×

How to Get an e-commerce license in Dubai for your online business

November 8, 2022

Dubai is the perfect location to start your online business, with a population of 3.4 million, Dubai is brimming with an affluent international community where 97% of people own a smartphone and have access to retail apps. This ideal combination of access to the internet and consumers with disposable incomes to spend means the customers of Dubai are ready to spend money online which makes it the perfect place to start an e-commerce business.

While the UAE has a growing e-commerce market, there remains plenty of space for new players to exploit the potential of e-commerce in the UAE. Currently, the three big names enjoying online sales in the UAE are: Amazon.com; noon.com and Talabat groceries, these leading platforms are seeing incredible growth and market domination while leaving room and opportunity for the new ideas and investors.

WHAT IS E-COMMERCE

E-Commerce, simply put, is any business or industry that offers their goods or services for sale online.  Whether you are a solo entrepreneur or a multi national corporation, to thrive in your  market you need to be present and operating on the internet.

 The changes in consumer shopping habits, access to mobile technology and post pandemic online behaviour continues to see the strength of Dubai based e-commerce grow, with the value of online sales in the UAE growing 22% from 2015 to 2022. By 2025, the e-commerce sector in the UAE is expected to be worth a staggering USD 8 billion.

There are three ways for you to sell your product or service online in the UAE:

  • Build a website to showcase and sell your product.
    Build a unique e-commerce website, that shows who are and your passion for your product. Avoid commission fees but you will need to find your own advertising streams and logistics. 
  • Sell through a recognised marketplace.
    Get instant access to a vast audience of consumers where your product is guaranteed to be seen. You’ll pay commission for access to this consumer market. Well known markets such as Amazon can be an easy place to start.
  • Use Social Media stream to sell
    Target your customers in any place or location by targeting to your audience through influence and direction, this ensures your products get to the people who most want to buy them.

How can I start a small online business in Dubai UAE?

The easiest way for you to turn your ideas in a business in the UAE is to use the services of an experienced company formation specialist. Your formation partner can help you to understand which e-commerce licence is correct for you, whether it be full licence or freelancer permit. 

Next, you must ensure that you business activity is inline with the Department of Economic Development and your company name abides by the UAE’s strict naming conventions, your formation partner will aid you with this.

Next, the most important stage, is to decide whether to set up your business on the mainland or in a SPC Free Zone. Free Zones such as the Furjairah Creative City provide many financial incentives and quick incorporation processes which can provide the most cost effective way to start and grow your business. 

Once you have made all your key decisions, you can go ahead and apply for your trade licence or freelance permit following a process that requires little effort with a few basic details and documentation required.

 Finally, you are nearly set, you have your business licence; now, unless you already have a UAE residency permit you will need to apply for one. But, just like your business permits, with the right guidance this is a straight forward and stress free procedure.

Steps to get your e-commerce license in Dubai, UAE:

An E-commerce licences in Dubai are in very high demand due to the strength of the sector in region and the benefits that starting a business in Dubai can offer such as: tax exemptions; ease of resource availability and repatriation of profits and capital. 

Following these simple steps can allow you to understand and ease the process to get your Dubai e-commerce licence:

  •  Decide on a legal structure
  • Choose a business location
  • Register the company trade name
  • Submit the Dubai e-commence license application
  • Draft an MOA or local service application
  • Rent an office
  • If you are importing or exporting, register with the port & customs authorities
  • Collect your licence from the Department of Economic Development
  • Open a corporate Bank Account

Cost of e-commerce license in Dubai and UAE

The cost of an e-commerce licence in Dubai can vary based on the type of activity you chose to pursue. A Dubai e-commerce licence can be obtained for as little as AED 14,500 which will allow you to commence your e-commerce website.

Types of Ecommerce licenses in Dubai UAE

Dubai offers a variety of e-commerce licences depending on the type of of online business you want to create. Understanding the type of licence you require is vital to starting you online business in an efficient manner

1. Portal license

If you plan to act as intermediary, or middle man, between the buyer and seller, your online business in the UAE will be a Portal or an E-marketplace. There are many online services that fall into this category, the most famous of which being Amazon whose website serves as a virtual market for seller to meet buyer, where consumers can find all goods. 

If you plan to create a business in a similar way to this highly successful model, then a Portal Licence is what you require.

2. E-commerce license

If you want to build your own website, that shows who you are and what you do then you will require an E-commerce licence. An E-commerce licence will allow you to sell only 1 or 2 types of goods.

3. Commercial or service license

If your online business does not relate directly to E-commerce, your services can be still be sold online through the UAE. Whether you provide online tutoring, marketing consultation or many other internet business types, you will require a Commercial or Service Licence.

4. E-trader license

If you are looking for the most efficient way to start, an E-trader licence is cheapest and easiest way to begin. The licence issued by the Dubai Department for Economic Affairs costs just AED 1,070.

