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E-commerce Business License in Dubai, UAE – Essential Steps to Follow
E-commerce has made life easier for us as it is not time-consuming, and with access to the internet, you can almost shop for anything online from anywhere and anytime. Few simple clicks and you can make a purchase sitting in the comfort of your home or office. Thus, e-commerce can help your company reach out to a broader range of audiences from everywhere. In UAE, the market is flourishing, and you have immense scope for e-commerce business. But suppose you want to establish an e-commerce business in any of the emirates of UAE, including Dubai. In that case, you will have to go through a set of business setup processes, i.e., from company registration, company formation, business license to office space for rent.
E-Commerce License in Dubai, UAE
If you have made plans to start an e-commerce company in Dubai, you need not worry. It is easy and straightforward, but you will need to follow the rules and regulations. The authorities in Dubai won’t allow you to incorporate a company randomly and start selling products and services. To begin an online business in Dubai, you will first need to apply for an e-commerce business license. The Department of Economic Development (DED) in Dubai issues the license. If you do not hold a license, your business is considered illegal.
The Process to Obtain an E-Commerce License in Dubai
Following are the steps to obtain an e-commerce license in Dubai:
- Choose the Legal Structure
Choosing the legal structure of your business comes as the first step in obtaining an e-commerce license in Dubai. It means whether you want an LLC (Limited Liability Company), a branch of a parent company, a representative office, or just a one-person company, etc. In Dubai and other emirates, LLC formation and Branch offices are most common as they come with a set of special advantages.
- Choose the Location for your License
This is not the place where you will set up your office or shop, but from where you will get your license. The two main zones for trading in Dubai are – Free Zones and Mainland. You get 100% ownership of your company in a free zone, while in the Mainland, you will need a local sponsor or service agent, who will have a minimum of 51% shareholding in the company and the remaining will be yours’. Likewise, both the trade zones possess their share of benefits and drawbacks. So, before you decide where to set up your business, consider all the factors.
- Register a Trade Name
Your business is new in the industry and yet to establish itself in the market. Therefore, ensure you choose a name that people can recall easily. Also, always try to keep your trade name and domain name the same so that you are easily found online when people search for you. Finally, be cautious that your domain name does not replicate any other existing company as it may create legal conflicts.
- Apply for an Ecommerce License
The next step is to apply for an e-commerce license. The Department of Economic Development issues the license for the Mainland; therefore, you will have to approach them for the process. If you want to set up your business in a free zone, then identify and approach the relevant free zone authorities for license issuance. The nature of your online business decides what will be the type of your license.
- Apply for Initial Approval Certificate
An Initial Approval Certificate is a No Objection Certificate (NOC) from the local authority to start your business in Dubai. It has 6 months validity and cannot be renewed. You can apply for it at the time of submitting your trade name approval application.
- Draft an MOA and Local Service Agent Agreement
Next, you will have to draft a Memorandum of Association (MOA) with your service agent or sponsor and submit it to the Department of Economic Development, Dubai. This step is for those planning to opt for the Mainland as their office location. The ownership percentage among all partners of your company and all other special arrangements must be specified in the memorandum. Again, get this drafted by a legal firm who are experts in this. Free zone companies can skip this step.
- Set Up a Physical Office in Dubai
Now is the time to set up a physical office space in Dubai. It is mandatory in Dubai for companies to possess an office space to recognize it as a legal entity.
- Obtain Your Ecommerce License
After all the above steps are accomplished, you will get your e-commerce business license in Dubai within 1-7 days.
- Register for Import/Export Requirements
Get your business registered with one of the ports and customs authorities in Dubai. It will help you get an importer’s code. 5% customs duty is imposed on imported goods in UAE. However, the free zone companies do not have to pay import duty as they can sell their product/services only within the free zones areas.
- Open a Corporate Bank Account
Finally, after you have applied for an e-commerce trade license and set up your business, you can open your corporate bank account. Again, the application process is easy and fast, so you just have to find out which bank is most suitable for you.
