The introduction of internet has glued everyone to the mobile screen and pioneered an era of internet users. With everything at their doorstep, the use of internet increased and the E-commerce industry boomed. From the young generation to old, everyone has started buying and trading online. Moreover, after pandemic, the use of e-commerce has increased as everyone are kept to their homes. Textile giants, super cars, electronic gadgets, cosmetics, household items, grocery, all just a click away. E-commerce in UAE is also booming as more and more investors are operating their business online. It is one of the fastest growing hub for online business and also outperforms Saudi Arabia. Therefore, providing a platform for new and budding investors to set up E-commerce businesses in UAE. However, one needs to consider some points for planning and operating E-commerce businesses in UAE with an e-commerce license.

Why E-commerce in UAE ?

E-commerce business is a money making business in UAE as it has the 30th largest market in the world with a revenue of US$6 billion in 2020. Moreover, the global business hub provides great investment opportunities in various businesses from exporting to various financial services. Therefore, making it an apt location for a thriving business like E-commerce. In 2019, $16 billion was the total turnover in the e-commerce business in the Middle East. Around 4.44 million online shoppers are in the region. Top sites are SOUQ, OUNASS, AMAZON, Noon, etc.

Worldwide revenue is expected to double to US $ 6.54 billion from 2019-2022. Around 60% of online buyers are in Dubai. Moreover, around 81% of its adult population are online buyers. Dubai recently launched the Dubai E-commerce Strategy. This aimed at making Dubai a global logistic hub in addition to increase in share in the local economy.

Amazon and Noon are most sought after because they offer best products and best deals. They also have an easy refund and return policy. The payment method is and refund method is through the secure payment gateway. Amazon also provides to set up online selling account and selling the products online can fetch you a good sum.

E-Commerce License

While establishing a company we need to follow certain code of laws do so as to avoid future complications. The process of attaining E-commerce license is easy. Running an e-commerce business without proper licensing is illegal and one has to follow the procedures strictly and carefully. An investor must contact the Department of Economic Development for procuring the E Commerce License. With a legal license one can easily set up online account in Amazon or Noon as for creating and account trade license documents, VAT number, business bank account, etc. is asked. With a trade license one can easily and cost- effectively acquire trade license.

An e-commerce business without a trade license in the UAE have to pay up to Dh 500000. Activities including online catering, training, tailoring, beauty business, clothes, food, shoes, accessories, etc. all need e-commerce license. Article 6 of Dubai Law No.13 of 2011 states that every economic activity within Dubai shall have license issued by the DED.

E-trade license in Dubai was introduced by DED. This license is for the entrepreneurs doing business over social media. This license regulate sale of homemade products and services conducted through social media.

Procedure for Setting Up Ecommerce License in UAE

• Initially, determine the legal entity of the business. The legal structure of the business is an essential feature while applying for the license. Before the commencement of any business or applying e-commerce license, the investor must decide the legal entity of the enterprise. The interpretation of deciding legal structure is to decide whether the company will be an LLC, a sole-property company, a partnership etc.
• After that, finalize your business activity. DED has more than 2000 permissible activities to choose from. Select any activity accordingly. Figure out if you are a reseller or already have a company for which you are setting up e-commerce business.
• Next step is to choose a location whether mainland or free zone. Office space is not at all necessary to get license in Free Zones. Free Zones give virtual office address which helps to open business bank account.
• Select a trade name that is according to the guidelines and rules of land. A good and unique trade name attracts business online. The trade name can be protected by registering a Trade mark
• Apply for trade license from the DED or a Free Zone authority. You will get a trade license and start e-commerce business in 1-3 working days in Free Zone.
• Open an optimized e-commerce website.

Requirements

Warehouse requirements– Amazon provides fulfilment center to store your products. Otherwise, one can rent a warehouse in the UAE. Therefore, you need not own a warehouse in the UAE to sell products online.

Documents required– Basic documents required to get an e-commerce trade license is passport and visa.

Resident Visa– In UAE, residency visa is not at all mandatory for getting trade license. A person with a tourist visa or visit visa holder can acquire trade license. For opening a business bank account residency visa is required. A person with residency visa or dependent visa can open an e-commerce company without changing visa status. In case of Free Zone, it is easy to set up business with an NOC from the existing employer.

Cost incurred for E-commerce License

The cost of obtaining E-commerce License may vary depending on various factors like location of the company, the legal structure of the company ,size of the company and so on. As a matter of fact, the cost of obtaining license may range from AED 15,000 to AED 50,000.

Pros for Setting an Ecommerce Business in UAE

• Low cost office Setup
• There are no constraints on use of currencies
• Easy access to warehouse and delivery service providers.
• 0% corporate tax
• Freedom to take back the earned profits and income.

Conclusion

E-commerce license is a must for doing e-commerce business in the UAE. It is however, easy to acquire a license here provided the procedures and documents are strictly taken care of. We, at Beyond View assist you in getting the license quickly and in a hassle free manner. Contact us for more details