One of the most significant developments in the retail industry in the UAE is the growth of e-commerce. UAE is currently the most advanced when it comes to the e-commerce market in the MENA region, according to the Visa Middle East and Dubai Economy study. The study revealed that 23% annual growth is expected between the year 2018 and the year 2022. And due to the COVID-19, more and more online users are encouraged to buy online. Another study revealed that 40% of online shoppers in the UAE and Saudi Arabia are buying more online than they were before the COVID-19 pandemic.
According to research commissioned by the global consultancy firm, Kearney Middle East, 48% in the UAE and 69% in Saudi Arabia would remain to buy more online even after the COVID-19 pandemic. Moreover, the World Economic Forum has estimated the UAE’s 2020 e-commerce market at $27.2bn, with similar growth across MENA.
Several key factors contributed to the UAE’s e-commerce positioning, and one of them is UAE’s tech-savvy consumers and the rise of e-commerce businesses. The UAE’s Government also encourages businesses and consumers to explore more payment options such as cashless payments by enforcing smart Government service transactions.
How to Obtain an E-Commerce Trade License in the UAE?
1. Choose which UAE jurisdiction you would like to register your e-commerce business.
There are two common license options that you can choose from – Free Zone or Mainland. The first option is setting up in a Mainland. This would give you the freedom to trade directly to the UAE local market and give you access to some attractive UAE Government contracts. The second option is setting up in one of the UAE Free Zones. If you choose to set up in a Free Zone, you will benefit from its 0% tax rate and full customs tax exemption among the others and repatriate 100% of capital and profit. However, you will require a 3rd party service or distributor if you would like to trade directly in the UAE local market.
You can also read: Dubai DED License Options for Entrepreneurs
You would also need to decide on your company’s legal structure, whether to choose sole establishment, LLC, civil company, branch, or representative office.
2. Decide on your company name and register a Trade Name before the license application.
When choosing a company name, keep in mind that UAE is strict when it comes to names that contain any references to Allah or Islam, offensive languages. A business setup advisor can guide you on this and check if your chosen name is available to be registered.
3. E-commerce License Application
If you decide to register your company in a UAE Free Zone, you can apply directly to the Free Zone authority or get professional guidance from one of Smart Zone’s Business Setup Advisors. If you prefer to set up in Dubai Mainland, you can either directly apply to the Dubai Department of Economic Development or in the Emirate you wish to set up or avail Smart Zone’s professional services for hassle-free company setup.
License Requirements:
Whichever jurisdiction you decide to register your company in, you will be required to provide passport copies, visa copies, application form, Emirates ID, and some other documentation. To avoid any misinformation or wasted time doing the e-commerce license registration, and for you to focus on your business, it is best to work with well-knowledgeable and experienced professionals in the industry who will handle every aspect of the process and liaise with the authorities on your behalf.
Once all documents are gathered, together with a Tenancy Contract and Ejari, if applicable, submit the application to the relevant authority for final approval.
4. UAE Visa Application
Once you have registered your e-commerce trade license, you can now apply for UAE Visas. The number of UAE Visas you can apply for your company varies on your business’s size and the jurisdiction you chose to set up under.
5. Bank Account Opening
The final step in registering an e-commerce license is opening a corporate bank account. There are several local and international banks available to choose from in Dubai. Decide on which bank has the easiest access and criteria your business is most likely to be accepted. Talk to one of our advisors; they can give you options on the most suitable bank for your business.
E-commerce License Cost
The cost varies from your choice of jurisdiction, business size, whether you require office space, the number of visas, and more. However, depending on your requirement, you can expect to pay around AED 5,750 to AED 20,000. Talk to one of our business setup advisors to find out about the cost-effective license set up in the UAE for an e-commerce business. Call +9715 523 30077 today.
