E-commerce is one of the largest business sectors in the world and in the United Arab Emirates, it has seen substantial growth. Over the years many new E-commerce startups have been started in Dubai and many more existing companies have moved their entire setups there or have opened new branches.
Dubai E-commerce Business is not just for companies as individuals can take part in it as well. As for a place, Dubai is one of the places where you can conduct your e-commerce business. It has a first-class infrastructure, a government that is friendly to business, and a great location.
But to conduct online business in Dubai you need the E-commerce license. In this guide, we will tell you what this license is, what you need to get it, how you can get it, and of course how E-commerce business works in Dubai.
E-commerce License in Dubai
Issued by the Department of Economic Development is a legal permit that allows you to set up and run an online commerce business in the Emirate. With this license, you can buy or sell goods and services online, do online trading, and take part in other such commercial activities.
Types of Online Business License in Dubai
Under the umbrella of the e-commerce license, there are several types of licenses that are issued for specific commerce-related activities and they are as follows.
E-Trader License
An E-Trader License is issued for online trading and is issued to both individuals and companies. However, the condition for issuing this license is that there cannot be an official office and the trading is solely done from home.
Commercial E-commerce License
This license is issued for commercial selling of goods and services as well as trading. This license is issued to businesses with traditional commercial activities, and having a physical office is a basic requirement.
Virtual Company License
This license is issued to businesses and companies that are not physically present in Dubai but are involved in commercial activities in the emirate. This license is mainly for foreign investors and traders who want to conduct business in Dubai.
Portal License
This license is issued to businesses that operate websites, marketplaces, and portals that are used for selling and buying goods and services and these businesses essentially act as intermediaries. These businesses also need to have a physical office to conduct their business.
Requirements for an E-commerce License in Dubai
To get an E-commerce License in Dubai, whether on the mainland or in one of the free zones you need to meet the requirements set by the government and these requirements are as follows.
- A bona fide business plan is the first requirement to get this license.
- You need to file an application with the Dubai Department of Economic Development and have approval.
- Businesses on the mainland require a memorandum of association (MOA) as well as a partner with a 51% share in the business.
- If the business is being set up in one of the free zones, then you need to have approval from the free zone authority, and in the free zone, foreigners can have 100% ownership.
- You need to have a physical space and the necessary infrastructure with online security to conduct your business.
- Rules and regulations set by the Department of Economic Development and the UAE government need to be complied with all the time.
- You need to submit all the necessary documents like copies of passports, visas, leases, bank statements, and other such documents.
- Lastly, you need to pay the necessary fees to get the license.
Steps to Getting an Online Business License in Dubai
If you have met the requirements set by the government for the license, then it is very easy to get and follows essentially the same path as stated above and is as follows.
- As there are different types of E-commerce licenses, choosing the right one should be the first step.
- You also need to submit a business plan with your application as mentioned before
- Next, you need to find the right free zone or a site on the mainland for your office.
- If the site is on the freezone then you need to get authorization from the freezone.
- If the site is on the mainland, then you need to get a sponsor and the MOA.
- After that, you need to find an office space and secure it with a lease.
- Next, you need to gather all the necessary documents as stated above in the requirements section.
- Now that you have done all of the above and gathered all the documents you need to file an application with the Dubai Department of Economic Development.
- After filling out the application and paying the necessary fees, you need to wait for the government to evaluate your application and approve it.
Possible locations for your Dubai E-commerce Setup
Dubai has no shortage of good locations for you to set up your online commerce business. But the first step before selecting a location is choosing between the mainland or the free zones. On the mainland not only do you need to get a partner or a sponsor but you are also eligible to pay taxes.
In the free zones, you can have complete ownership of your business and you don’t have to worry about taxes either, as most free zones are tax-free, except for certain conditions. So free zones are the best and most obvious choice in most cases and here is a list of the main ones.
- Meydan Freezone: This freezone is known for its commerce-related activities, particularly in the area of recreation and entertainment.
- SPC Freezone: This zone is purpose-built for all things media-related and has a lot of commercial activity surrounding publishing and printing of content.
- Shams Freezone: This is a technology-oriented zone for entrepreneurs and startups particularly in the media sector, that are huge markets for E-commerce.
- Dubai Multi Commodities Centre (DMCC): This zone is designed for all kinds of commercial activities and has a large presence of international businesses.
