Are you interested in starting an eCommerce business in Dubai? There are a few things you need to know before getting started. In this article, we will cover the basics of starting an eCommerce business in Dubai, including the legal requirements, setting up a website, and marketing your business.
Governing a business is far better than 9-5 jobs. It will provide you with a passive source of income as well as independence from a scheduled daily routine. Most professionals and consultants suggest setting up the business in any mega city or growing country.
It will enhance the chances of the company taking a sudden boost. There are various places you can start your business, and Dubai is one of them.
The United Arab Emirates is one of the growing economies in the world with a bright future for e-commerce; it is expected that the sector will double within a few years. If you set up your eCommerce business in Dubai, it will grow along with the rapidly growing middle east region.
If you also want to start your own E-Commerce business in Dubai, then there are some essential facts you must know. Here in this article, we have provided the critical points.
Why start an eCommerce Business in Dubai?
There are various reasons that make Dubai a perfect place to set up an eCommerce business. These reasons are mentioned below:
Fastest growing e-commerce market
Dubai is a mega-city in the UAE which holds a market value of US$10 billion in the e-commerce sector. About 80% of the adult population of Dubai used to buy goods and products online. Also, the government of the UAE has launched a Dubai e-commerce strategy to solidify the city as an international logistics hub in the region of the middle east.
The most significant benefit to setting up any kind of business in a fast-growing economy is getting massive growth within less time. Especially, USE is assumed to contribute a total of AED12 billion (approx US$3.2 billion) by 2023 to the country’s economy. The main objective of the UAE government behind launching such schemes is to attract foreign investors to start their businesses with almost 20% fewer expenses.
Support for new businesses
UAE is one of the countries with ease of doing business. As per the current scenario, it ranked 16 among such countries. When it comes to the allover method, the UAE stands much better than some popular countries, including Canada, Germany, and France. There are FTZs (free trade zone) managed by Dubia, which are specially reserved areas for businesses. You will enjoy fewer operating costs, lower taxes, and great opportunities.
One of the most popular FTZs in Dubai is DMCC which offers various amazing features and advantages. This includes 100% repatriation, 0% Personal Income Tax, and 0% Corporate Income Tax. All these benefits will finally result in great profits and an established e-commerce business in Dubai.
The biggest problem faced by the e-commerce business is transportation, which is the most critical aspect of the e-commerce business. You will get a great advantage from the carrier in Dubai. Dubai is equipped with a world-class infrastructure of transportation. It is easy for your delivery personnel to deliver the parcel from one place to another. The quality of roads and bridges will not let your services annoy the people.
Also, the most prominent feature of Dubai transportation is sustainability; all the bridges, underpasses, flyovers, and other routes have good connectivity that supports economic growth. The seaports are directly interlinked with all the central locations of Dubai.
Read More here: Bank Account Opening in Dubai
Steps for opening an e-commerce business in Dubai
Everything has some precoders and formalities, the same with the e-commerce business. George is starting an e-commerce business in Dubai; there are a few steps and procedures you have to accomplish to avoid further legal and joint issues. Below mentioned are the detailed steps to be followed for starting an eCommerce business:
Identify the market potential
It is the basic rule that has to be followed before starting any business. You have to decide on an adequate business model, the latest trends in the market, needs and requirements of the customers. After a deal analysis and research, you can go for the various business modules like B2B (business to the business module), B2C (business to client module), and C2B (client to the business module).
Decide upon a durable location
Choosing the location is one of the most critical steps you need to consider while thinking about how to start an eCommerce business in Dubai. The e-commerce business does not require any physical office or headquarters to operate in Dubai. You can govern it online from any part of the world.
There is a need to get a license as approval for your e-commerce business. There are mainly two legal areas that can be moved toward getting a license in Dubai; they are the mainland zone (non-free zone) and the free site. If you choose the mainland zone, you have to get permission from the officials and other authorities as well as need to pay additional taxes. At the same time, the free zone offers various benefits like no income tax, no corporate tax, fewer customs duties, 100% ownership rights, repatriation of business profits, and many more.
Trade Name Registration
There must be a name that is used to recognize your eCommerce company in Dubai. To register the trade name of the company, you need to fill out the application form given by the economic department of the UAE. There are a few things to keep in mind while choosing the trade name; here are they:
- Only use simple words in your trade name.
- Avoid religious and controversial words and phrases in your trade name.
