Over the last few decades, the e-commerce company or electronic commerce business is witnesses an upsurge all over the world and Dubai is no exception with the market here being lucrative enough to catch hold of investors.
Basically, e-commerce refers to the buying & selling of products or services using web technology an online payment gateway for financial transactions.
Being a hub to 60% of all the online buyers of the UAE couple with having advanced technology infrastructure & a well develop logistics system indeed makes Dubai a retreat for opening an e-commerce company over here. Moreover, the Government of Dubai is supportive enough and promoting foreign investment into this sector.
Thus, if you are looking to invest in e-commerce business in Dubai, then indeed it’s a good idea. However, you need to go through a number of mandatory procedures and documentation required to begin your e-commerce business which is discussed below.
E-commerce company registration in Dubai
For setting-up an e-commerce Company in Dubai, the first thing you need to think about is where in Dubai your company will carry out its activities.
Those interested in starting an e-commerce business in Dubai can register it in either the Dubai mainland or in the free trade zones.
If you would like to expand your business locally as well as globally, it is wise for you to build up your company in Dubai Mainland.
However, the investor must keep in mind that in order to set up an LLC company, it is obligatory to have a local sponsor hold 51% of the ownership shares.
On the other hand, if you would like to disseminate your business globally only, then it is wise for you to build up your company in the free trade zone.
The companies formed here allow full (100%) ownership to the foreign citizen.
While Dubai Mainland e-commerce companies must register with the Department of Economic Development (DED) in Dubai, free zone companies must register with the free zone authority.
Pre considerations for opening an e commerce business in Dubai
The next step involved is to outline your business activities as this will help you determine the right license & setup type for your business.
For this, there are a few aspects that need to consider which comprise:
- Determining your service – Of note, every e-commerce business is not the same. Basically, the online store involved in selling physical products in Dubai regard as a regulated activity and for which you require to obtain a license.
- Select and reserve your company name – You are required to reserve your business or trade name and obtain an initial approval certificate from the DED.
- Draft MOA – Ensure the Memorandum of Association (MOA) is drawn out and approved by all the partners or shareholders of the company. This has to be notarized in court.
- Forming a Legal Business Entity – Before starting your e-commerce company, decide on the type of business structure you need. The decision will also depend upon the jurisdiction that you have selected. Basically, there are four main types of business entities from which you can select.
- Sole proprietorship
- General partnership
- Limited Liability Corporation (LLC) – This is the most preferred among the investors and entrepreneurs
- C Corporation
- Office Space – In spite of being an online business, it is mandatory for an e-commerce company to have physical premises or an office in Dubai that will fully legalize your business. In case, of rented office premises arrange your tenancy contract as soon as possible.
- Initial Approval Certificate – This is an important document required before starting your e-commerce business which is issued by a relevant authority of mainland and free zone. To be noted, this certificate is valid for a period of six months and cannot be renewed.
Licensing requirement
The most important step in the opening of an e-commerce business is to obtain a Dubai e-commerce license. In case your e-commerce company set up will be in Dubai mainland, the main authority to contact is the Department of Economic Development (DED). Alternatively, if you want to set up this business in any other free zones in Dubai, then the required license will be issued by the relevant authority.
Following are the documents that need to be submitted for obtaining the licence:
- Copies of the passport/visa copies of the owner and the partners or shareholders (if any)
- Copy of sponsors passport/Emirates ID
- Local Service Agreement or LSA, in case the company set up is in Mainland
- Copy of Initial Approval Certificate
- Document of initial approval fee payment
- Company registration form from the respective trading zone
- MoA
- Tenancy or Lease agreement (if any)
Online presence & mobile application
For establishing and expanding the market base, it is essential that you have a simple yet modern website with your detailed product listing, easy checkout, and payment.
Also, it is much-needed to have a mobile application for e-commerce shopping, keeping in mind the incessantly high mobile usage and access.
Online payment gateway
You also require setting up a secure online payment gateway for financial transactions. Notably, integrated secured payment options such as card transactions are the most suitable and preferred ones. In addition, a few other options such as cash on delivery, pre-paid card systems can also be implemented.
Import and export requirements
Not to forget that the e-commerce business mainly associate with the import and export of goods, so it becomes imperative to register your business with Dubai customs and ports. However, if your business is in a free zone, then there is no customs duty.
Logistics and Distribution
Another key consideration when starting your e-commerce business is choosing the right warehouse for storing your products from damage or wastage and for their distribution network necessary for timely delivery.
Opening a bank account
After you have acquired your e-commerce license and set up your business, then you require opening up your corporate bank account.
What is ecommerce license Dubai cost?
As for the e-commerce license costs in Dubai, they may vary according to the type of business structure and location. Nonetheless, the initial set up cost for a company in Dubai broadly takes into consideration the following:
- Preliminary approval cost
- Trade name reservation cost
- Office Rent
- MoA typing & translation cost
- MoA attestation cost
- Tenancy contract (Ejari) attestation cost
- Trade license cost
- Sponsorship cost
- PRO services cost
- Immigration card cost
- Market fees which is 2% or 5% of annual office rent
- Any other Government Fees
Get start with your dream e commerce company in Dubai!
Opening an e commerce company in Dubai though a lucrative investment opportunity but is a critical process. And, skipping essential steps has the potential to leave your business vulnerable to legal fines & closure. Thus, it is indeed wise able to consult with an experienced business consultant to guide you rightly.
So, do not delay anymore and reach out today. With years of experience in guiding various companies in establishing their e-commerce business setup in the region. we will help you to get started with your e-commerce company in Dubai in the most hassle-free way!
