• BY VR1 Global

E-Commerce License in Dubai – Comprehensive Guide

Are you wondering what this E-Commerce license in Dubai is all about and how to get one for your business? Then this article is just for you. We have created this comprehensive guide for you to make you understand the need for an E-Commerce license in Dubai, how to legally apply and what activities you can cover under this license, and much more.

Bill gates once said, “ If your business is not on the INTERNET, then your business will be out of Business”.

These are not just words, they are backed by statistics as well. According to E-CommerceDB, UAE is the 28th largest E-Commerce market, with a projected turnover of US$11,782.3 million by 2023, surpassing Belgium. 

Having said that, businesses are scrambling to make their real commerce happen online.

Every business that wants to operate lawfully must obtain a license. An E-Commerce license is one such license provided by the UAE government enabling businesses to conduct online trade securely while adhering to the government’s laws and regulations.

Let us now look more closely at what an E-Commerce License is.

What is an E-commerce license in Dubai?

An E-Commerce license is a legal permit that allows businesses to conduct commercial activities online. 

It’s a requirement for any business that wants to sell goods or services through an online platform, including websites and social media networks. 

In Dubai, the E-Commerce license is issued by the Department of Economic Development (DED) and is mandatory for all businesses that engage in online trading activities.

Steps to get your E-commerce license in Dubai

Step 1 – Decide a Company Structure

Making a choice on the legal structure of the Company is the first step in launching your own E-Commerce business in Dubai.

There are 2 best options for you to choose from:

• Limited Liability Company (LLC) or
• Sole proprietorship

This stage enables you to develop a highly thorough vision for your company’s long-term future.

Step 2 – Choose a location

To set up your E-Commerce Business in Dubai, you have to register your business in either the Mainland or the Freezone. 

For a Mainland company in Dubai, you need a local sponsor who will hold 51% of your company’s shares along with ownership rights.

If you are looking to set up a Freezone company, then no need for a local sponsor and you can have 100% ownership in the Company.

Step 3 – Register your Trade Name

You need to select a name that is distinctive and simple to search for online in order to launch an E-Commerce company in Dubai. 

Additionally, it is crucial to note that the domain name does not resemble any other existing companies because doing so could result in legal issues.

Step 4 – Selecting your business activities:

The Dubai government allows for a wide range of activities to be conducted under an E-Commerce license. Here are some examples for you to choose from:

• Selling goods online: You can sell physical or digital products through your E-Commerce website.
• Online marketplaces: You can set up an online platform to connect buyers and sellers.
• Dropshipping: You can sell products on your website without holding inventory. Instead, you forward the order to a third-party supplier who ships the product directly to the customer.
• Subscription-based services: You can offer services that require recurring payments such as online streaming or software subscriptions.
• Online ticketing: You can sell tickets to events, concerts, and attractions online.
• Online booking: You can offer online booking and reservation services for travel, hotels, and other activities.
• Online advertising: You can offer online advertising services such as social media advertising or pay-per-click advertising.
• Online education and training: You can offer online courses, workshops, and training programs.
• Online freelancing: You can offer freelance services such as graphic design, content writing, or programming.
• Online consulting: You can offer consulting services in various fields such as business, finance, or legal advice.

Choose any activity that resembles your business activity and apply for an E-Commerce license.

Step 5 – Complete your Documentation and submit your KYC.

When you submit an application for a business license, it is important to ensure that you provide a complete form that accurately reflects your company’s information.

This should include details about your business, such as its legal name, address, and contact information. 

The business owner must collaborate with the sponsor to draft the Memorandum of Association (MOA) and submit it to the Department of Economic Development (DED). 

Additionally, it is important to provide information about the shareholders and investors involved in your enterprise, including their names, addresses, and other relevant details.

Along with the completed form, you will also need to provide proof of residency and identification for yourself and any other individuals involved in the company. 

This may include copies of your passport or other government-issued identification, as well as utility bills or other documents that confirm your current address.

