How to Start an E-Commerce Business in Dubai, UAE?

How to Start an E-Commerce Business in Dubai, UAE?

how to start an ecommerce business in dubai

Starting E-commerce in UAE

Since the outbreak of the Covid-19 pandemic, e-commerce and consumer behavior has changed the course of global retail more rapidly than ever before. As the popularity of online shopping grows, retailers are being compelled to update their mode of operations to remain competitive and efficient. Middle East e-commerce is expected to be worth USD 48.6 billion by the end of 2022. AED 12 billion in local GDP will be generated by the UAE’s e-commerce sector by 2023, making it one of the fastest-growing e-commerce markets in the Middle East. A&A Associate wants to address any issues you may have about starting an e-commerce business in Dubai, UAE.

How to Get Started with an E-Commerce Company

1. Find out if there is a market for your product

You must choose the right business model, taking into account market trends, customer needs, and the UVP of your company. Based on your company’s target audience and the potential for growth in the market you can choose from B2B, B2C, or C2B modules depending on your company’s needs.

2. Select an appropriate location

If you are wondering how to start an e-commerce business in Dubai, location is a critical consideration. Despite this, it is not necessary to have a physical office in the United Arab Emirates to start an e-commerce business in Dubai. If you want to get a business license, you can either apply for one in a free zone or on the mainland. 

When operating from a Free Zone, there is no personal income or corporate tax, 100% repatriation of business profits, and minimal customs duties to consider. 

You need to apply online through the Department of Economic Development(DED) to set up your business on the mainland. As a result of setting up a business on the mainland, you can conduct both domestic and international trade.

3. Obtain a Trade Name for Your Company

Trademark registration in the United Arab Emirates is as simple as filling out a form provided by the Economic Department and submitting it to the government. Your chosen name must be legal in UAE. Make certain that the company name does not contain any offensive, religious, or otherwise contentious terms. In addition, you cannot use a name that is too similar to the names of other businesses in the UAE. Your company must bear the person’s full name if it is named after them.

4. Apply for an e-commerce business permit in UAE

An application for an e-commerce license in UAE must be made once you have found a suitable location. An e-commerce license is issued by the Department of Economic Development. One of the many benefits of having an e-commerce license in the UAE is that it allows you to conduct your business on a variety of social media platforms. You can work with a local distributor if you have a free zone license, but if you have a mainland license, you can begin trading products and services directly with the local market.

5. Develop Your E-Commerce Website

Having a stable, optimized, user-friendly, and secure website for your customers is essential if you want to start an e-commerce business in Dubai, UAE. A domain name is necessary for your e-commerce website’s online presence. There are several website builders available online that make it simple to create a website. You do not need to know any coding to design your website with these.

6. Establish a Payment Gateway

It is necessary to have a merchant account from your local bank or payment service provider to accept credit card payments on your website. Payment gateways must be optimized to handle user traffic in accordance with TRA guidelines since the Telecommunications Regulatory Authority (TRA) in the UAE is the primary authority responsible for electronic transactions. Ensure that your website builder offers 24/7 customer support in the event of a payment failure.

7. Support for Customers and Logistics

Logistics and distribution are two of the important aspects of the e-commerce business. Keeping your products in warehouses and making them available for sale in a timely manner is critical. As a result, the timely delivery of the sold goods is so important. The most critical aspects of a company’s survival are customer support, technical aspects, database management, and import-export facilities. You have the option of building your logistics in the UAE, or you can hire third-party logistics support.

8. Get your trade license

UAE has multiple e-commerce licenses. Dubai has three e-commerce licenses. Nationality and business activity determine which licenses you need. You can get an E-trade license to sell your products online. E-trade licenses are single-ownership. This license does not allow physical offices or shops. Non-UAE nationals can obtain a Portal license in UAE using which you can start an online business in UAE by linking buyers and sellers. The DED launched a virtual company license to allow overseas investors and non-UAE residents to do business in the region. Contact A&A Associate to get your e-Commerce license starting at just AED 5500.

9. Get Import-Export Code(IEC)

In order to export goods produced in UAE,  import goods from a foreign country into UAE or even re-export goods earlier imported into UAE, an Import-Export Code (IEC) issued by the relevant customs department in UAE is necessary.  ​UAE provides a favourable environment for import & export by following a unified customs approach in all Emirates. Once your valid trade license is issued by the UAE licensing authority with relevant trade activity, we can help you attain the UAE Import-Export Code (IEC).

What Makes Free Zones in the United Arab Emirates a Perfect E-commerce Ecosystem?

Entrepreneurs in the region can easily establish an e-commerce business in the United Arab Emirates thanks to the region’s Free Zones. The Free Zones offer several affordable packages(licence starting at just AED 5500) to help e-commerce companies establish a presence in the region. One of the main advantages of setting up a business in the Free zone is that the NOC from a local sponsor is not needed. 

The Free Zones like Dubai Free Zone, Meydan Free Zone, Sharjah Media City(Shams) and Sharjah Research Technology and Innovation(SRTI) Park are attracting global investors who are looking for a place for starting an e-commerce business. A&A Associate can expedite your business set-up in free zones. Contact us now.

The Advantages of Obtaining a UAE E-commerce License

One of the many advantages of e-commerce is that it can be run entirely online, making it accessible to people around the world who want to start their businesses. A few of the advantages are:

  • Activities can start at a small rate and have a great reach
  • Business can be operated virtually
  • Having a license from the mainland allows you to set up a low-cost branch office in UAE
  • Probably one of the most inexpensive and popular activities
  • An e-commerce license frees you from the need for a physical workplace
  • No physical presence required of shareholders
  •  If you have a free zone e-commerce license, you will have access to custom warehouse facilities
  •  Taxes on imports and exports are eliminated
  • E-commerce license holders have the option of transacting in multiple currencies
  • Having an e-commerce license gives you more flexibility

How Much Does It Cost in Dubai to Start an E-Commerce Business?

AED 5500 to AED 12500 is the typical range in Dubai for an e-Commerce license. In Dubai, the cost of an e-commerce license depends on a variety of factors, including:

  • The type of license you select (a mainland or a free zone)
  • Your company’s size
  • Your need for commercial office space and other areas
  • When applying for an e-commerce license, the number of visas you submit
  • What kind of business do you run

The documents required and the respective timelines will differ from one Emirate to another. The location of setting up the business(Mainland, Free Zone or Offshore) also plays a major role in the same.  Contact us to know more details about starting an e-commerce business in the UAE.

Business setup, feasibility studies, business plans, VAT-compliant, accounting, audit services, legal consultation, corporate structuring, trademark registration, PRO service, bank account service, Nominee Services, auditing, and legal affairs are all services that fall under a single bench of A&A Associate in Dubai and the United Arab Emirates. We have been in operation for a very long time. And we know how to avoid those unnecessary delays you might otherwise face when setting up your business. For more information on starting your e-commerce business in Dubai, UAE please contact sales@aaconsultancy.ae. 

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