There is no denying the fact that eCommerce is a booming industry around the world. Online shopping has become an integral part of everyone’s life. According to Statistica.com, global eCommerce sales touched a record high of USD 4 trillion in 2020. An estimated 1.92 billion people worldwide purchased goods or services online in 2019.

There has been a continuous upward trend in all eCommerce statistics since 2011 which is a clear indication that eCommerce is only going to grow in the years to come. As more and more people are turning to online shopping, the number of online stores has increased at an unprecedented rate in the last few years.

E-Commerce in Dubai

E-Commerce plays a pivotal role in a country’s economy. It creates new economic activities, increases a country’s revenue, and creates employment opportunities. Since Dubai is a technology-driven and business-friendly emirate that always welcomes business initiatives, E-commerce has grown at a much faster rate there than in the rest of the world. The 2018 PayPal cross-border consumer research reveals that 81% of Dubai’s population regularly engages in online shopping. This is a shockingly high percentage.

The region is among the highest smartphone and Internet penetration and tech-savvy population which makes it an ideal place to start an E-commerce business. There are many advantages to starting an eCommerce business in Dubai, its ease of doing business being the top. It means you can easily set up a business and get it going. It just takes an average of 8 days to register a business in Dubai. The cost of registering a firm is also not very high, and the entire process is efficient and streamline.

So if you too are looking to start an eCommerce setup in Dubai, you have to obtain an eCommerce license.

Steps to Obtain Ecommerce License in Dubai

Obtaining an ecommerce license will legalize your business in Dubai and you can perform your business activities without any restrictions. Following are the steps you need to follow to obtain an ecommerce license in Dubai.

1. Choose your jurisdiction

The first step is to choose your jurisdiction. You have 2 options to choose from, the free zone and the mainland. Both the options offer their set of pros and cons and you have to consider them before finalizing one. With a free zone business, you can only do business within other free zones and outside of the UAE market. A mainland business, on the other hand, allows you to do business both within and outside the UAE market. Similarly, a free zone business gets 100% ownership of the business while a mainland business needs a UAE national who will hold 51% share of the business. Setting up a mainland business is costly while a free zone business is cheap.

If you are opting for a mainland business, the ecommerce license is issued by the Department of Economic Development (DED). The free zone business license is issued by the relevant free zone authority. There are multiple free zones operating in Dubai.

2. Decide on a legal structure for your business

Now determine which type of business entity you are. It can be a sole proprietorship, limited liability company (LLC), corporation, or a representative office. This decision will determine which type of income tax returns you will file in addition to other legal considerations.

3. Choose and register your business name

Your business must have a name. Choose a name that is available, easy to remember, and reflects the nature of your business. Also, keep in mind UAE’s business naming conventions when choosing a name. That is, your business name must not include blasphemous or offensive words or words that refer to Allah, Islam, or religious organizations. Also, the name must not include your surname or initials. Only full name is allowed.

Once chosen, you must register it and obtain an initial approval certificate also called NOC from the DED.

4. Apply for your eCommerce license

After you have chosen your jurisdiction, legal business structure, and business name, you can formally apply for an ecommerce license. As stated above, the issuing authority is different for the free zone and mainland business setup. Apply directly to the relevant free zone for a free zone business and the Dubai Department of Economic Department (DED) for a mainland business in Dubai. In both cases, you will need to submit all or some of the following documents.

• Passport/visa copies of the shareholder (s)
• Copy of sponsors passport/ Emirates ID
• Local service agreement
• No Objection Certificate (NOC) from the relevant authority
• Memorandum of Association (MoA)

Points to Note:

• The license fee for a mainland business setup is around AED 10,000. This includes trade name registration, initial approval, and license issuance.
• No objection certificate (NOC) is valid for 6 months and is not renewable. You can apply for the NOC at the same time when submitting your trade name approval application.
• The Memorandum of Association (MoA) is mandatory for mainland businesses only. Itis a legal document that describes the company’s name, physical address of registered office, names of shareholders, and the distribution of shares. Freeland businesses are exempted from this requirement.

5. Apply for Visa (s)

After applying for an eCommerce license in Dubai, you can apply for Dubai residence visas of your own and those of your employees. The number of visas you can apply for depends on the size of your business and your location.

6. Open your corporate bank account

Now it’s time to open your corporate bank account to start trading. There are many national and international banks in Dubai and all might have different application and acceptance criteria. Choose the one that best suits your needs. You might be asked to produce documents such as company trade license, Memorandum of Association, source of funds, supplier information, and passport copies of shareholders and authorized signatories.

Conclusion:

Dubai is an extremely lucrative market and there is no better time to start an ecommerce business in Dubai than today. E-commerce in Dubai has gradually increased over the last few years and now is the perfect time for you to get your share of the thriving industry. If you have completed the above steps correctly, you will get your Dubai ecommerce license within 7 working days and you are all set to get your business rolling.