How to Set up an E-commerce Business in Dubai Free Zone?

sakinaburhan June 24, 2022

0 833 5 minutes read

Dubai, in the United Arab Emirates, is one of the best and ideal places to start an e-commerce business. The digital advancements, tech-savvy population, and constructive government policies make it suitable for conducting business online. But, to engage in such digital activity in Dubai, one must mandatorily obtain an E-commerce license Dubai Free zone. This license helps companies to expand extensively to the UAE local market via online mediums and digital platforms. In addition, the process and cost to obtain an E-commerce license Free zone are straightforward and vary depending on the jurisdiction you choose for your business setup.

The UAE has the largest B2C eCommerce market with more than 60% of the online buyers based in Dubai. Moreover, it also stands top as an e-commerce leader in the Gulf Cooperation Council (GCC). This stands out for several reasons such as –

High digital penetration
Consumer trust in online shopping and e-payments
High standard of logistics infrastructure
Immense government support for entrepreneurial initiatives

Benefits of acquiring an E-commerce license Free Zone

Opportunity to establish a cost-efficient business
Liberty to operate without a physical office space
Customized warehouse facilities
Flexible working space and ground of operation
Relief from import/export duties and other taxes
Freedom to make multiple currency transactions
Less VAT on the transactions made within UAE
Wide range of options for expansion of business
Global technology platform
Choice of hiring global employees
A stress-free company establishment procedure
Easy availability of logistics support and distribution agents for door-to-door delivery
Availability of in-house Customs checks in some locations
Faster clearance of goods into and out of the region

Basic components of an E-commerce company

What to sell

Several international giants are currently operating in the UAE. Hence, as a budding investor, you need to figure out what you want to sell through online channels. Whether you wish to promote your trading activities digitally or you want to become a reseller such as Amazon, eBay, etc. for instance, if you become a reseller, then your website will act as a platform for vendors to connect with consumers worldwide. On the other hand, if you already own a trading company, you can expand its marketplace by selling the products online. Thus, for all the above purposes, you need to determine what products and services you want to put up on your digital platform.

Jurisdiction requirements

As per UAE law, only UAE nationals can conduct commercial activities in the UAE mainland. Therefore, free zones are the ultimate choice for foreign investors and entrepreneurs to set up their commercial companies in the UAE. However, while setting up an e-commerce business in the Dubai free zone, the owner needs to partner with local traders to perform logistical activities, such as clearing imported goods and delivery services.

Creating business platform

The main medium for performing e-trading activities is a digital platform. For example, social media accounts, company websites, etc. All you need to do is create a website, and display your company products with the details. further, the customer will navigate through the website and make the purchases as and when required. Also, make sure that your website is effective and has all the required elements such as bestsellers and offers, product images and categorization, customer registration, shipping details, contact information, ratings & reviews, etc.

Trading via registered social media accounts

Regulating social media platforms, especially commercials can be pretty complicated due to some legal reasons. Therefore, traders must ensure to register their accounts with the National Media Council to avoid any unwanted penalties or fines.

Secure payment gateway

Since e-commerce is completely digital, it is obvious that the majority of transactions will be digital as well. Therefore, the business owner or trader must ensure to have a foolproof solution for all the monetary transactions to avoid any scams or fraudulent activities. Hence, the owner must tie up with a reliable banking partner to establish a secure payment gateway that also offers more feasible options to clients. You can also look for banks that offer customized packages for e-commerce businesses.

Warehouse or office space

Since you are selling goods online, you need to have a proper storage and warehousing facility. Dubai free zone offers personal warehouses on sale as well as on lease where you can store and sort your goods accordingly.

If you are operating your e-commerce business along with many other businesses, you need to have a physical office address for registration and license-related procedures.

Logistics

A proper logistic system ensures smooth operations of an e-commerce company, from the import of raw materials to the timely delivery of goods. In Dubai, you can either seek third-party logistics support or build one at your own expense.

Customer care services

Post-sale service is a vital aspect when you start an e-commerce company in Dubai, UAE. Therefore, you need to hire a team of professionals who will handle the queries and feedback from customers. You can either opt for outsourcing or manage an in-house team for this purpose.

Marketing

Once you procure your E-commerce license Dubai Free zone and are set to begin operations, you need to create an effective marketing strategy to reach out to potential clients and target customers.

Steps to start an E-commerce business in Dubai Free Zone

Determine the market potential
Find a suitable location
Register a trading name for the company
Apply for an E-commerce license Dubai Free zone
Develop a website
Establish a payment gateway
Customer and logistic support
Marketing of products and services

Requirements for the application for an E-commerce license Dubai Free zone

The applicant or the business owner must be aged 21 or above.
The business owner must have a valid Emirates ID and a registered company name.
The license fee has to be paid within 24 hours of submission of the registration form.
Remember to complete all the steps of the business registration process with the DED.
The license has to be renewed accordingly but within one month of the expiry date.

Documents required for an E-commerce license Dubai Free zone

You must present the following documents in order to register for an e-commerce license Free Zone –

Application form for business registration
Initial Approval Certificate
Trade name reservation certificate/approval
Well-drafted and signed Memorandum of Association (MOA)
Details of the social media accounts and websites where you will conduct your e-commerce activities
License fee invoice
Office sustainability contract for the registration of business
Passport/Visa copies of the shareholders
Emirates ID
No Objection Certificate from relevant authorities, if any

Summing up

Since the covid-19 pandemic coerced people to stay at home and buy their essentials through online mediums, the e-commerce business has seen a high rise in the Dubai market. Additionally, the consumer’s tastes and preferences have also changed along with their shopping pattern. This has, eventually, led to a high inflow of e-commerce business.

Moreover, the UAE also creates an ecosystem for the development of e-commerce and rapid innovative business growth in Dubai. It always encourages new innovative drives and services that they can offer to the consumers. Thus, there is always an opportunity to enter the e-commerce market at any time in UAE. Collaborating with the business setup consultants at Shuraa Business Setup will make it effortless for you to start your e-commerce business in Dubai. They can assist you with the proper planning and paperwork and also provide you with genuine information for acquiring your E-commerce license Dubai free zone at minimum cost.

So, book a free consultation with our experts and get up-to-date information about the e-commerce market in Dubai, UAE. Call +971 44081900 or mail your queries at info@shuraa.com. You can also chat with our team at +971 50 777 5554.