Is E-Commerce Business Profitable in Dubai, UAE?
E-commerce business is playing an integral part of the business world wide and makes life easier for a lot of people. The United Arab Emirates (UAE) holds the largest B2C eCommerce market and one of the most suitable places to start an eCommerce business. To facilitate the move of businesses to the internet, the authorities in Dubai have released the E-commerce license in Dubai.
E-commerce, also known as electronic commerce or internet commerce, consists of business activities that involve buying and selling goods and services through an online portal.The e-commerce license in Dubai allows businesses to handle commercial transactions electronically via the internet. It is like a traditional business except for the fact that most of the business activities are conducted through the internet. Customers can browse catalogs and place orders online.
E-commerce 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. If you are an eCommerce license holder, you are allowed to make multiple currency transactions. An eCommerce license offers you more flexibility when it comes to expanding your business.
There are many different types of e-commerce which include the following:
- Business to Consumer (B2C)
- Business to Business (B2B)
- Direct to Consumers (D2C)
- Consumer to Consumer (C2C)
- Consumer to Business (C2B)
With regards to the different types of eCommerce license you can opt for any of the below eCommerce licence in Dubai as per your business requirements:
- E-Trade Licence: To sell product online
- Portal Licence: Ideal for listing website that includes products, services or reservations
- Virtual Company Licence: To undertake commercial activities in the region
To obtain a eCommerce License you must fulfil the following requirements :
- The owner must be aged 21 or above.
- She/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.
There are plenty of options available to start your eCommerce business . They are:
- Online tutoring
- Online shops
- Turn your identity into an influencer. Become a part of influencer marketing
- Web development
- Digital marketing
- Jewellery
- Clothing
How can You start eCommerce business in Dubai?
- Understand the market potential: Choose the right model based on the market trends, customer requirements, and the unique value proposition for your business.
- Select a suitable location: 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.
- Register the Company Trade Name: Register your company name by filling up an application form from the Dubai Economic Department.
- Get an initial approval for your licence: 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.
- Draft the MOA and other local service agreements and get necessary signature.
- Rent an office: Though, the e-commerce business may not require a dedicated commercial space for operating in Dubai, but registered address in Dubai is necessary for obtaining a licences in Dubai.
- Register with Ports and customs authorities if needed
- Develop your eCommerce website: 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.
- Open a corporate bank account: Once you are fully set up as a business, you should set up a bank account for your operations. This will make it easier to handle your company finances and tax filing in the future.
- 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.
- Customer and logistic support: You can either build logistics at your own expense or go for third-party logistics support.
- Launching and Promotion: Launch your e-commerce business and promote through different channels including social media.
What are the documents required to set up an eCommerce business Licence in Dubai, Mainland?
- Copies of the passports and visas 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).
How much does an E-Commerce License cost in Dubai, UAE?
The cost of setting up a eCommerce business will vary depending on a lot of factors which includes choice of license type, size of your business, office space, type of your business. However, the basic cost of the eCommerce license would be approximate AED 15000.
If you are looking to start an E-Commerce business in the UAE, it is recommended that you work with company formation professionals who have exceptional expertise in business set up formalities. They also have the necessary connections that help make the whole process smooth and effortless. Remember that the process is only easy and hassle-free when the business setup is done without any error.
Infographic on how to start your E-Commerce business in mainland Dubai
