Starting an online business in the UAE is a smart decision, as you can get good profits and expand quickly. With an ecommerce license Dubai you can run your freelance business and take advantage of all the benefits this thriving location can give. Create your leading online platform for selling as there is room for new investors in the UAE.
In this article, you are going to learn all about how to obtain your ecommerce license. Moreover, you will understand the steps you have to go through as well as the ecommerce license UAE cost.
What is E-Commerce?
E-commerce is a sector that is growing exponentially around the world. With the use of the Internet and social media, businesses are starting to reach a wider audience and thus increase their earnings.
Simply put, an e-commerce business is one that sells its goods or offers its services online. It could either be a small business or a large corporation, the only requirement is to have an online presence.
One of the strengths of Dubai is its e-commerce growth, as it is expected that more and more businesses to join. In this regard, to run this type of business you need to apply for an ecommerce license Dubai.
With this document, you can do any of the following:
- Sell your products through your website: With your ecommerce license Dubai you can build your website and upload your catalog. This requires you to hire a developer that helps you set up your platform and payment gateways. Also, you can offer shipping options.
- Sell your products through a marketplace: if you do not want to develop a website, you can use any of the marketplaces available in Dubai for selling. Thus, you can get access to more consumers. However, keep in mind that this involves having to pay a commission fee.
- Use your social media to sell your products: the good news is that you do not necessarily need a website or a marketplace to sell. You can simply use your social media to post your products.
Before starting your business, it is advisable to learn more about the legal landscape for startups and freelancers in the UAE. This will help you understand how to maintain a compliant business, and thus avoid having to face troubles with the authorities.
Steps to get your e-commerce license in Dubai, UAE
The E-commerce sector is among the top industries for freelancers in the UAE. This is because this place is always welcoming new investors and people with new ideas. Therefore, you can obtain your ecommerce license Dubai quickly as it is not a complicated process.
This document certifies that you are allowed to conduct ecommerce activities, as it is a legal permit. Nonetheless, keep in mind that with this ecommerce license UAE, you are only allowed to trade online.
Therefore, you can have a place where you keep your inventory, but you cannot conduct sales in a physical store. In case you would like to carry out your sales in a retail store, then you would have to apply for a different type of license.
In this case, you would need a trade license, and you should know the ecommerce license Dubai cost is different from this other type of license.
Once you have decided that the ecommerce license in UAE is exactly what you need, you have to go through a series of steps to obtain it. In some cases, it is best to count on a service provider as it can make the process easier.
Whether you decide to hire a third party or do it yourself, here are the basic steps to apply for an ecommerce license Dubai:
- Choose your business activity
- Determine the legal structure
- Choose a trade name
- Choose between a Free Zone or a Mainland Company
- Prepare the documentation for submission
- Get the required approvals
- Collect your license
It is worth noting that you may face penalties of up to AED 50,000 if you start an online business without a license. So, it is best to avoid trouble by doing the steps for having a legally compliant business in the UAE.
Determine Business Activity and Legal Structure
The first step to earning money online as a freelancer is to define the activity and legal structure of your business. This refers to the type of company you are going to incorporate in the UAE. Keep in mind that the ecommerce license Dubai cost will vary based on the legal entity you choose to form.
The legal structures available are the following:
- Limited Liability Company (LLC)
- Sole proprietorship
Keep in mind that if you are a foreign investor, you may face some limitations with the type of company you have. For example, you may need an Emirati partner in some cases, depending on the legal structure or the jurisdiction.
Once you have chosen the type of company you want to have with your ecommerce license Dubai, the next step is to decide on the business activity. Thus, you have to check the list of permitted activities and choose the one related to your type of business.
Make sure to select the one that suits the nature of your operations. Otherwise, you may face troubles. For example, you may sell your products, but you cannot offer professional services if you have not included this activity in your ecommerce license.
Also, you have to choose the activities that are related to what you are going to do with your business. You cannot choose textile trading and then start selling food if you have not included it.
Choose a Free Zone or Mainland Setup
Another crucial aspect when it comes to the ecommerce license UAE is deciding the jurisdiction where you want to operate. In the UAE, you can choose between a Free Zone or a Mainland setup. Each one has its advantages, and you have to consider it before continuing.
