Shopping is one of life's greatest pleasures. Online shopping has made a lot of changes in the different industries. It has opened doors to new and endless opportunities.
Now the world has gone global; the world is one family. There is no need for you to leave your house if you don’t feel like it, because nowadays you can shop for your favourite thing for any country at any place and all that by just sitting in front of your gadget.
Setting up an e-commerce store is a great way to make retail sales. However, in Dubai and the UAE, this requires an E-commerce license. The UAE e-commerce licence is also known as 'internet trade licence' or ITL and covers both the sale of tangible goods and non-tangible items.
Types of E-commerce Business License in Dubai
Since the e-commerce business has been globally expanding, it has widened the opportunities for business owners at different levels. Thus, the Dubai Department of Economic Development (DED) introduced several E-Trading License activities, which include:
1. E-Trader License
This license is given to those who wish to provide services or sell products online. The E-traders license in UAE is monitored by the Department of Economic Development and can only be obtained by UAE and GCC nationals residing in Dubai.
An e-trader license can be obtained only under single ownership. You cannot have a physical office space or open a shop with this license.
2. Portal License
The Portal license is yet another eCommerce license in Dubai that can be obtained by non-UAE nationals.
By obtaining this license you can start an online business in Dubai– to link buyers and sellers. A portal license is also best for a listing website that products, services, or reservations.
3. Virtual Company License
The virtual company license was recently launched by the Dubai Economy and DIFC. The virtual company license permits overseas investors and non-residents of the UAE to undertake commercial activities in the region.
Though this license is limited to only three sectors – they are computer programming and related activities, designing activities, services related to printing, and advertising.
Advantages of Obtaining an E-commerce License in Dubai
Holding an e-commerce license can be a boon for an investor, as it provides the following benefits:
- No currency restrictions which encourage global trading
- The autonomy to repatriate the revenue earned and the capital invested initially
- Complete ownership of free zone company
- Low operational costs as compared to the offline mode
- Flexibility to obtain a resident visa for 3 years
Documents Required to Obtain an E-commerce Dubai License
The set of papers that are to be presented to the government authorities includes:
- Duly filled application form
- Passport/visa copies of the shareholders
- Identity and address proof of the business investors and shareholders
- Copy of sponsors passport/ Emirates ID
- Local service agreement/ Civil works agreement
- NOC from the relevant authority
- Memorandum & Articles of Association
How to Get E-commerce License in Dubai?
Obtaining an e-commerce trade license in Dubai requires the business investors to follow a specific set of steps which involves:
1. Decide on the Legal Structure
The first step to obtaining an e-commerce license in Dubai is to decide the legal structure of your business.
In simple words, whether to set up an LLC (Limited Liability Company), one-person company, branch of a parent company, representative office, etc.
LLC formation and Branch offices are most common in Dubai as they come with an innate set of advantages.
2. Choose a Jurisdiction
The location of Dubai is a perfect platform for both new and established business entities. A few of the options that the location holds include:
- Free zone
3. Register Your Trade Name
Choosing a brand name is one of a few things that is required to start your business. You can't really begin another important process until you have settled on a name for your company, product or service.
4. Apply for a Business License
Getting your products ready to sell online? Then you'll need a business license. In Dubai, if anyone invests in the Mainland, the Department of Economic Development (DED) issues the same.
On the other hand, if you select a free zone, then the Free Zone Authority (FZA) will be liable to issue the permit.
5. Apply for an Initial Approval Certificate
An Initial Approval Certificate is a NOC from the authority to start your e-commerce business in Dubai. It will be valid for 6 months, and it is not renewable.
One can apply for initial approval certificate at the same time as submitting their trade name approval application
6. Draft and Submit the Required MOA & AOA
You have to draft a Memorandum of Association (MOA) with the sponsor and submit it to the DED. If you select the location of your company in the mainland, then you have to follow this step.
Any legal firm can type out the memorandum which must specify the special arrangements and ownership percentage among all partners. Companies setting up in free zones can skip this step.
7. Finalize a Physical Space
The next step would be to set up a physical office in Dubai as the authorities in Dubai have made it mandatory for a company to have an office to consider it a legal entity.
8. Comply with the Import / Export Requirements
Your business must be registered with one of the ports and customs authorities so that you can receive an importer’s code.
UAE imposes a 5% customs duty on imported goods. The companies that come under the free zone will not have import duty since they have to sell their products/services within the free zones.
9. Open a Corporate Bank Account
Once you have successfully applied for an e-commerce trade license and established your business, you will be able to set up your corporate bank account.
Since the application process is quick and simple, you just have to look into which bank suits your needs.
E-commerce business has become a necessity since people are connecting globally through the internet. Dubai, over the last few years, has seen a gradual rise in the online retail business. In the coming years, the e-commerce sector will add more revenue to the economy.
So, if you think you are ready to take the plunge and take your small business or idea to the cloud, then an e-commerce business could be a nice option to consider.
Commitbiz is here to assist you with all the legal proceedings at ease. Contact us now-we’d be glad to assist!
1. Who can obtain an e-commerce license in Dubai?
Only those who want to sell digital products worldwide can obtain an E-Commerce License in Dubai.
2. Do I need an office to obtain the license?
A precondition to the license is to obtain and maintain a registered office.
3. What are the e-commerce activities introduced by the DED?
- Jewellery and precious stones E-Trading;
- Garments, Textiles and Gifts E-Trading;
- Publications and Media Materials E-Trading;
- Household, Professional and Personal Goods E-Trading;
- Vehicles and Transport means E-Trading;
- Equipment E-Trading;
- Sport and Recreational Events Tickets E-Trading.
4. When do I need a DED e-commerce license for my online trading activity?
If you target the local market (your future clients are within Dubai), such activity requires the DED e-commerce license.
5. What is the cost of a Dubai e-Commerce license?
The exact e-commerce license cost in Dubai will depend on many factors. These include the size of your business, the number of visas you apply for, whether you require office space as part of your package and your choice regarding the free zone or mainland.