- September 27, 2021
- Posted by: DBS
- Category: Dubai Business Services
The UAE is extremely competitive when it comes to obtaining an e-commerce license. As a result of the convenience of online shopping, many people in the UAE are choosing to shop online. Ecommerce has become more mainstream in Dubai due to this shift, causing entrepreneurs, business owners, and traders to consider setting up in the city. In order to get started with your business activities, you simply need an e-commerce license in Dubai.
In the UAE, investors have complete control over their profits, a number of tax exemptions, easy access to resources, and more. So, starting your digital business in this region will ensure sizable revenues right from the get-go. We’ll take care of all the essentials involved in setting up a company in the UAE by working with Dubai business service consultants.
Here is a complete guide that will help you start an ecommerce business in Dubai;
Dubai E-Commerce License
E-commerce companies can be incorporated in Dubai, but there are laws and regulations you must follow. In Dubai, anyone can set up an e-commerce store, but they are not allowed to sell products on it. A business license for electronic commerce is required in Dubai if you are planning to do business online. The Dubai Economic Development Department (DED) issues the certificate. In the absence of a license, your business is not considered legal. To obtain the license, you will need to follow a procedure.
In Dubai, How do I get an E-Commerce License?
A study by Google revealed that 91.9% of the population has access to the web in the UAE. Factors like rising internet usage and a favourable tax climate, among others, suggest that operating an e-commerce firm in the United Arab Emirates may be lucrative. An e-commerce license in Dubai requires the following steps to be completed:
1. Your Company’s Legal Structure
The first stage in acquiring an e-commerce license in Dubai is to determine the legal form of your company. To put it another way, whether or not to form an LLC, a one-person business, a branch of a parent company, a representative office, etc. In Dubai, LLCs and branch offices are the most prevalent business structures due to the inherent advantages they offer.
2. Select a Location
The location here does not refer to where you intend to open a store or office but rather to where you intend to obtain your licence. Dubai has two sorts of zones:
(a) free zones and
(b) Mainland zones
A free zone gives you complete control over your business. In the case of the mainland, you must have a local sponsor who owns at least 51 percent of the firm, with the remainder being your share. Similarly, each zone has its own set of benefits and downsides. You must evaluate all of the considerations before deciding where to establish your internet business.
3. Register a Business Name
Due to the lack of a real location, you must pick a name that people will remember. You may register your company’s trade name as your domain name to make it easier for customers to discover you online. Be careful not to use a domain name that is confusingly similar to the name of an already existing firm.
4. Fill out an Application for a Licence
Once you’ve chosen a location, you’ll need to obtain an e-commerce licence. This licence is issued by the Department of Economic Development, so contact them right away. The DED charges about AED 6,260 for trade name registration, first approval, and the issue of the license for a mainland firm. If you want to open a business in a free zone, you must first get a license from the appropriate free zone authorities. According to your internet business, you’ll be granted a different sort of license.
5. Submit an Application for the Certificate of Initial Approval
An Initial Approval Certificate is a letter of consent from the relevant authority to begin your e-commerce business in Dubai. It’s only good for six months, and it’s not extendable. When filing an application for trade name approval, one can also submit an initial approval certificate application.
6. Create a Memorandum of Agreement and a Local Service Agent Agreement
You must write and submit a Memorandum of Association (MOA) with the sponsor to the DED. If you choose to locate your business on the mainland, you must complete this step. The memorandum, which must explain the specific arrangements and ownership percentages among all partners, can be typed out by any law company. Companies establishing themselves in free zones can avoid this stage.
7. Open a Branch Office in Dubai
The next stage would be to establish a physical office in Dubai since Dubai authorities have made it essential for a company to have an office in order to be considered a legal organization.
8. Final Licensing Approval
Once you have completed all of the preceding steps, you will receive a business license between 1-7 days, depending on the authority.
9. Requirements for Import/Export
To get an importer’s code, your company must be registered with one of the ports and customs agencies. Imported products are subject to a 5% customs tax in the UAE. Companies that fall within the purview of a free zone will not be subject to import duties since they must sell their products/services inside the free zones.
10. Establishing a Corporate Bank Account
You will be able to open a corporate bank account once you have successfully applied for an e-commerce trade license and established your firm. Because the application procedure is short and easy, you only need to choose which bank best meets your needs.
Different Dubai E-Commerce License
In Dubai, there are many types of e-commerce licenses available. There are three major categories of e-commerce licenses offered by Dubai. These licenses are available to you if you meet certain requirements, such as nationality or commercial activity.
Ecommerce licenses in Dubai come in three flavours:
You can acquire an e-trader license if you want to offer your services or sell items online.
The Department of Economic Development oversees the e-trader licence in Dubai, which may only be obtained by UAE and GCC residents residing in Dubai. An e-trade license may only be issued under a single owner’s name. With this license, you cannot establish a physical office or create a shop.
License for the Portal
Another type of e-commerce license in Dubai that non-UAE nationals can get is a portal license. With a portal license, you may launch an online business in Dubai that connects buyers and sellers. A portal license is also appropriate for a listing website with items, services, or reservations.
When applying for a business establishment in the mainland region, the cost of a portal license is about AED 12,000 per year. It is important to note that the cost of an e-commerce license in Dubai varies depending on your company’s needs.
License for Virtual Company
A virtual company license is a type of business license introduced in Dubai. It allows investors from outside the UAE to undertake commercial activities in the region. The virtual company license may be granted only to companies that are not owned or controlled by any resident or citizen of the UAE. It can be limited to three sectors, namely computer programming and related activities, designing activities, and services related to advertising.
E-Commerce License Cost in Dubai
The cost of an e-commerce licence in Dubai is highly variable and will be determined by a variety of factors. These include the size of the company, the number of visas applied for, whether office space is required as part of the package, and the choice between the free zone and mainland.
As an example, the price range is between AED 15,000 and AED 50,000, depending on the requirements. In order to keep startup costs low, locating your business in a free zone is often the best option.
Benefits of an E-Commerce License in Dubai
If you are planning to start an online business in Dubai or UAE, it is essential to get an e.commerce licence in order to operate legally. Here are the advantages of getting an e.commerce licence in Dubai:
- Capital and income can be repatriated without any taxation or restriction.
- No currency restrictions.
- In free zones, there is 100 percent foreign ownership.
- Corporate and individual tax rates are both zero percent.
- Low-cost operation.
- E-commerce licences have zero import taxes attached.
- A three-year resident visa has been granted.
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If you have any concerns or questions about obtaining an e-commerce licence or about how to begin an e-commerce firm in Dubai, please contact one of our specialists. We at Dubai Business Service have helped many clients build their brands in Dubai’s marketplace, and we would be delighted to help you do the same for your online business in the UAE.
Talk to our expert business consultants today to learn more about starting a business in Dubai and UAE!
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