The widespread usage of intelligent gadgets has risen dramatically in recent years, particularly with the Covid-19 epidemic, which cleared the way for the internet-based commercial industries.
With such a vast audience and severe competition, any business must now have an online presence. As a result, investors and entrepreneurs are increasingly eager to start a company that will be profitable if it is run online.
Dubai is the home of the investors and entrepreneurs to grow their businesses, even online.
The e-commerce business in the UAE is prosperous, specifically in Dubai. Therefore, every firm in Dubai wants to participate in the online community to observe the growth in their business. For that, you must obtain an e-commerce license. This treatise will teach you all you need to know about getting an e-commerce license.
Growth of E-commerce Industry in Dubai
According to the Dubai Chamber of Commerce and Industry forecast, the UAE retail e-commerce sector will reach $3.9 billion in 2020, up 53% year on year. In addition, by 2020, e-commerce will account for 8% of the retail industry.
The growth is visible in the E-commerce sector. Hence, if you want to know how to start an e-commerce business in Dubai, you first need to have an e-commerce business in Dubai and obtain an E-commerce license.
This page will serve you the required knowledge before you obtain one.
Various Kinds of E-commerce License in Dubai
The UAE has to offer numerous types of business licenses. The Department of Economic Development (DED) integrated the specific activities under an E-commerce license. In the Mainland, an e-commerce license is known as the portal license. However, Dubai offers three kinds of E-commerce licenses for the business, which are as follows:
1. E-trader License
You need to obtain an E-commerce license from the Department of Economic Development (DED). Those who have single ownership of their business can obtain an E-commerce license.
GCC nationals can get the license. However, one cannot open a shop or have a physical presence for their business under an E-commerce license.
2. Portal License
Portal license is only for the non-UAE nationals. A portal license is appropriate for making a listing website that includes reservations, products or services. For example, one can start an online business in Dubai that links the buyers and sellers with the port license.
3. Virtual Company License
A virtual company license was launched for the non-UAE residents to carry out the commercial business activities in Dubai. However, only three sectors are allowed under this license: designing activities, computer programming and related activities, and printing and advertising services.
Who Can Apply for an E-commerce License?
Not everyone can apply for an e-commerce license. Have a look at who can open an e-commerce business in Dubai:
- Individuals and home-based businesses can apply for an E-commerce license if they advocate and sell things online through websites or social media. Get to know more about making your e-commerce business a brand in Dubai.
- The E-commerce license is for freelancers who provide a variety of online services. For example, a single-person home-based firm that does not require a local partner can apply for an E trader license in Dubai.
- The E-commerce license in Dubai is appropriate for home-based businesses that do not require office premises, as Ejari paperwork is not needed.
- An E-commerce license is required for any online sales made using a legitimate social media account. This includes stay-at-home mothers and homemakers who sell handmade crafts, fashion attire, jewellery, and other goods and services on various internet platforms.
Approved Activities under the E-commerce License in Dubai:
There are certain business activities that the e-commerce license allows business owners to perform in their E-commerce companies in Dubai, which are listed below:
- Garments, textiles and gifts E-trading
- Publications and media materials E-trading
- Equipment E-trading
- Jewellery and stones E-trading
- Vehicle and transport means E-trading
- Household, professional goods E-trading
- Sports and recreational goods E-trading
How to Obtain an E-Commerce License in Dubai?
To obtain an e-commerce license, you need to follow the steps mentioned below.
1. Choose the Appropriate Company Structure
The first step is to choose the appropriate company structure that needs to be established. Dubai provides comprehensive options in terms of entity types for business setup. Some of the legal entities are stated below:
- Limited Liability Company
- Sole Proprietorship Company
- Partnership Company
- General Partnership Company
- Joint Venture Company
- Public Shareholding Company
- Private Shareholding Company
- Professional Company
First, make sure you go through each entity, understand them, and choose them accordingly. Then, select the one that suits your business needs and take further steps.
2. Choose a Strategic Location
Once you have selected the required business entity type, you need to choose a strategic location that suits your business needs to set up a physical office. Dubai, the heart of the UAE, offers lucrative business locations to form your company in Mainland, Free zone and Offshore. However, before selecting one, ensure complete information regarding each of them, as each holds specific business advantages.
3. Trade Name Registration
Next, you need to finalize the trade name. Since your business will be available online, choose a name that people remember easily.
4. Apply and Obtain an E-Commerce License
The next step is to apply for an e-commerce license issued by the DED. The issuance also depends on the location you have chosen to start with. If it’s a Mainland, the registration would cost you around AED 10,000. For instance, if it’s a Free Zone, the free zone authorities will approve the license.
5. Apply and Obtain an Initial Approval Certificate
An initial approval certificate acts as a NOC that needs to be issued by the Government Opportunities for you to start an e-commerce business. It serves as a non-renewable certificate holding a validity of 6 months.
6. Draft MOA and AOA
Next, you need to prepare the respective Memorandum and Articles of Association containing external and internal business affairs. It serves as one of the most critical documents for the business establishment.
7. Open a Corporate Bank Account
Last but not least, a corporate bank account needs to be opened to track and maintain business accounts. Opening a corporate bank account also helps to avoid any grievances regarding personal and business finances. Have a complete look at opening a bank account in Dubai.
Cost of Getting an E-commerce License:
The cost of getting an e-commerce license varies from the place and different business activities.
In Business Setup Worldwide, the cost started from AED 5500 without applicable visa charges.
In a nutshell, you can see that the license obtaining is a long process. The best way to get it done is to have a word with a business consultant who can shrink the process and get it done at a faster pace.
Obtaining an E-commerce license can give you trouble. We'll show you how to take advantage of your options online. Get assistance from the Business Setup Worldwide team and make the process easier. Our business experts hold industry experience and can help you obtain the license. Do not hesitate to contact us.