In the case of a Free Zone business, it offers the following benefits:
- 100% ownership of your company. You do not need an Emirati partner
- The formation process is quick and easy
- Repatriation of capital and profits
- Exemption from some taxes
- No currency restrictions
- Affordable ecommerce license Dubai cost
On the other hand, the Mainland setup offers the following advantages:
- Possibility to trade within the UAE local market
- Fewer restrictions on business activities
- Wider market and the possibility to reach a vast audience
- No corporate taxes
However, it is important to consider also the drawbacks of each setup. For example, with a Free Zone Company, you cannot trade directly within the UAE market. And with a Mainland Company, you need a local sponsor to establish your company.
In this case, there are more than 50 Free Zones in the UAE where you can start your business. You have to decide which one caters best to your business. Keep in mind that some of them are niche-specific, so you have to consider which one will be the best suit.
Submit Application and Documentation
The next step will vary depending on the jurisdiction where you decide to apply for your ecommerce license in UAE. This is because there is a designated authority to process the documentation for each case.
If you decide to apply for an ecommerce license Dubai on the Mainland, you have to submit your documentation to the DED (Department of Economic Development) in the Emirate where you want to incorporate.
In addition, you may have to apply for an NOC at the Telecommunications and Digital Government Regulatory Authority. This is because you need permission to carry out eTrade.
On the other hand, if you are going to apply at a Free Zone, you have to go to the strategic location of the designated Authority to submit the documents. Some of the Free Zones where you can apply are:
- Dubai South
- Dubai Multi Commodities Centre (DMCC)
- DWTC (Dubai World Trade Centre)
You can also establish your ecommerce business in any of the Free Zones of the other Emirates, like Sharjah or Abu Dhabi.
On the other hand, the documentation will vary depending on the type of company, as if there are more shareholders you need their documents too. Prepare the following documents to submit them:
- Copy of your passport
- Passport-style photograph
- Duly filled application form
- Emirates ID
- Copy of UAE Visa
- MOA & AOA
After you have submitted your application and documentation, you are a step closer to starting your business. Keep in mind that if you want to do it right, you should follow the 10 easy steps to start freelancing in Dubai.
Obtain Necessary Approvals and Licenses
Besides applying for your ecommerce license Dubai, you also have to obtain some approvals depending on the jurisdiction where you operate. This is to ensure you are running a business that is fully compliant with local rules.
You should decide on a company’s trade name and apply for its approval at the DED if you are incorporating your business in Dubai. In this case, you have to adhere to the guidelines regarding your business name.
After you have submitted your application form, you will obtain an Initial approval. But this is as long as you meet the requirements. You also need to obtain approval from the Ministry of Economy to allow you to sell goods online.
In addition, depending on your chosen jurisdiction you may have to rent an office space. Although this is not the case in some Free Zones, you still have to check it to determine if it is a requirement or not.
Once you have done all the registration you have to consider the ecommerce license Dubai cost, as you have to pay the fees for incorporation and issuance.
Keep in mind that the ecommerce license UAE cost will vary based on the following:
- Business activities chosen
- Location and jurisdiction
- Company Type
When it comes to the processing time, it may take from a few days up to a few weeks. In some Free Zones, it can be as fast as 2-3 days. But after you get your license, you can start operating right away.
Once you have finished with the approvals and obtained your license, do not forget to do some crucial steps. For example, you must open your bank account in Dubai so you can manage your business finances.
Obtain a Freelance Visa for an E-commerce License in Dubai, UAE
Obtaining a freelance visa can be costly. For this reason, you need to know how to apply for the cheapest freelance visa so you do not exceed your budget.
Applying for a visa is a crucial step when it comes to running your business with your ecommerce license Dubai. With a UAE Visa, you can stay in Dubai and enjoy all the benefits this promising city has to offer. You could also apply for a visa for your employees if necessary.
In this case, you also have to gather the required documentation. Have everything prepared so you can carry out this process quickly. Here are the documents you will need:
- Passport copy
- Bank reference letter
- Academic certificates (if necessary)
- Personal references
After submitting the paperwork, you have to pay the fees for the issuance of your visa. Once you get your visa, you will be able to live in the UAE for the established duration of your document.
This way, you can run your online business directly from Dubai and start expanding and growing. With the UAE Visa, you have endless possibilities to grow both personally and with your business.
Lastly, keep in mind that your visa has an expiration date, so you have to know how to do the freelance visa renewal. This way, you can continue freelancing in the UAE for another period.
Having the right support when it comes to obtaining a freelance visa in the UAE makes the difference. If you want to learn more about how to start your freelancing business with an ecommerce license Dubai, feel free to contact us.