Securing a DED E-Commerce License: A step by step guide

Because of the COVID outbreak, many businesses were forced to leave behind their traditional sales strategies and bet on the world of online sales. The United Arab Emirates became a starting point for many new entrepreneurs and a world of possibilities for those entrepreneurs looking to expand their businesses. As a boost measure for all investors, the government of the United Arab Emirates decided to create the DED E-Commerce License.

In this article, you will find information about what a DED E-Commerce License is, how to obtain one, what is the cost of an E-commerce License and how we can help you with the process of obtaining an E-Commerce License.

1. What is a DED E-Commerce License?
2. What are the requirements to obtain an E-Commerce Trade License in Dubai?
3. Steps to get an Ecommerce License in the UAE
4. How much is the cost of an Ecommerce Trade License in Dubai?
5. Types of Ecommerce Licenses
6. E-Commerce Licenses in the UAE’s Mainland
7. Advantages of obtaining an E-Commerce License
8. How can we help you obtain a DED E-Commerce License?

1. What is a DED E-Commerce License?

 

The DED E-Commerce License is also known as the Online Business License; this is due to the support from the government of the United Arab Emirates in offering new business alternatives.

This license allows companies to carry out transactions virtually. It is similar to traditional businesses, with the difference that all business activities are carried out through the Internet. Besides, customers can review the company’s catalogs and place orders online.

Companies can make deliveries of digital goods or deliver goods physically with the help of delivery services, if some of these activities are carried out through the internet, then it can be considered an Online Business.

2. What are the requirements to obtain an Ecommerce Trade License in Dubai?

The Department of Economic Development requires certain documents for regulatory purposes. Depending on the activities of your business, you may need to submit some extra documents.

The documents required by this department are the following:

• Local service agreement
• Memorandum of Association (MoA)
• Copies of the sponsors’ Emirate IDs
• No Objection Certificate (NOC) from the relevant authorities
• Copies of the visas of all the shareholders
• Copies of the passports of all the shareholders

Also, keep the following in mind:

• The No Objection Certificate is valid for six months and is not renewable. You can request the NOC when you go through the application process for your trade name approval.
• The Memorandum of Association is only required for companies established in the Mainland. It is a legal document that describes the name of the company, the name of the shareholders, registered office or physical address, and also the distribution of shares.
• Companies established in the Free Zones do not need a Memorandum of Association

3. Steps to get an Ecommerce License in the UAE

To opt for an Ecommerce License in the UAE, you must follow the following steps:

3.1 Define your legal structure

The options for the Legal Structure of your company will depend on where you decide to establish it. If you decide to form your company in any of the Free Zones, then your options will be limited to the Legal Structure allowed in those Free Zones.

In Dubai Mainland, there is a wide variety of options, such as General Partnership, Public Shareholding, Limited Liability Company, Sole Proprietorship, Private Shareholding Companies, among others.

3.2 Define your business activity

During the registration process of your DED E-Commerce License, you must include the productive activity to which your company is going to dedicate itself. Once you receive the license, you can only engage in that activity.

In other words, if you decide to produce and sell certain products virtually, after registration, you will not be able to sell any other products.

3.3 Register your trade name

To continue the process, you must register the trade name of your E-Commerce company in the general diary of the UAE. After the registration of the trade name, you will have to place the chosen name in two local newspapers.

UAE Nationals will have two days to object to the name, if they do not make any complaint, then the name will be registered as yours.

3.4 Initial approval

In the Department of Economic Development, you must take and fill out a form, there you must add basic information about yourself and your business and also attach the business plan of your company.

Make sure you enter the correct information in relation to the productive activity and the legal structure since any error would mean a considerable delay in the process of acquiring your Ecommerce License in Dubai.

3.5 Search for an office space

By owning an E-Commerce Business you can choose to use virtual office spaces. If you are going to do physical activities, you can also opt for any of the business centers distributed throughout Dubai.

3.6 Submit the documents and pay the fees

The last step of this process is to submit the documents to the Department of Economic Development and pay the necessary fees to acquire your Ecommerce License in the UAE. After you have done this, your license will be issued to you and you can start your business activities.

3.7 Apply for a visa

Once you have applied for your DED E-Commerce License, you can begin the Visa application process for yourself and your employees. The number of Visas you can apply for will be limited by the location and size of your business.

3.8 Open your corporate bank account

To carry out any transaction with your clients, you need to open a corporate bank account. Then, there are many national and international banks in Dubai and the acceptance criteria and application process is different for each of them.

