As the world is getting ready with the upsurge of E-commerce businesses, UAE is not far behind to become 100% active in e-commerce. In the last three years, 72% of the users in UAE have moved to the online format and made their first online purchase. The region is known for high internet penetration and literacy rate, the e-commerce is set to achieve a market of AED 40 Billion. It has become increasingly important that businesses increase their online footprint to get users attention. As UAE gears its free zones and aligns it to the digital demands, Commitbiz Business Setup Consultants provides you an in-depth detail on setting up an E-commerce business in UAE.
1) An appropriate license: A license from the Department of Economic Development is mandatory to form a web-based company. If the business is to be set up in a Freezone, the license from a relevant free zone authority is required. The type of license issued will depend on the nature of your online business. For established companies, no further licenses are required.
2) The need for Office Space: An e-commerce company can be an aggregator or an online version of an international store/ chain. Depending on the nature of the business, one should consider setting up a physical office. Dubai-based companies must have physical office space to be considered legal.
3) Website development: As websites are a gateway to the online world, to set up an online business, websites are mandatory. Developing an interactive platform that enables dynamic interaction between producers and consumers is the primary goal of the platform. The purpose is to engage the two ends in a long-term value chain and high transactional processes. The following steps need to be taken when establishing your web presence:
a) Register a domain name:
Domain name is the name or address you use for your website (often the company’s name). For established business or startups, the name of your business matters as you would like to create the image in your users/consumers. Trade names matter regardless of the firm's nature. Hence registration of a domain name is a prerequisite to set up your web establishment.
If you are an online shopping portal, there are a few additional factors to consider:
b) Online payment gateways:
The number of users opting for a cashless mode of transaction is on the rise, and hence an online payment gateway is a necessity for online outlets. For selling products online (whether tangible or intangible), a Secure Payment Gateway Options available to businesses include credit card payment, cash on delivery and pre-paid card systems such as PayPal.
Business has to be registered with the relevant emirate’s ports and customs authority if the online business is into importing goods/ products from abroad and selling it on the site. An importer’s code is assigned to the business, and customs duty is levied to the imported goods. Free Zone companies are exempt from customs duty; however, they are restricted to selling the products/ services within the free zone or outside the country. If the company is selling to the UAE market (outside of the free zone), the customs duty has to be paid, and a local commercial agent has to be appointed.
For setting up an E-commerce business in UAE, one of the crucial steps is to import your offline products and categories to your online store. This depends on your service/ products and how much information you wish to share with the consumers. As mentioned before, with the growing demand for an online imprint, information available on the internet has become a vetting resource for the user to purchase products either offline or online. Hence, more the options available to consumer better it is for the sale of those goods or products. At Commitbiz Business Setup Consultants, we take care of the end to end lifecycle of your business setup needs. To further inquire about our services, kindly reach out to us at [email protected]