- Choose the full name if you want to use the name of any person, including you, as the trade name.
- The name must be legitimate in UAE.
- Do not copy the name of any existing company in Dubai.
Get an E-commerce license in Dubai.
After deciding upon an adequate trade name and location for your e-commerce business in Dubai, you have to get a license to carry out e-commerce business and other related activities like marketing on different social media platforms and many more. You have to contact the economic department of UAE, the governing body of e-commerce licenses. If you apply for a free zone license, you will only carry out trade with the local distributor, but the mainland license will allow you to carry out work from local markets.
To get the eCommerce license in Dubai, you have to apply to the economy department of UAE. The permit is available for UAE, GCC, and foreign nationals. There are some requirements and eligibility you have to meet to get the e-commerce license in Dubai. These requirements are mentioned below; let’s have a look:
- You must have a legal Emirates Identity.
- You must have crossed the age of 21 or above while applying for the license.
- The trade name of the company must be registered.
- The license fees have to be paid within 24 hours of applying for the permit.
- All the legal formalities and requirements must be fulfilled with the registration with DED.
- After getting the license, it must be renewed every year. The time must be before one month of the expiry.
The requirement, as mentioned above, must be fulfilled along with some documents. These documents must be in pdf format and must be updated with biometrics. Here are the steps you need to follow to apply for the e-commerce license in Dubai:
Fees for license
There is a separate fee you have to pay while applying for the e-commerce business in Dubai. On the assumption, it is almost AED 15,000 to AED 50,000. There are various factors that determine the fees; some of these factors are mentioned below:
- The spread or extent of your business
- Commercial area and office space
- Whether you are applying for a mainland license or a free zone license.
- Type of your business
- Several visas were applied.
Develop a website
There must be a platform from which the customers will avail of your services. You have to launch a website with the registered trade name and unique domain address. Keep in mind the website must be user-friendly, well optimized, secure, and stable for all users. A minimal lag can lead to a wrong impression of your services in the mind of customers. There are hunters of platforms and sources available from where you can build your website without coding. Start eCommerce Website with Shopify
Also, you can hire WordPress professionals to prepare a simple website for your e-commerce business in Dubai.
The main motive of any business is profit and earning. To provide a safe and secure gateway for payment to your customers, you have to open a merchant account from the payment service provider or local and recognized bank. TRA (Telecommunications Regulatory Authority) is the governing body of all electronic transactions in the UAE. You have to follow all the guidelines before setting up a payment gateway for your eCommerce business in Dubai.
More importantly, your website must have 24×7 customer support for the customer in issues like failure of payment, false payment, and many more.
Here is the top 10 payment gateways list available in Dubai, UAE
- APS – Amazon Payment Services
- Faster pay
In a business, customers are everything. So, make sure that proper support must be provided to the customers. Three main aspects determine the survival of your e-commerce business, i.e., technical elements, database, and import-export facilities. Make sure to work on them. There is third-party logistic support available you can hire them or build your own logistic support.
Register with port and custom authority
If you set up an eCommerce business in Dubai, then you have to get registered with the port and customs department of UAE. As the products and items have to be imported from different nations in the UAE, this process includes various procedures and government protocols. If you are registered with the port, customs authorities can freely import products from other nations.
Get an import & export code
After getting registered with the relevant customs department, you will get a unique IEC (import-export code) that is mandatory if you import or export goods and items from other countries. To get his number, you have to submit the registered trade name along with your e-commerce business license to the customs authority of UAE. After the legal procedure of a few days, you will be allotted a unique import export code.
Find the right vendors
If you have your own manufacturing unit and manufacture a product, then you can display it on your platform and sell it as well. But if you want to become a reseller like Amazon, then you have to contact the vendors and give them the offer to display their products and goods on your website. The procedure of getting a reliable vendor is simple. You have to contact them through email and approach them physically.
Setting their vendor profile on your website, and after the complete procedures, they can start selling those products and goods. A specific percentage will be transferred to your bank account after every successful purchase of the goods and products.
