How to Get E-commerce License in Dubai

E-Commerce license in Dubai

One buzzword that has swept the business market in the tough times of Covid-19 is ‘being online’ or e-commerce. Most of the existing organizations are trying to shift their operations to online methods. The start-ups are initiating developing an online presence to grab as much benefit as possible in the current challenging times. However, if you intend to do an online business in Dubai, you have to get an e-commerce license in Dubai.

e-commerce license in Dubai

E-commerce operations are the new lifestyle of businesses, where individuals, as well as businesses, just click on their smartphones or laptops to purchase and order products for personal or business use. Therefore, the popularity of e-commerce platforms is still rising, even though economies and businesses are suffering major setbacks.

Similar to the growth of e-commerce businesses across the globe, Dubai is also witnessing a surge because of its immense popularity as a lucrative location. Being at a strategic central location, encouraging business landscape, zero taxes, and various other factors, Dubai is a significantly attractive destination for the global business world. Moreover, with a penetration rate of 4.2% in e-commerce, UAE is considered as the most advanced market in the MENA region. As per Visa’s white paper on ‘The UAE eCommerce Landscape’ of June 2019.

Though setting up an e-commerce business in Dubai is easy, there are several laws and processes to comply with. Further, the foremost requirement is to have an e-commerce license from the Department of Economic Development (DED) in Dubai. This article indeed talks about the licensing procedure and other requirements to fulfill to conduct e-commerce business in Dubai.


Need for E-commerce License:

A license is needed in Dubai to conduct online operations in Dubai to sell your goods as well as services legally to customers. However, if the e-commerce license is not obtained, it may lead to penalties, as well a the business may be closed forever. Moreover, a licensed business ensures the possibility of opening a bank account, arranging payment gateways, obtaining relevant insurance, and building customer confidence. The licensing process will also depend on your decision regarding if you intend to produce and sell your products, create a platform so that sellers can sell their products, or create a platform to provide third-party services to buyers.

e-commerce license in Dubai

E-commerce License Setup Type – Free Zone or Mainland

How to Get E-commerce License in Dubai

One has two options to set up an online business in Dubai – offshore company formation in Dubai or Freezone company setup in Dubai. However, if you choose the mainland, you will be required to appoint a local sponsor who will have a minimum of 51% ownership. It also allows having direct operations with the local market along with the option to take government contracts. Furthermore, there are lesser constraints on office premises and visa eligibility in mainland companies.

In case of the operations in any of the free zones, you enjoy the benefits of zero taxes, 100% ownership, no local sponsor requirement, no currency constraints,

as well as tax exemption from customs duty. However, you cannot have direct operations with the local market.


Many legal structures are possible in both the mainland company formation in Dubai and the free zones. Depending on the advantages of each, your objectives and vision, and your business industry. You can choose any legal structure such as LLC or foreign branch or any other.


Selection of the Company Name:

Before applying for the e-commerce license, it is essential to decide on the company name. Moreover, there is a set of regulations for naming conventions that businesses must follow. Further, the name must be available for registration. Such a name should exclude any religious or offensive connotations. It is better to choose a name that people can remember easily. Since it will not have a physical presence, people must not find any difficulty in searching it online.


Initial Approval Certificate:

For an e-commerce license, a no-objection certificate is required from the relevant authority. It is called an Initial Approval Certificate as well as is valid for six months. It is certainly non-renewable. It is recommended to apply for it at the same time as the application for the company name.


MoA and Local Service Agreement:

In case of selection of mainland Dubai as the official setup, it is essential to submit a Memorandum of Association (MoA) and Local Service Agreement (LSA) agreed upon and signed with a local sponsor. The LSA will mention the local sponsor’s details. The agreement details between them, while the MoA will mention the ownership stake and special provisions of all the partners. For a free zone company, there is no requirement.


E-commerce License Application:

Depending on the location as well as the legal structure was chosen, the company can be set up. Such setup can be with the submission of relevant documents and the stated application form. In the case of a free zone, the application is submitted directly to the authority of the free zone. In particular, for a mainland company, the documents are submitted to the municipality or DED.

The following key documents, along with the application form for an e-commerce license, are:

  • Passport or visa copies of the shareholders
  • Local service agreement
  • Draft of the Memorandum of Association
  • Passport copy or Emirates ID of local sponsor
  • Lastly, a No-objection certificate from the relevant authorities

Generally, the e-commerce license is approved as well as dispatched to the applicant within one to seven business days.


Visa Application:

Once the e-commerce license application process is done, the next step is the UAE residence visa for you and your employees. Based on the business setup that you choose and the location, the number of visas you can get for your family or dependents and employees is decided.


Corporate Bank Account for Your E-commerce Business:

Once you receive the e-commerce license, you can open a corporate bank account with a bank after analyzing the multiple options and the features that a bank can provide, depending on your requirements. In addition to this, you are in requirement to set up the payment gateway for receiving online payments, including credit/debit cards, smart cards, gift coupons, digital money e-cash, and other options.


Import-export Registrations for Your Online Business:

To get an importer’s code, businesses need to register with the customs authority and one of the ports to facilitate the export and import of goods. Get all business setup services in Dubai, UAE

All of the information mentioned above is a good guide for you to read and refer to before thinking of applying for an e-commerce license in Dubai. It is a simple, easy, and affordable process. However, to eliminate the possibility of errors due to which the chances of rejection are higher, it is good to hire a specialist, professional firm dealing in company formation and licensing process.


FAQs


1. Is the e-trade license in Dubai the same as the e-commerce license? 

The E-trader license allows only the Emirati and GCC nationals above 18 years to trade products and services online. Under this license, the UAE nationals cannot open a physical store and cannot issue visas. Herein, individuals conduct online businesses through social media applications such as WhatsApp, Instagram, Facebook, etc. On the other hand, the e-commerce license allows any individual from any country to set up an e-commerce business in Dubai, provided the required relevant conditions are satisfied.  

2. Is there a separate license for e-commerce businesses in Dubai? 

In the case of mainland Dubai, there is no specific e-commerce license. A company with a general trading license can conduct all types of trading via any of the methods – online or physically. A company with a trade license in one activity cannot do an online e-commerce business for other activities.  

In the case of free zones, e-commerce activity means sales through an electronic medium since they are restricted to operate only in the free zone. To sell its products online, a company must obtain a license from DED. 

3. What are the offerings introduced by the DED for e-commerce operations? 

– Garments, textiles, and gifts 
– Household, professional, and personal goods 
– Equipment 
– Jewellery and precious stones 
– Publications and media materials 
– Sports and recreational events tickets 
– Vehicles and transport means 



Client Testimonials


Start typing to search

Shopping Cart
Translate »