5. Freelance license UAE

If you are looking to offer your skills and expertise in a manner that suits you, then a Freelancer Licence is what you are looking for. Whether you are a consultant, IT specialist, developer and many more benefit from the freedom of freelancing. With the changes in UAE legislation, freelancing is now a growing sector in the UAE.

Choosing and registering your company name.

Rules and cultural practises can make choosing your company name appear complex and awkward, but fear not, by avoiding blasphemous and offensive language and by following the advice of a formation consultant, you’ll find the correct name for you.

Selecting your business activities.

Your business activity must align with the UAE list of permitted activities, but given the range available, this is straight forward process. It is likely that your business will fall in the category of e-commerce or e-trading, but nevertheless there is a category for you. Specify your area on your licence application.

Complete your KYC.

When making your application, you will need to submit a business license application form containing details about your business and its shareholders, as well as proof of address and identification for the purpose of completing your KYC and UBO details.

Set up your business bank account.

If you plan to be paid in the UAE, then you will need a UAE bank account. With the right advice and guidance you can find the correct form of account for you.

Choose the right jurisdiction for your online business

When it comes to setting up your business in the United Arab Emirates is one of the best place in the Middle East to do so. You can start your business in either the Mainland or in a Free Zone, both of which have their own advantages for ease of step up, growth and investment opportunities. Selecting the right location is vital for you success.

Mainland

A mainland company is simply an onshore entity registered with the relevant emirate’s government body. The fundamental feature of a mainland company is that there are no restrictions on its commercial activities. However, you require a local sponsor or a UAE national to be a partner in the company for some business activities.

Free Zone

If you want to keep 100% ownership of your business and ensure you are in complete control, then you may prefer to start your business in a free zone. They allow for a quick and easy formation, easy repatriation of capital and profits and exemption from import and export taxes, these amongst many others are the benefits of a Free Zone. Meydan Free Zone offers a premier Dubai location, an easy set up process, and a wonderful location to live and work. Meydan Free Zone has been awarded the Best Digital Free Zone in Dubai.

HOW TO CREATE YOUR E-COMMERCE WEBSITE IN DUBAI?

If you want to stand out from the crowd, to launch an e-business that truly shows who you are, then you will need to build your own unique website. There are many advantages to this approach, it can allow you to avoid costly commission fees, expand without the parameters of Market Place platforms and have complete control of your own business. 

You may have the time, experience and capital to build your e-commerce business from scratch; or you may want to follow an existing model to bring your products to market in a more efficient and cost saving manner. 

The easiest way to build your own website is using platforms such as: shopify, code-brew or ecwid. The use of a ready made platform can help you shape your business using a ready made scaffolding to get you going.

Features of Ecommerce website

There are many features of an e-commerce website that are vital to ensure your customers find the products they are looking for, make their sale, and return time and time again.

•   User friendly navigation

Ensure your customers can find their way around your site, in a friendly and engaging  manner.

•   Search site option

Allow your customer to search for the exact product, the quicker they find what they are  looking for the more likely they are to complete a sale.

•   Product reviews

Product reviews bring priceless feedback of your products, happy customers bring new  customers.

•   Product FAQ

Predict the questions your customers may want answers for, allow your customers to feel confident in the quality of your products.

•   Order Tracking

Give your customers the knowledge of the process by giving them the option to follow their purchase right to their front door.

•   Push Notifications

Push notifications keep the conversation going and bring people back to your e-commerce shop.

•   Chat Bots

Customer Service will show the quality of your products and your business, chatbots will allow your customer to find questions whenever and where they are.

•   Mobile App

A mobile app is vital for your customers that are always on the move, keep you e-shop open at all times.

PAYMENT GATEWAY UAE

An e-commerce website will need a quick, easy and secure way for their consumers to pay payment for purchases. There are many options to build a payment gateway into your website, use an external provider or third option. 

Paypal UAE can provide a quick and easy option for a new business looking to start quickly. Alternatively, you may wish to give the option for your consumer to pay cash on collection of your product. 

If you plan to build a payment gateway into your own website, there are many providers in the UAE that provide a user friendly process for the new businesses: 

 Remember that all UAE payment gateway providers charge a commission from each purchase. It usually varies from 2% up to 3.1% depending on the type of goods and sales volumes.

E-COMMERCE DELIVERY SERVICE DUBAI

A new e-commerce business needs to find its customer and then ensure they return time and time again; providing an efficient and consumer friendly delivery service is vital to ensure customer satisfaction and retention. 

It is important that you find a delivery service to build a long and prosperous relationship. Delivery services in the UAE can offer local, national and global logistic service packages; where you will receive the help and guidance of a dedicated manager and user friendly mobile apps. New business can benefit from the speedy and cost efficient help of either zajel.com or aramex.com

What is Cost of e-commerce license in Dubai?

A Dubai e-commerce licence can be obtained for as little as AED 14,500 which will allow you to commence your e-commerce website.

What is cost of E-trader license in Dubai?

If you are looking for the most efficient way to start, an E-trader licence is cheapest and easiest way to begin. The licence issued by the Dubai Department for Economic Affairs costs just AED 1,070.