E Commerce License Dubai: Benefits , Cost and Procedure

E Commerce License Dubai: 10 Things I Wish I'd Known Earlier

The easy accessibility of internet facilities, in addition to the growing use of smartphones, has helped accelerate the expansion of the e-commerce business. Shopping online for clothing, furniture, and other items is a fad these days. It should not come as a surprise that the e-commerce business is flourishing in every part of the planet. E-commerce makes things easy for a person since it is not time-consuming, and with internet connectivity, one can purchase anything online with a simple click of a button. With it, your organization may reach a larger spectrum of people. For example, if you build a shop at a local market in your nation, the target audience for your company is restricted but in the case of e-commerce, the organization may reach an expanded pool of consumers owing to a bigger target market with no obstacles.

In the case of Dubai, the market is as profitable as any. It is anticipated that the e-commerce business in the UAE would be valued at $10 billion (Dh36.7 billion) by the end of 2018. But if you want to establish an e-commerce firm in Dubai, you need to go through a series of steps, i.e., from picking a layout of the website to obtaining your license accepted.

About E-Commerce License Dubai

Incorporating an e-commerce firm in Dubai is straightforward, but you can’t disregard the rules and regulations while doing so. The Dubai authorities do not allow any random individual to create an e-commerce business and start selling things. If you want to start up an online company in Dubai, you have to apply for an e-commerce license. It is issued by the Department of Economic Development (DED) in Dubai. Your company is not regarded lawful if you do not have a license for it. There is a protocol you need to follow when applying for this license.

How to Obtain an E-Commerce License in Dubai?

Research done by Google suggests that 91.9 percent of the population in the UAE has an internet connection. So, considerations like the rising utilization of the internet, attractive tax environment, etc. suggest that running an e-commerce company UAE may be beneficial. You need to go through the following processes to get an e-commerce license in Dubai:

1.Decide a Legal Structure for your Business

The first step to acquiring an e-commerce license in Dubai is to select the legal form of your organization. In plain terms, whether to set up an LLC (Limited Liability Firm), one-person company, branch of a parent company, representative office, etc. LLC establishment and Branch offices are most frequent in Dubai since they come with an inbuilt set of benefits.

2. Choose a Location

The location here does not indicate the site where you will set up a store or an office, but the place from where you wish to receive your license. Dubai has two sorts of zones, namely (1) Free Zone, and (2) Mainland. A free zone permits you to have 100 percent control of your organization. In the case of the mainland, you need to have a local sponsor whose ownership in the firm should be at least 51 percent, and the remainder would be your share. Similarly, both the zones have their share of pros and downsides. You have to analyze all the facts and select where you want to set up your internet company.

3. Register a Trade Name

Since your firm does not have any physical presence, select a name that people will remember quickly. The trade name may be utilized as your domain name so that people can quickly discover your firm online. Make sure that your domain name does not match that of any other current organization as it may lead to a legal issue.

4. Apply for a License

After picking the location, you have to apply for an e-commerce license. The Department of Economic Development gives this license; so it is vital to contact them first. For a business set up on the mainland, you have to pay roughly AED 10,000 to the DED for trade name registration, first approval, and issuing of the license. In case you are intending to start up inside a free zone, the license will have to be secured from the applicable free zone authorities. The sort of license provided depends upon the nature of your internet company.

5. Apply for Initial Approval Certificate

An Initial Approval Certificate is a NOC from the authorities to establish an e-commerce business in Dubai. It will be good for 6 months, and it is not renewed. One may request for initial approval certificate at the same time as filing their trade name approval application.

6. Draft a MOA and Local Service Agent Agreement

You have to draft a Memorandum of Association (MOA) with the sponsor and submit it to the DED. If you pick the location of your firm on the mainland, then you have to complete this step. Any law company may write out the memorandum which must include the particular arrangements and ownership share among all partners. Companies starting up in free zones may skip this stage.

7. Register a Physical Office in Dubai

The next step would be to set up a physical office in Dubai since the authorities in Dubai have made it obligatory for a business to have an office to consider it a legal organization.

8. Final Approval of the License

Once you complete all the following processes; you will acquire a business license between 1-7 days, depending on the authorities.

9. Import/Export Requirements

Your firm must be registered with one of the ports and customs administrations so that you may acquire an importer’s code. UAE levies 5 percent customs charge on imported products. The firms that enter under the free zone will not have import duty as they have to offer their product/services inside the free zones.

10. Opening a Corporate Bank Account

Once you have successfully registered for an e-commerce trade license and established your firm, you will be able to set up your corporate bank account. Since the application procedure is short and straightforward, you only have to check which bank meets your demands.

E-Commerce License Cost in UAE

The precise e-commerce license Dubai cost will depend on numerous aspects. These include the size of the firm, the number of visas sought for if office space is needed as part of the package, and options regarding the free zone or mainland. However, to indicate pricing, one should anticipate spending anywhere between AED 15,000 and AED 50,000 depending on the needs.

If you are wanting to keep start-up expenses low, starting up in a free zone is generally the best strategy.

Advantages of Obtaining an E-Commerce License in Dubai

Here are the benefits of acquiring an eCommerce license in Dubai -

• Autonomy to repatriate money and income
• No currency restrictions
• 100 percent foreign ownership in the free zones
• 0 percent corporate and personal tax
• Low operating expenses
• No import tariffs on e-commerce license
• Resident visa given for 3 years

Conclusion