5 Things to Know About Starting an E-commerce Business in Dubai

Author: Paul Bryson, Group Commercial Director

Starting your own e-commerce business can surely be exciting. Who knows, maybe your company will be the next Amazon, eBay or Alibaba! 

However, before you start your e-commerce business in Dubai, here are a few things you need to know to ensure you are set up the right way. 

Things to know before setting up an e-commerce business in Dubai

Starting any business requires careful consideration of the factors that can make or break your venture. When it comes to an e-commerce business, the initial aspects you need to consider include: the products or services you want to sell; a basic business plan; market analysis; and a marketing and customer acquisition strategy.

Once you have these ready, then you can start working on the steps needed to establish and run an e-commerce business in Dubai.

1. Choose the right business structure

Determining the structure of your company is one of the most critical steps in setting up a new business in Dubai. This primarily depends on your activities and preferences (e.g., if you want 100% ownership or prefer having a local sponsor or partner). 

In the case of e-commerce businesses, the ideal company structure would be a Limited Liability Company and a Free Zone Company. Getting advice from a business setup consultant can help you determine the right structure for your e-commerce company.

2. Set up in the right jurisdiction

You can register your company in a free zone or in the mainland, but it will depend on the nature of your e-commerce business.

A mainland licence gives you the freedom to trade or sell your products and services directly to the local market, while registering your company in a free zone will require you to work with a local distributor. 

Furthermore, there are more than 30 free zones in Dubai, with each one offering complete foreign ownership and the ability to trade internationally. 

In choosing a jurisdiction, consider the factors that will benefit your business more in terms of building market share and scalability. 

3. Register your business name

Choosing the name of your business and trademarking it is an important step in establishing the identity of your brand and company. 

When registering, you will need to provide several alternatives in case the name is already taken, and then file for trademark protection. 

Trademark registration can give your business protection and safeguard the investment you have made into the logo and brand name. It will also prevent another business from using your brand or company name.  

Trademark registration in the UAE is governed by the UAE Ministry of Economy, the official authority for the listing, renewal and cancellation of trademarks. 

4. Establish your online presence

The most important aspect of your e-commerce business is your website, as it will be the platform where you will showcase your products or services. Your e-commerce website will also be crucial in your digital marketing strategy. 

To build an attractive, income-generating website, you have to make sure it is user-friendly, secure, easy to navigate and optimised for mobile use. In a previous study, Google found out that more than 50% of mobile website visitors leave a webpage if it takes longer than 3 seconds to load. 

The next step is to decide the type of online payment processing gateway you can add to your website, which will allow your business to collect payments digitally through a merchant account. You can also present different payment options to your customers, such as cash on delivery (COD).

5. Open a business bank account

Once you’ve successfully applied for your e-commerce licence and established your business, you should set up your business bank account to manage and keep track of your finances. 

You may be tempted to simply use your personal bank account for convenience and to avoid additional fees. However, it’s important to note that revenues from your business can be much more difficult to track when it is combined with your personal finances.

It can also create confusion when determining the tax liabilities and cash flow of your business, leading to inaccurate bookkeeping. 

Now that you have a better idea of the key aspects involved in establishing an ecommerce business in Dubai, the next step is to get everything prepared so you can get started with the help of a reputed business setup partner, like Virtuzone.

Build your e-commerce business with Virtuzone 

Since 2009, Virtuzone has assisted over 45,000 entrepreneurs in establishing their companies in the UAE. We are the most trusted company formation specialists in Dubai and the UAE, with in-depth knowledge of the complete business setup process. 

We have more than a decade of experience setting up all types of businesses in the country, including free zone and mainland companies, as well as providing business support services that help our clients succeed – from branding, PRO and mail management, to IT support, accounting, VAT and payroll.

If you are interested in setting up an e-commerce business in Dubai or anywhere in the UAE, please fill out the form below and our team will contact you shortly.

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UAE laws and regulations as well as pricing related to company formation are subject to change without notice. While we produce our content on the basis of thorough research, laws and regulations might have changed since this content was published. Furthermore, responsibility for any information in external links lies solely with the operator of the third party website.