These details are necessary to fulfill the requirements of your KYC (Know Your Customer) and UBO (Ultimate Beneficial Ownership) obligations. 

Step 6 – Get your approval:

If you intend to conduct business in the UAE, it is essential to obtain a visa that grants you the right to live and work in the country legally. In order to apply for a visa, you will need to undergo certain medical examinations to ensure that you are fit to reside and work in the country. These medical examinations typically include a fitness test, a blood test, and a chest x-ray.

Along with medicals & visas, you also have to collect all the documents that are approved by DED or the concerned Freezone Authority.

These documents include a company registration certificate, trade name, MOA, or a signed LSA.

Once you have obtained all these documents, you are good to start your E-Commerce Trade in Dubai.

But wait, how will you collect your payment?

So that is our final step.

Step 7 – Set up your business bank account:

Once you have all your documents ready, you have to reach out to the local UAE banks and open a Corporate Bank account under your Business name. This way you will be able to safely collect your funds from your clients and maintain records.

Documents Required for applying for an E-commerce License in Dubai

To apply for an E-commerce license in Dubai, you only need a few documents. They are:

1. Visa or Passport Clear front & back Page Copy
2. Passport size photo Copy with clear background
3. Three Trade Names for the Business
4. NOC (If the applicant is on another visa in UAE)
5. Curriculum Vitae of the applicant demonstrating his/her experience and skills 

How to start a successful E-commerce Business in Dubai?

So far, you have read the legal side of starting an E-commerce business in Dubai, now let us see some technical side of running this business successfully:

1. Create your brand: 

Creating a distinctive brand identity is an important aspect of starting an E-Commerce business. This includes developing a logo, selecting a brand name, and creating a website that represents your brand effectively.

2. Build a website: 

Your E-Commerce website will be the main platform for selling your products online. It’s important to make sure that your website is user-friendly, has clear product descriptions, and is optimized for search engines.

3. Develop an omni-channel approach: 

In addition to your E-Commerce website, you may want to consider selling your products through other channels, such as social media platforms or marketplaces like Amazon. This can help you reach a wider audience and increase sales.

4. Create a marketing strategy: 

Developing a marketing strategy is essential for promoting your E-Commerce business and attracting customers. This may involve using social media, email marketing, paid advertising, or other methods to reach your target audience.

5. Provide excellent customer service: 

Providing excellent customer service is crucial for building a loyal customer base and growing your business. Make sure to respond promptly to customer inquiries, provide accurate product information, and offer easy returns and refunds.

6. Optimize for mobile: 

Many people in Dubai access the internet primarily through mobile devices, so it’s important to make sure that your E-Commerce website is optimized for mobile devices. This may involve using responsive design or developing a mobile app.

Benefits of getting an E-commerce license in Dubai

There are several benefits to obtaining an E-Commerce license in Dubai. These include:

1. Access to a Growing E-Commerce Market

Dubai is a hub for international trade and commerce, and its E-Commerce market is no exception. 

By obtaining an E-Commerce license, businesses can access this growing market and tap into the city’s booming online shopping culture.

2. Legal Protection

As mentioned earlier, obtaining an E-Commerce license provides legal protection for both the business and its customers. 

It ensures that the business is operating within the laws and regulations set by the government, which can help prevent legal issues down the line.

3. Credibility

Having an E-Commerce license also adds credibility to a business. It shows customers that the business is legitimate and operating within the bounds of the law, which can help build trust and increase sales.

4. Flexibility

An E-Commerce license also provides businesses with flexibility in terms of where they operate. 

With an E-Commerce license, businesses can conduct their online sales from anywhere in Dubai, as long as they have access to the internet.

5. Cost-Effective

Obtaining an E-Commerce license in Dubai is relatively cost-effective, with prices ranging from AED 5,000 to AED 10,000, depending on the business’s activities, office space, number of employees, and license type. 

This cost is small compared to the potential benefits that an E-Commerce license can provide.

