shuraa Business Setup will make it effortless for you to get started with your eCommerce company in Dubai.
Steps for Opening an E-Commerce Business in Dubai
Here are 7 steps that will help you to open an E-commerce Business in Dubai:
1. Discover the Market Potential
You need to choose the right business model, keeping in mind the market trends, customers’ requirements, and the unique value proposition (UVP) of your business. On the basis of the market potential, you can go for a business-to-business(B2B) module, a business-to-client(B2C) module, or a client-to-business(C2B) module.
2. Choose a Suitable Location
Location is an extremely important factor to be considered when thinking about how to start an eCommerce business in Dubai. Though, you do not need a physical office set up to operate your e-commerce business in the UAE.
A free zone or a non-free zone (Mainland zone) are the two types of legal areas that you can approach to get a license. The advantages of operating from a Free zone are zero percent income tax, hundred percent repatriation of business profits, zero percent corporate tax, hundred percent business ownership, and negligible custom duties. If you decide to set up a company on the mainland, you will get official authorization to run both international and local businesses.
3. Register Your Company’s Trade Name
You can simply register your trade name in UAE by filling up an application form provided by the Economic Department. The name you decide to use should be legitimate in Dubai. Make sure not to use any foul, religious or controversial words in the trade name. Moreover, you must not use a name similar to already existing companies in Dubai. If you choose to name your company after a person, you must use his or her full name.
4. Apply for an e-commerce License in Dubai
Once you have selected a suitable location, you must then apply for an e-commerce license in Dubai. The Department of Economic Development is the governing body that provides an eCommerce license. An eCommerce License in Dubai allows you to carry out multiple business activities through different social media networks. With a free zone license, you can work with a local distributor, while you can initiate the process of trading products and services directly to the local market if you own a mainland license.
5. Develop Your eCommerce Website
If you are planning how to start an e-commerce company in Dubai, it’s most important to have a stable, optimized, user-friendly, and secure website for your customers. You should register a domain for your eCommerce website. Once that is done, you can easily build your website through various website builders available online. With the help of these, you can design your website without any coding.
6. Establish a Payment Gateway
To integrate a payment gateway into your website, you need a merchant account from your local bank or a payment service provider. Since the Telecommunications Regulatory Authority (TRA) is the primary authority responsible for electronic transactions in the UAE, you must have optimized payment gateways in place to handle the user traffic as per the TRA guidelines. Moreover, make sure your website builder provides 24/7 customer support features in situations of payment failure.
7. Customer and Logistic Support
Providing support to your customers, and handling technical aspects, database, and import-export facilities are the most important elements for the survival of a company. In Dubai, you can either build logistics at your own expense or go for third-party logistics support.
How to Get an eCommerce License in Dubai?
The e-commerce license in Dubai is available for UAE, GCC, and foreign nationals. UAE and GCC. Foreign nationals can only get a professional license. You must fulfill the following requirements to obtain an eCommerce license:
- The owner must be aged 21 or above.
- S/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 main documents which are required 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).
What are the Benefits of Acquiring an E-commerce License in Dubai?
Benefits of obtaining an e-commerce license in Dubai. A few of them are listed below:
- It gives you the opportunity to establish a cost-efficient office if you own a mainland license in Dubai.
- Owning an eCommerce license allows you to operate without a physical office space.
- Customized warehouse facilities will be available for you if you have a free zone eCommerce license.
- You are relieved from the import and export duties and taxes.
- If you are an eCommerce license holder, you are allowed to make multiple currency transactions.
- You are only charged 5% VAT on the transactions made within UAE.
- An eCommerce license offers you more flexibility when it comes to expanding your business.
What is the Cost of an eCommerce License in Dubai?
The cost of an e-commerce license in Dubai starts from 15,000 to 28,000 AED. The cost of an e-commerce license depends upon many factors such as:
- Your choice of license type (a mainland or a free zone).
- The size of your business.
- Your requirement of office space and other areas for commercial uses.
- The number of visas you apply for the eCommerce license.
- The type of your business.
Take the First Step Towards Starting Your eCommerce Business in Dubai
We are positive that the information provided above helped you understand how to start an e-commerce company in Dubai. Though the process of UAE e-commerce business setup is simple, you might need some assistance with the planning and paperwork.
We suggest you connect with experienced business consultants at Shuraa Business Setup. We will be more than happy to extend a helping hand to set up your e-commerce business in UAE and assist you through the process of acquiring an e-commerce License in UAE at minimum cost.