If you’re an entrepreneur looking to establish an online clothing store in Dubai, you couldn’t have picked a better place to do it. The city’s population are avid shoppers, all looking for unique pieces at affordable prices. A business setup consultant with local insight can make it easy for you to navigate the Dubai company formation process.
Why Start an Online Clothing Business in Dubai?
- Increased spending power: The UAE has one of the highest per capita incomes. Dubai residents are still spending on fashion, despite inflation and increased cost of living.
- High online penetration: 99% of the UAE’s population is online. This makes targeting customers through social media and Google ads an easy way to get sales.
- Local support: There is an increased interest in homegrown e-commerce fashion brands. Dubai residents are more likely to shop through Instagram and support small, local businesses if they promote sustainable practices. Popular brands include The Giving Movement and Bambah.
- Government initiatives: Dubai’s Smart City vision and initiatives like Dubai CommerCity (dedicated to digital commerce businesses) make it easy for new entrepreneurs to establish and grow an e-commerce clothing brand in Dubai.
- Minimal tax obligations: There is no personal income tax in Dubai, and corporate tax is only 9%, levied on taxable income over AED 375,000. This means entrepreneurs can keep all the profits they earn, if they’re under the threshold.
| Emphasis on sustainability | Growing demand for eco-friendly and ethical fashion |
| Rise of mobile shopping | Increased purchases through mobile apps and social media stores |
| Limited drops & influencer hype | Popularity of limited-edition collections and influencer-driven fashion drops |
| Growth in custom design | Rising interest in custom-made clothing and local design aesthetics |
How to Start an Online Clothing Store in Dubai?
Setting up a business in Dubai is much easier if you work with a local business setup consultant who can guide you through the process. This can save you time with paperwork and figuring out what government approvals you need to legally set up your company.
1. Choose Your Fashion Niche
The first step will be selecting what type of e-commerce clothing brand you want to set up. This will involve some competitor research and studying the Dubai market demand. These are some of the popular niches in Dubai:
| Type | Example products | Target audience |
| Modest fashion | Abayas, hijabs, long dresses, kaftans | Local population |
| Luxury clothing | Couture, handbags, premium fashion, accessories | High-income expats & tourists |
| Streetwear | Graphic tees, jeans, sneakers, hoodies | Millennials, Gen Z |
| Sustainable clothing | Organic cotton, recycled fabrics, pre-loved clothing | Eco-conscious shoppers |
| Athleisure | Gym wear, sweatpants, sweatshirts | Fitness enthusiasts |
You will also need to choose a business model for your online clothing business in Dubai. Some common options for fashion companies are:
| Business model | Pros | Cons |
| Dropshipping |
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| Reseller |
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| Private label |
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| Fashion marketplace |
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2. Pick a Trade Name & Legal Structure
You will need 3 options for your trade name in both English and Arabic. The name has to reflect the nature of your business and follow UAE’s naming rules. In terms of legal structures, the type of structure you choose will depend on your business model and jurisdiction. These are some options:
- Sole establishment
- LLC
- Partnership
- Free Zone Company (FZCO)
- Free Zone Establishment (FZE)
- Free Zone LLC
3. Apply for a Trade License
- You can get an e-commerce license in Dubai to launch your clothing brand in the UAE in a free zone or on the mainland. Our expert consultants can help you choose a business location that suits your needs.
Free zones like Meydan and IFZA are popular choices. They are also a good choice because the incorporation costs are generally lower and you don’t need a physical storefront. As long as you partner with a local delivery partner like Aramex, Jeebly, EMX, DHL, or FedEx, you can serve customers on the mainland.
Your trade license application can take 2-4 weeks to be processed, depending on your location and license type. Once your business is registered, you can apply for residency visas for yourself and your team.
4. Open a Bank Account
Every business needs a separate bank account for corporate transactions. You’ll need to submit a business plan, personal identification documents, and your trade license as part of your application.
5. Build Your Store
For an online store, you can use sites like Shopify or WooCommerce, or sell your products on Amazon, Noon, or Fashion Rerun. You will also need to set up a payment gateway like Stripe, Telr, or PayTabs for secure transactions.
If you’re building your own website, this is what you will need to do for a successful, customer-friendly site:
- Have HD product images
- Add clear product descriptions
- Have a sizing guide
- Offer a smooth checkout process
- Display product reviews
- Offer order tracking
- Have Arabic and English language displays
Streamline Your Business Setup Process
How Much Does It Cost to Start an E-commerce Clothing Brand in Dubai?
The license cost will depend on your business jurisdiction and your activity. A free zone e-commerce license starts from AED 12,500, and a mainland license starts from AED 16,000 to AED 18,000.
Additional costs include:
- Visas
- Website development & maintenance
- Local delivery partner fees
- Legal fees
- Inventory
- Marketing & advertising
- Payment gateway platform fees
You can use our cost calculator to get an exact estimate of your business setup price.
4 Tips to Successfully Launch a Clothing Brand in UAE
- Offer cash on delivery (COD): Cash on Delivery (COD) is non-negotiable in the UAE. Many customers prefer COD when buying from a new online brand. If you only accept card payments, you’re missing out on a huge number of customers.
- Encourage reviews for discounts: When new customers see that others love your brand, they feel safer buying from you, especially when you’re just starting out. You can implement a system where buyers receive a discount in exchange for submitting a review or sharing their purchase on social media.
- Invest in marketing: In a place as populated as Dubai, you need to dedicate money to marketing to be seen. Platforms like Instagram, TikTok, and Facebook should be your main advertising channels.
- Run local ads: Focusing on local, geo-targeted ads will give you the best ROI when you’re starting out. You can partner with local microinfluencers to promote your business and reach more customers.