Create a logo
Every brand has a symbol and watermark that will help the users to identify it. Similarly, big e-commerce companies like Amazon and Flipkart also have characteristics that benefit their customers to recognize them. You will also have to create a logo for your business. There are various services and professionals that will help you to create a memorable and unique logo for your business. Keep in mind not to copy the name and logo of existing brands. Create Free Logo for Your eCommerce Business
Benefits and Perks of e-commerce Business in Dubai
There are several benefits and perks you will enjoy if having an e-commerce business in Dubai. Some of these benefits are mentioned below; let’s have a look:
- There are no import and export duties, and more importantly, you are free from additional taxes as well.
- If you want to expand your business, you will get more facilities and flexibility through your eCommerce business.
- The mainland license will allow you to own a cost-effective office and commercial area in Dubai.
- For the Freezone license, you will get the warehouse for your eCommerce business which is affordable and spacious.
- You can enjoy ample physical office space in Dubai.
- Only 5% VAT will be charged for all the transactions that take place in the UAE, which is less than any other country in the world.
- An e-commerce license holder can freely place the transactions in several currencies, including USD, INR, Pound, Euro, and many more.
Essential components of an Ecommerce company
E-commerce business has some aspects and essential components that you need to fulfill; here are some of them:
What to sell?
Dubai is the hub of business so you will find thousands of e-commerce giants already governing the massive company. You have to decide upon a specific thing that you sell. If you have your own manufacturing unit, you can display your product on your website, but if you want to become a reseller, you need to give offers to the vendors who will come and display their products on your platform.
The most prominent example of resellers is Amazon and Noon, which have established businesses in e-commerce in UAE. Similar to them, Namshi and Shein are platforms that offer fashion and lifestyle products. So before starting an eCommerce business, you must have to decide upon a specific product or category you will display on your eCommerce digital platform.
Building a reliable platform
After getting an e-commerce license from the economy department, you have to build your website that acts as a platform where the customers visit, compare prices, and place their orders. There are some essential components of the edge time websites that must be followed by the eCommerce websites; here are they:
- Zoom option for viewing products and multiple images.
- Customer Registration to get necessary details like address and interests.
- Primary Contact information and feedback as well.
- Amazing offers on the homepage as per the interest of the user.
- Product categorization in an adequate manner.
- Ratings and reviews by verified customers.
- Shipping Details and an AI to detect them.
Marketing on social media
Marking is the best option to make people aware of your platforms. You can run the ad campaign on various social media platforms like Youtube, Instagram, Facebook, and Twitter. More importantly, keep in mind to register all your business social media handles with the National Media Council to avoid fines and penalties. You can display offers, deals, and other significant events on these social media handles.
Expert advice and consultancy
If you are thinking about how to start an eCommerce business in Dubai, then make sure to get advice from professionals and experts at every step. Many big e-commerce sites have a team of researchers who study the behavior of customers and present deals based on this data. The same you need to follow. Conduct various surveys and analyze the pattern of your customers, and provide sales and offers based on their interests. It will make your business trouble-free and straightforward.
There must be 24×7 customer support provided to the customer. There must be a team that will work on the feedback and rating of the customers. That will help you to determine what to change and what not to. You can hire outsourced freelancers or make an in-house team as well.
Customers always expect time delivery from e-commerce platforms. It will be very disappointing for the customer who orders something and gets in late from the time mentioned. The logistics support will determine the timely delivery and ensure smooth operation in the imports and exports.
Warehouse and office
Setting up a warehouse or an office is the prime requirement of an e-commerce website. If you want to deliver goods and products to the customers online, then there is a need for a faculty to pack and dispatch them. A storage and sorting facility is a must for good delivery services. There are various warehouses available on lease in the UAE, and you can rent them with a legal contract. Also, if you have a personal space, you can register it for commercial use and use it as a warehouse.
Every nation has different rules and regulations for commercial purposes. There is a rule in Dubai that states that only the local residents can start a business on the mainland or perform any commercial work. If you want to set up an eCommerce business, then you have to get a partnership with the local sponsor. You will also need local sponsors for the logistics and clearing of import goods.
The 9-5 jobs as an employee will not help you to fulfill all your needs and requirements. There is a need to think and implement something big and start a business. There are hundreds of business opportunities across the globe, and one of them is an e-commerce business. As per the current data, there are more than 4.7 billion internet users in the world, and about 13% of the sales take place through online platforms. This will open the gateway for entrepreneurs to set up an eCommerce business.
It can be set up for any part of the world, but UAE is the best place because of transportation, fewer taxes, and easy and affordable price. More importantly, the procedure of getting the license for an e-commerce business is easy and quick.