Once you choose the bank, it is likely that you will be asked for the following documents:

• Memorandum of Association (MoA)
• Company Trade License
• Passport Copies of shareholders
• Supplier information
• Source of funds
• Authorized Signatories

4. How much is an Ecommerce Trade License in Dubai?

The cost of forming a company with this license will vary due to different factors. The general cost of a DED E-Commerce License is AED 4,500. However, there are certain additional costs that you should take into account-

Some of the most common costs are the following:

• Immigration card cost
• DED registration fees
• Sponsorship cost for UAE local partner
• Investor visa cost
• Investor’s medical and Emirates ID costs
• Office rent
• Fee for the stamp of the company
• Medical insurance fee of Investor
• Any other government fees
• Additional partner fees, if needed
• Additional partner visa fees, if needed

If you are a foreigner, it is normal if you do not know very well the laws, regulations, and the process of forming a company in Dubai. For this reason, it is advisable to hire a specialized agency to facilitate the formation process of your company and guarantee efficiency.

Also, the cost of forming your company with the assistance of an agency and including the DED E-Commerce License can range from AED 6,000 to AED 15,000.

5. Types of Ecommerce Licenses

In the United Arab Emirates, there are several E-commerce Licenses and in Dubai, they mainly offer three. You can obtain these licenses depending on the productive activity of your company and your nationality.

The three main nationalities are the following:

5.1 E-Trader License

If you want your company to sell products or offer services via the Internet, you can obtain an E-Trader License. This license is monitored by the Department of Economic Development and can only be obtained by UAE and GCC Nationals living in Dubai.

However, you cannot open a store or have a physical office space with this license. To learn how to start a business without office space in Dubai, you can contact us.

5.2 Portal License

This license can only be granted to non-UAE nationals. You can form your online business with a Portal License (which will connect sellers and buyers).

This type of license is perfect for a listing website, which includes services, products, and reservations. If you decide to establish your company in the Mainland region, AED 12,000 is the cost of this license.

5.3 Virtual Company License

This type of license was created by the DED and allows non-residents of the United Arab Emirates and overseas investors to carry out business activities in the region.

However, the Virtual Company License is only applicable to three sectors, designing activities, computer programming (and related activities), and services related to advertising and printing.

6. Ecommerce Licenses in the UAE’s Mainland

 

6.1 Ecommerce License Abu Dhabi (Tajer)

The Abu Dhabi Department of Economic Development (ADDED) issues this license. Also, it allows new and old entrepreneurs to include online trade activities in their existing licenses. Besides, you can get a new license to run the business through social networks and websites.

This license includes UAE residents and GCC Nationals under the following conditions:

• One-person company for GCC nationals and Emiratis
• Establishments for GCC nationals and Emiratis
• Limited Liability Company for residents in partnerships with Emiratis

6.2 Virtual Merchant License from Ras Al Khaimah

The authorities created this license to promote businesses managed through social networks, smartphone applications and also websites. However, this license is only available to UAE citizens living in Ras Al Khaimah.

Some activities that you can carry out with this license are the following:

• Real estate and commercial brokerage
• Retail business
• Technology and computers

6.3 Etimad Ecommerce License Sharjah

The Sharjah Department of Economic Development (SEDD) offers this type of license for  E-Commerce businesses in Sharjah that are carried out through social networks and from home. This license is available to anyone over the age of 18 and a resident of the Emirate of Sharjah.

6.4 Dubai Commer City (DCC)

This area dedicates to promote E-Commerce Business in the Middle East and North Africa (MENA). 

Also, this license offers the following benefits:

• Pre and post-setup support
• Smart and centralized customer relationship
• Access to on-site ecosystem service
• Business support, for example, talent acquisition, networking events, and marketing management.

Some incentives also include the following:

• No corporate tax
• 100% repatriation of profits
• 100% ownership

7. Advantages of obtaining an Ecommerce License

Obtaining the Ecommerce License Dubai has helped many companies sustain themselves during the pandemic. Although there are some benefits of conducting transactions virtually such as a wider reach, decreased cost, and a customer base, there are also advantages directly related to this license granted by the government of the United Arab Emirates.

Besides, some of the advantages are the following:

• You can maintain 100% ownership of your business, in other words, by having an E-Commerce License in Dubai you will not need a local sponsor to share ownership of your business.
• You can register your company with the Dubai Chamber of Commerce, which will make it easier for you to import and export products.
• Basically, by having an E-commerce License, you can easily open an account in the bank of your choice.
• You can promote your services and products through different social platforms and ads.
• Lastly, you can register your company’s trade name with the help of an E-Commerce License.

8. How can we help you obtain a DED E-Commerce License?

If you are an entrepreneur who wants to start a new chapter in your life by forming an E-Commerce company in the United Arab Emirates and you do not know what steps to follow, do not hesitate to contact us. We are your trusted agency that will accompany you in every decision you make to ensure that your company prospers and works under the laws of the UAE.

Here, at Connect Zone, we will take care of the entire application process for an E-Commerce License in the UAE, from collecting documents to opening an account at the bank of your choice. Also, if you need it, we will be your local agent in Dubai to help you find the ideal space for your office.

 

Are you interested in learning more about the DED E-Commerce License? You can write to the following email contact@connectzone.ae where one of our advisors will help you gladly.