Consumer behavior towards online shopping has changed in the last few years. As more people are delving into teleshopping, e-commerce businesses are gaining acceptance globally more rapidly than ever before. Dubai, with its impressive internet penetration rates and high disposable income, offers an ideal environment for starting an e-commerce venture. While the country overall is the largest B2C e-commerce market in the Middle East, Dubai boasts over 60% of online buyers in the GCC itself. This growing market has, thus, spurred the interest of foreign investors, making them eager to know how to start E commerce business in Dubai.
Requirements for E commerce company formation in UAE
One of the basic requirements for an e-commerce company in Dubai is an e-commerce license. To secure this license, you need to meet certain criteria:
- Must be 21 years or older
- Hold a valid Emirates ID
- A legally registered company name
- Timely fee payment
- Registration with the Department of Economic Development (DED)
- Annual renewal of license
How to start E commerce business in Dubai: Step-by-step procedure
The UAE authorities have established a simplified version of E commerce company formation in UAE: –
Discover your market –
Before choosing a business model, take a look into the market trends, customer needs, and the Unique Value Proposition of your company. Based on the collected data, growth potential, and business needs, choose the right model from the B2B, B2C, or C2B modules.
Find a suitable location
Location is a critical consideration while planning a business setup in Dubai. Although physical office space is not mandatory for an e-commerce business, you need to select a free zone or the mainland to get a business license. While free zones provide benefits like zero personal tax and corporate tax, 100% repatriation of profits, and minimal customs duties, the Mainland allows both domestic and international trade.
Select a trade name
Trade name registration is simple. However, there are certain considerations to choosing a name for your company. For instance, the name should not contain any offensive, religious, or derogatory terms. It should not resemble the names of other businesses in the country. Most importantly, the chosen name should be legal and available for registration.
For further details on company naming rules in the UAE, get in touch with the business consultants at Shuraa.
Apply for an e-commerce license
Once you have found a suitable location and trade name for your e-commerce business, apply for a license from the respective authorities, depending on your location. The Department of Economic Development (DED) issues licenses for Mainland companies while free zone licenses are issued by the local authorities of the designated zone.
With an e-commerce license, you can conduct your business on a variety of digital platforms, including social media. Free zone companies can partner with a local distributor to trade directly with the local market.
Develop a website
Your e-commerce business must have a stable, optimized, user-friendly, and secure website where the customers can access your product and services. Hence, to establish an online presence for your website, you must first obtain a domain name. You can seek help from professional website developers who will make it easier for you.
Establish a payment gateway
Since your business is solely managed online, you would require a payment gateway to receive payments from the customers. Make sure your payment gateway is in accordance with TRA (Telecommunications Regulatory Authority) guidelines, the primary authority responsible for electronic transactions.
Support for customers and logistics
Logistics is a significant facet of e-commerce ventures. Hence, the business owners must keep the products in stock and make them available for sale on time. The timely delivery of goods, customer support, technical aspects, database management, and import-export facilities are the most crucial factors for the survival of the company. Additionally, to build the logistics in the UAE, you can also seek third-party logistics support.
Get your license
Dubai offers multiple options for e-commerce licenses based on the business activity and the nationality of the company owner. To sell products online, you can get an E-trade license, which is a single-ownership license. For non-UAE nationals, there is a portal license, which allows linking buyers and sellers online. Lastly, there is a virtual company license that allows overseas investors and non-UAE residents to do business in the region.
To get more details on different e-commerce licenses in Dubai, contact Shuraa Business Setup.
Get Import-Export Code (IEC)
Businesses need to get an Import-Export Code (IEC) issued by the relevant customs department in the UAE to export the produced goods, import goods from a foreign country, or re-export goods earlier imported into the country. Dubai and other Emirates follow a unified customs approach that facilitates a favorable environment for import & export. Once the businesses successfully obtain their trade license, they can easily attain the UAE Import-Export Code (IEC) as well.
Benefits of starting an E-commerce company in Dubai
Dubai has effectively turned itself into a lucrative destination for entrepreneurs and investors worldwide. Following the trend, it has managed to embrace the Internet and encourage e-commerce businesses across the country. At present, the e-commerce market of UAE is said to be the most advanced market in the whole MENA region.
Let’s look at some of the benefits of launching an e-commerce business in Dubai:-
- Growing trend of online shopping – Due to the developing technology, people of Dubai are relying more on the internet for daily activities, be it for entertainment or shopping. The introduction of the e-commerce market has made it more convenient and desirable. Thus, the growing online shopping trend has led to the exponential growth of e-commerce businesses in the UAE.
- Increasing tech-adept consumers – People are connected to the internet most of the time. Hence, they find online shopping more convenient than traditional brick-and-mortar shops. They can research their desirable products online, get reviews on the products and the sellers, and accordingly make their buying decisions. Thus, this growing number of tech-savvy consumers ensures significant growth for e-commerce in the UAE.
- Growing preference for local online stores – The majority of consumers support local businesses. Hence, they prefer local UAE-based online stores more than foreign-based online ventures. Moreover, local shopping facilitates quick delivery of orders.
- Support from the government – The UAE government has implemented new rules and regulations and modified the existing ones to streamline the process of how to start E commerce business in Dubai. Besides, it always proactively supports e-commerce businesses in the UAE.
- World-class infrastructure and skilled workforce – The infrastructure of Dubai is one of the best in the whole world. Besides, it is a humble abode for a large number of skilled professionals and workers. Thus, the availability of world-class amenities and affordable workspaces contribute considerably toward the success of e-commerce businesses in the UAE.
Launch your business in Dubai with Shuraa
If you are thinking of establishing an online presence through an online venture but have no idea how to start E commerce business in Dubai, then you are in the right place. The company formation specialists of Shuraa Business Setup have helped various entrepreneurs across the world start their online business in the UAE. Their broad range of services including business registration, licensing, documentation, PRO services, visa assistance, and more makes the process easier, thereby helping clients focus more on their core business objectives.
For further information and assistance, connect with the experienced consultants of Shuraa at +971 44081900 or info@shuraa.com.