4 Types of E-commerce license in Dubai:

E-Trader License: 

This license is designed for individuals who want to conduct business activities online without the need for a physical office or shop. 

It allows the license holder to conduct business activities through social media platforms, personal websites, and other online channels. 

The E-Trader License is issued by the Dubai Department of Economic Development (DED) and is valid for one year. 

This license is ideal for small-scale businesses and individuals who want to start an online store or sell products and services online.

Virtual Company License: 

The Virtual Company License is a new type of license that allows entrepreneurs to establish a company in the UAE without the need for a physical presence. 

This license is ideal for individuals and companies that want to conduct business activities from anywhere in the world. 

It provides a range of services, including a business license, residency visa, and bank account opening. 

The Virtual Company License is issued by the Ras Al Khaimah Economic Zone (RAKEZ).

Portal License: 

The Portal License is issued to businesses that operate an online platform or marketplace where multiple sellers can sell their products or services. 

This license is issued by the DED and allows businesses to operate their online marketplace within the UAE. 

The requirements for obtaining a Portal License may vary depending on the scope and nature of the business. 

The cost of obtaining a Portal License may be higher compared to an E-Trader License due to the additional requirements and regulations. 

Freelance License in Dubai: 

The Freelance License in Dubai is designed for individuals who wish to offer their services as freelancers within the UAE.

This license is issued by the Dubai Creative Clusters Authority (DCCA) and allows individuals to provide a wide range of professional services such as writing, design, and consulting. 

The cost of obtaining a Freelance License may vary depending on the nature of the services provided.

FAQ on E-Commerce license in Dubai

Q. Can an E-Commerce license be renewed?

A. Yes, an ecommerce license can be renewed in Dubai. The renewal process must be completed before the expiry date of the license, and it requires the submission of certain documents, such as financial statements and audited accounts.

Q. What is the cost of an E-Commerce license in Dubai

The cost of obtaining an eCommerce license in Dubai depends on whether you obtain it from the mainland or a free zone. The cost of an eCommerce license from a free zone is AED 5,750, whereas an eCommerce license (e-portal) from the mainland costs AED 11,999. The price range of eCommerce licenses in Dubai varies from AED 5,750 to AED 25,000.

Q. How do apply for Ecommerce License in Dubai?

There are two ways to apply for an Ecommerce license in Dubai. One by directly applying through the DED portal and performing all the documentation, attestation, and other procedure manually or By hiring a Business setup consultant.

Business setup consultants, are typically company formation experts, who can help you in reducing the burden of manual documentation, industry or freezone research, and much more other hideous tasks for you. This is the most common and best method for applying for an Ecommerce license in Dubai.

Q. Do I need a license for ecommerce trade in UAE?

A. Yes, to perform any kind of trade in UAE, you need to have a trade license. If your business solely focuses on online mediums for trading, then you need to have a valid e-commerce license in Dubai.

Q. How long does it take to obtain an ecommerce license in Dubai?

A. The process of obtaining an ecommerce license in Dubai can take between 1-2 weeks, depending on the type of license and the completeness of the required documents. The application process can be completed online or in person at the DED.

Q. Can a foreign national obtain an ecommerce license in Dubai?

Yes, foreign nationals can obtain an ecommerce license in Dubai, provided they meet the requirements and have a valid residence visa. However, the license will be issued under the name of a local sponsor, who will own 51% of the business.

How VR1 Global Business setup services can help you get your E-commerce license in Dubai

I hope this article helped you clear all your queries regarding E-Commerce License in Dubai

However, if you still have questions and are not sure how to apply for your Ecommcer License in Dubai, then feel free to reach out to us.

VR1 Global Business setup consultancy is one of the best company formation experts in Dubai, and if you are planning to start your own business here, you can contact our company formation experts who are adept at dealing with all of your queries and concerns without you worrying about the supporting documentation and procedure.

Call or WhatsApp +971508045640 today for a free consultation call with our business setup experts.