The advancement of technology, the massive use of smartphones, and the speed of the internet have allowed the creation of an entire virtual industry that has not stopped growing exponentially in recent years. For this reason, it is not surprising that the E-Commerce sector is a point of interest for many investors in the United Arab Emirates, and that every day new entrepreneurs decide to acquire an Ecommerce License Dubai.
In this article, you will find information about what an this license is, what steps you must follow to obtain one, what is the cost of it, what are the documents necessary to acquire this type of license, and also how we can help you get one.
- What is a Ecommerce License Dubai?
- Types of licenses
- Procedure to get an E-Trade License in Dubai
- How much is the Ecommerce License Dubai?
- What are the necessary documents to obtain an Ecommerce License Dubai?
- Advantages of acquiring an Ecommerce License Dubai
- How can Connect Zone help you obtain your Ecommerce License Dubai?
1. What is a Dubai Ecommerce License?
Created in 2017, the Ecommerce License Dubai is an official document issued by the Department of Economic Development. This license is aimed at those entrepreneurs who do business from home and through online platforms, thus facilitating the offer of their products and services in a market where the possibilities are endless.
Having an online business means reaching a wide range of the public. For example, if you decide to create a clothing store in the local market of your country, the public target is limited. However, having a Dubai E-Commerce License allows you to overcome any territorial barrier and reach customers anywhere in the world.
In 2018 alone, the E-Commerce Sector in the United Arab Emirates was worth AED 36.7 billion.
2. Types of licenses
In the United Arab Emirates, there are three main types of Ecommerce Licenses. Each of these licenses is adjusted to the productive activities of your company and your nationality. These three types are the following:
2.1 Portal License
Dubai issues this license and only non-UAE Nationals can use it. This license will serve as a communication bridge between sellers and buyers, which facilitates the process of forming your company.
Also, this license is ideal for a listing website, where you can describe in detail your products, services, and reservations. If you decide to start your company and acquire this license, you must take into consideration that this license has a cost of AED 12,000.
2.2 Virtual Company License
The Ministry of Economy created the Virtual Company License, and allows overseas investors and non-residents of the United Arab Emirates to carry out agreements, transactions, and any commercial activity in the territory.
However, if you plan to acquire this type of license you should know that it is only applicable to the following sectors:
- Computer programming (and related activities)
- Services related to printing and advertising
- Design activities
2.3 E-Trade License
If your goal is to trade products over the internet, then the E-Trader License is perfect for you. The DED created his type of license and only the GCC and UAE Nationals can acquire it
Note that investors who decide to opt for the E-Trader License must take into consideration that this license does not allow the opening of physical offices in the territory.
3. Procedure to get an E-Trade License in Dubai
Deciding to form a company in the UAE is the easy part. However, you cannot forget about the laws and regulations that you must comply with.
The authorities of the United Arab Emirates do not allow any random individual to start an E-Commerce Business and sell any product. If you want to start a company in Dubai you must apply for an E-Commerce License at the Department of Economic Development. The authorities will not consider your company legal until you have the license in your hands.
The application process for an Ecommerce License Dubai is the following:
3.1 Select legal structure for your business
The first step to follow to obtain this license is to choose the legal structure of your company.
Among the legal structures to choose from are the following:
- One-person Company
- Limited Liability Company (LLC)
- Representative office
- Branch of a parent Company
The most popular options in Dubai are, without a doubt, the formation of Limited Liability Companies and Branch Offices, due to the multiple advantages that characterize these legal structures.
3.2 Select a Location
In this case, the location does not necessarily refer to where your company is based, but where you want to obtain the license from. Dubai is made up of two main zones: The Free Zones and the Mainland.
Getting an Ecommerce License in a Dubai Free Zone allows you to maintain 100% ownership. However, to form a company in Dubai Mainland you will need the services of a local agent, whose ownership of the company must be at least 51%, the rest will be your share.
Both zones offer unique advantages and disadvantages. Therefore, your job will be to decide which zone best suits the needs and objectives of your company.
3.3 Register a Trade Name
Since your business will not have a physical address, it is recommended that you choose a name that your customers will easily remember. Your trade name can be the same as the domain name, this way your customers can find your company more easily on the internet.
When you register the name, make sure you respect the different regulations that the UAE has regarding company names. For example:
- It cannot have foul language
- Avoid any relationship with any religious deity
- It cannot be previously registered by another company
- If you name the company after yourself, remember that the name should not be abbreviated.
3.4 Apply for a license
After deciding the location, it is time to apply for your Ecommerce License. If you want to establish your company in Dubai Mainland, you will have to pay around AED 10,000 for the registration of the Trade Name, the initial approval, and also the delivery of the license.
In the event that you want to get an Ecommerce License in a Dubai Free Zone, you must collect the license from one of the relevant authorities of the chosen Free Zone.
Note that this type of license issued will depend on the nature of your business.
