E-Commerce Licence in Ajman Free Zone

by Zaara 15, Jul 2017

E-Commerce Licence in Ajman Free Zone

Ajman is located on the Arabian Gulf coast, and is the smallest of the seven emirates in the United Arab Emirates, with an area of about 260 sq. km. Ajman Free Zone was established and granted autonomous status in 1988 by H.H. Sheikh Humaid Bin Rashid Al Nuaimi, the Ruler of Ajman, under Amiri decree no. 3 of 1996.

Ajman has quite a strategic geographical placement: at the ingress of the Arabian Gulf, in the vicinity of Sharjah and Dubai, with convenient accessibility to four ports and two international airports. Thus, Ajman Free Zone is aptly placed to serve the eastern and western markets. Ajman Free Zone is the only free zone in Ajman and has played a pivotal role in burgeoning commercial developments in Ajman over the last 20 years. Ajman Free Zone Authority (AFZA) is the governing body responsible for issuing business licenses and registering companies in the free zone.

Business Licensing in Ajman Free Zone

To carry out a business activity in Ajman Free Zone, a business license is required, according to the free zone regulations. For company formation in Ajman, the premier step is a selection of the type of business activity. Subsequently, one has to decide upon the legal business structure and reservation of the company name.

There are the following options available for a business license in Ajman:

  • National Industrial Licence: To be granted a national industrial license, a company must meet the following criteria:
    • It should be registered within the GCC (Gulf Cooperation Council), and GCC national(s) must own a minimum of 51% of its shares
    • At least 40% of the manufacturing processes of the company should be conducted in the free zone

Companies holding a national industrial license are eligible for duty-free customs fee to member states of Arab Gulf Cooperation Council.

  • Trading Licence: If a foreign, UAE or free zone establishment wants to perform trading activities in Ajman Free Zone, it is issued a trading license.
  • Industrial Licence: A foreign, UAE or free zone entity wishing to carry out manufacturing activity in Ajman Free Zone is issued an industrial license.
  • Professional/Service Licence: A foreign, UAE or free zone entity looking forward to purveying professional/service activities in Ajman Free Zone is issued a professional/service license.
  • E-Commerce Licence: AFZ issues e-commerce licenses to a company to carry out business in electronic trading activities, and also provides technical and marketing support to investors.

More on E-Commerce Licence

E-commerce license is a new license category for e-commerce enterprises which will facilitate online business entrepreneurs’ partnerships with the free zone to tap into the growing e-commerce segment of the GCC and the region. The new license category will allow businessmen to leverage the growth potential of e-commerce across B2C as well as B2B opportunities.

Earlier, entrepreneurs who wished to engage in e-commerce activities had to choose a normal trading license category with specific activities that were akin to the e-commerce activities. This tended to create a lot of uncertainties for the investors as well as regulators.

There is immense potential for e-commerce in the UAE and the GCC, with around 42 percent of the population reportedly making online transactions. As a matter of fact, the Ajman Free Zone announced a rise in the number of e-commerce licenses issued by it to a large variety of regional and global digital companies by 35% in 2016, compared to the previous year. This surge in the demand for e-commerce licenses was driven by the convenience it offers in terms of registering new enterprises through its e-services platform, coupled with the facility to do online transactions from anywhere in the world.