People in the UAE are moving from traditional shopping to online. Moreover, most people prefer online shopping due to its convenience. Therefore having an e-commerce trade license in terms of owning an e-commerce business can prove fruitful.
This transformation has made entrepreneurs and business investors open an e-commerce business in the UAE. But, of course, you need an e-commerce trade license for that.
Read the blog to know more about the e-commerce trade license.
Types of E-commerce Trade License Dubai
To obtain an e-commerce license in the UAE mainland, you must apply to the Department of Economic Development (DED). There are free zone authorities for the e-commerce license.
There are three types of e-commerce license in the UAE, which are as follows:
This authorization is offered to those who want to provide services or sell things online. The Economic Development Department regulates the E-traders license in Dubai, which may only be obtained by UAE and GCC residents residing in Dubai. Only a sole proprietorship can receive an e-commerce license. You cannot establish a physical office or create a store with this license.
Another Dubai e-commerce license that non-UAE nationals can obtain is the portal license. You can launch an internet business in Dubai that connects customers and sellers by receiving this license. Portal permission is also recommended for websites that advertise items, services, or bookings.
Virtual Company License
The Dubai Economy and DIFC recently introduced a virtual firm license. The virtual firm license enables UAE investors and non-residents from other countries to conduct business. This license, however, is only valid for three industries: computer programming and associated operations, designing, printing, and advertising-related services.
How to Get E-commerce Trade License UAE
Step 1: Decide on your business jurisdiction.
Choose where you want to launch your company in the UAE. You have the choice of forming a business on the mainland or in a free zone, but each has its own set of benefits and drawbacks. If you want to open your business in UAE mainland, learn more about UAE mainland company formation.
Step 2: Establish a legal business Structure
Select the proper legal structure for your company. In Dubai, there are four types of legal business structures:
- Sole Proprietorship
- Limited Liability Companies
- General Partnership
- Branches of Foreign Corporations
The most common legal company entity selected by entrepreneurs and business executives joining the market is the Limited Liability Company (LLC). Learn more about forming a Limited Liability Company in Dubai.
Step 3: Pick a Company Name
Design and register your trade name; as an e-commerce company, it is preferable if the trade name or business name follows the rules and is easy to remember.
There are also certain restrictions on the trade name, such as that it cannot contain filthy or indecent language or disrespect the general public. In addition, God's name or divine attributes in Arabic or English, such as Al Qader, Al Aleem, or Al Razzaq, should not be used in the name.
Step 4: Obtain an E-commerce License.
Apply to the Department of Economic Development for an E-Commerce license (DED). Get your e-commerce license by submitting the required documentation. Learn in details about the e-commerce license in Dubai, if you want to open a business in the emirate.
Step 5: Obtain the First Approval
Apply for the initial approval certificate after acquiring an e-commerce business license. The first permission certificate is a letter from the authority stating that they have no objections to starting your firm. If the firm is located on the mainland, DED can receive this information through the free zone administration.
Step 6: Create the Memorandum of Agreement (Memorandum of Association)
Prepare and file a Memorandum of Association for your firm and the sponsor, partner, or investor to the DED.
Step 7: Find an Office to Rent
Register your physical office in Dubai per your company's needs; this might be a flexible-office space address that must be registered following regulatory regulations.
Get Final Approval in Step 8
Obtain final permission after completing all of the preceding stages. The business license takes typically 1-7 days and allows you to commence full-fledged operations.
Step 9: Make an Appointment with the Port and Customs Authorities
Register your firm with the UAE's port and customs authorities to obtain an importer's code. In the United Arab Emirates, imported goods are subject to a 5% customs fee. However, import tariffs will not apply to enterprises operating in free zones since they must sell their goods or services inside the free zones.
Step 10: Establish a Bank Account
Create a bank account for all of your future company transactions.
Documents Required for E-commerce Trade License
The documents needed for the e-commerce trade license are as follows:
- First, all stockholders' passports must be copied.
- All stockholders' visas must be copied.
- Emirate ID copies of the sponsors
- Civil works deal or local service agreement
- A No Objection Certificate (NOC).
- An outline of an MOA (Memorandum of Association).
Cost of E-commerce Trade License
When you think about seeking a permit, the expense is the first thing that springs to mind.
E-commerce licenses in Dubai start at 1070 AED (295 USD) for the "E-trader" license. This license is only available to current UAE nationals. However, at 11,500 AED, choices are available if you are not a resident (3,150 USD).
The cost varies depending on the different places.
The company formation process or obtaining the e-commerce trade license in the UAE is not without hurdles.
Business Setup Worldwide can assist you in the process. Our business professionals provide you with obtaining your e-commerce trade license.
For any further details, contact us. We’d be glad to help you.
1. How long does it take to get an e-commerce license in the UAE?
2. What is the growth of e-commerce sector in the UAE?
23% each year.
3. What is the expected growth rate in e-commerce sector?
32% by 2025.
4. What is the UAE e-commerce market value?
Over $5 billion in 2021.