3.5 Initial Approval Certificate
The Initial Approval Certificate is a No Objection Certificate from the authority that allows companies to legally operate in Dubai. You can apply for approval at the same time as submitting the trade name approval. This approval is valid for six months and is not renewable.
3.6 Memorandum of Association (MoA) and Local Agent Agreement
You must complete the MoA with your Local Agent and submit it to the DED. Any legal firm in the United Arab Emirates can type out the MoA, which must specify the ownership percentage of all shareholders and the specific arrangements between them.
Note that this step is exclusive for companies established in Dubai Mainland. Therefore, companies established in a Free Zone can skip this step.
3.7 Physical Office
The next step to follow is the setup of a physical office. The Dubai authorities have defined it as a mandatory requirement for companies established there to have a physical office. Otherwise, your company cannot be considered a legal entity.
3.8 Final Approval
Once you have completed the steps above, you should have your license within 1-7 business days, depending on the relevant authorities.
3.9 Export/Import Requirements
To be able to operate in the country, you need to register with one of the ports and customs authorities, so you can receive an importer’s code. The UAE imposes a 5% customs duty on imported products to companies established in Dubai Mainland.
Companies established in a Free Zone do not have import duty, since they can only trade their services and products with other Free Zones.
3.10 Open a Corporate Bank Account
Once you have completed the application process for your Ecommerce License and established your company, you will be able to open a corporate bank account. Opening an account is an extremely easy process, so your only concern will be choosing which bank best suits your needs.
4. How much is the Ecommerce License Dubai?
The Ecommerce License Dubai cost will depend on various factors. For example:
- The size of your company
- The number of Visas you need
- The economic jurisdiction in which your company is established
- And the size of your office.
However, an estimated cost can range from AED 15,000 to AED 50,000 depending on the requirements. Some requirements are the following:
- Investor Visa Cost
- Office Rent
- Department of Economic Development Registration Fees
- Sponsorship fee for the UAE Local Agent
- Government Fees
- Foreign Name Charges (if any)
- Immigration Card Cost
- Medical Insurance fee of the owner
- Fee for the stamp of the company
- Additional partner Visa fees (if needed)
- Emirates ID fees
5. What are the necessary documents to obtain an Ecommerce License Dubai?
Part of the regulation process of the Department of Economic Development is the request for certain documents. These documents are mandatory if you want your company to be recognized as a legal entity and able to operate in the territory of the United Arab Emirates.
Depending on the productive activity of your company, you may need to submit some extra documents.
The requirements to acquire an Ecommerce License are the following:
- Memorandum of Association (MoA)
- No Objection Certificate (NOC) from the corresponding authorities
- Copies of the local agent Emirate ID
- Local Agent Agreement
- Copies of the Visas of every partner
- Copies of the passport of every partner
6. Advantages of acquiring an Ecommerce License Dubai
The E-Commerce Businesses has created a large number of jobs, not only in the United Arab Emirates but in the world. Although there are some advantages of trading products and services through digital platforms, for example, the low production costs and a larger customer base. There are other benefits directly related to obtaining the Ecommerce License Dubai.
Some of the benefits are as follows:
6.1 No Currency Restrictions
Due to the international nature of Ecommerce Licenses, the local government offers unique flexibility when trading multi-currencies. You have the possibility to carry out transactions in any legal foreign currency.
6.2 100% Repatriation
One of the greatest advantages of the Ecommerce License is that you can repatriate the profits generated and the investments made.
6.3 Free Ground of Operation
The government of the United Arab Emirates has been in charge of facilitating as much as possible the process of creating an E-Commerce Business in its territory. For this reason, the Free Zone, the Offshore, and the Mainland were places created to engage in different types of business. Each of these zones has its own regulations and procedures to follow.
6.4 100% Ownership
By having an E-Commerce License in a Dubai Free Zone, you can maintain 100% ownership of your company, without the need to hire a local agent.
7. How can Connect Zone help you obtain your Ecommerce License Dubai?
E-Commerce Businesses are, in short, one of the most attractive sectors for those entrepreneurs who want to invest time and effort in the United Arab Emirates. However, to carry out the formation process of this type of business, the acquisition of a license is of the utmost importance, and Connect Zone is the ideal partner to carry out this process for you.
With more than twenty years of experience, our firm is the trusted business setup agency of many successful companies. Our professionals in the area have the objective of accompanying you, guiding you, and offering you a quality service for the constant growth of your business. In Connect Zone, you can find services such as visa application, accounting, and clearing of documents, and we can even help you open an account in the bank of your choice.
Are you interested in knowing more about us and how to obtain this license? You can contact us at the following number +97143316688 or you can write to the following email email@example.com where one of our representatives will gladly assist you.
Lastly, if you want to apply for a position in our agency, you can create an account and submit your CV at thetalentpoint.com, or you can contact us at the following email firstname.lastname@example.org. You can rest assured, your data is safe with us, as we will not share it or store.