A complete guide to
E-commerce Licence in Dubai
If you are planning to apply for an e-commerce licence in Dubai or in any other Emirate, we have prepared a simple guide that will help you easily understand everything you need to know to launch your own e-commerce company and be a part of the UAE’s booming online retail industry.
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What is an E-commerce License?
The UAE’s e-commerce market is absolutely thriving! If you are wondering why many people are trying to get an e-commerce licence in Dubai, that’s because the UAE e-commerce market’s value skyrocketed to USD 3.9 billion in 2020, which is equal to a 53% year-on-year increase. Market analysts believe this is just the start – and that the UAE’s e-commerce sector will reach a value of USD 8 billion by 2025. That’s more than double its current value in just four years!
With such huge opportunities awaiting aspiring entrepreneurs, it is no wonder that many are looking to set up their own online business and start taking advantage of this huge opportunity – which is probably why you are here.
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How to apply for an e-commerce licence in the UAE
The application process for an e-commerce licence may differ for each jurisdiction, but we are giving you an overview so you can get a better idea of the documents you need to prepare and the processes you need to go through.
Step 1: Prepare the following details and documents
- Company name
- Business activity
- Copy of your passport or visa/entry stamp
- Share ratio
- Contact number, email and complete address of all company shareholders
- Photos (if required by the free zone)
Step 2: Liaise with your chosen free zone / mainland jurisdiction
- Submit the required documents to the free zone or mainland jurisdiction.
- Once they have received the documents, your e-commerce licence application will enter the stage of initial approval. In most cases, you have to make a payment to the free zone or mainland to initiate the application process. The rate of an e-commerce licence may start from AED 5,750, depending on the jurisdiction.
- Most jurisdictions require pre-approval first before they issue your licence. The application process may take 3 to 7 days in free zones, whereas your application can be processed on the same day or up to 2 days in the mainland.
Step 3: Wait for your documents to be released
- Once your licence has been issued, then the digital documents will be sent to you. Some free zones may require original documents, which will be sent to you at a later date.
Step 4: Start your visa application
· If the e-commerce licence package you chose comes with visa(s), then the visa application process will begin after the immigration card has been issued.
Which free zones offer an e-commerce licence?
There are many free zones in the UAE that offer an e-commerce licence, or an alternative that permits you to conduct e-commerce activities. Here are some of the top UAE free zones where you can apply for an e-commerce licence:
Can you get an e-commerce licence from the mainland?
Yes! Mainland jurisdictions also provide an e-commerce licence and we discuss them in the next section.
What are the different types of e-commerce licences in the mainland?
If you are getting a mainland e-commerce licence, then you need to familiarise yourself with the options offered by different mainland jurisdictions.
Issued by the Dubai Department of Economic Development (DED), the eTrader licence allows entrepreneurs to conduct business activities via social media channels. However, at the moment, the eTrader licence is only available to UAE and GCC nationals living in Dubai.
In addition, only a single owner can be registered and you cannot set up a physical shop or apply for visas.
Another option is to obtain a general trading licence in Dubai mainland, which allows you to conduct commercial activities online. The prices for this premium trading licence start from AED 30,000.
The Abu Dhabi Department of Economic Development (ADDED) issues Tajer Abu Dhabi, its version of an online trading licence for UAE nationals and residents, as well as GCC nationals. It permits licence holders to add their online business activities to their existing trade licences, or get a new licence to perform business activities online (through websites or social media channels).
This e-commerce licence supports three kinds of legal structures:
- Establishment for Emiratis and GCC nationals
- Single shareholder company for Emiratis and GCC nationals
- Limited Liability Company for UAE residents with Emirati partners
Home-based and online businesses that operate via social media channels can apply for an Eitimad licence, which is issued by Sharjah Economic Development Department (SEDD). The licence is available to UAE nationals living in Sharjah. They should also be at least 18 years old.
Ras Al Khaimah
Ras Al Khaimah has also launched its own online business licence: the Virtual Merchant Licence. This licence allows entrepreneurs to conduct business activities via social media platforms, websites or smartphone applications.
Available to UAE nationals living in Ras Al Khaimah, the virtual merchant licence covers the following business activities:
- Online retail
- Information technology
- Real estate brokerage
- Professional and information activities performed via technological channels
Frequently Asked Questions about e-commerce business setup in the UAE
How much does it cost to start an e-commerce company?
A basic business setup package for an e-commerce company can start from AED 5,750. The cost, however, can change depending on your requirements, such as if you need an office space or more residence visas.
Do you need to rent an office space?
This will depend on the free zone where you are setting up, but most do not require an office space.
How long do you need to start an e-commerce company in the UAE?
Your trade licence can be issued in 24 hours, provided that you have all the required documents ready.
What is the best free zone for e-commerce?
The best free zone for your business is the one that meets your unique requirements. So consider your product, your target market and your target audience when looking at the different free zone options available to you.
You also need to consider that some free zones are sector-specific, which means they are specially designed to cater to specific sectors (e.g., media, education, finance, etc.), while some free zones are generalist and can therefore accommodate different types of businesses.
There are more than 50 free zones in the UAE. Choosing the wrong one can leave you with expensive mistakes, so make sure you select the right one to ensure you are set up for success.
What are the penalties for setting up an e-commerce shop without a licence?
Individuals and/or businesses that are trading illegally can be fined up to AED 50,000 per transaction.
Are e-commerce businesses required to register for VAT?
An e-commerce business must register for VAT if the value of its taxable supplies and imports goes above AED 375,000 per year. For businesses whose supplies and imports exceed AED 187,500 per year, then VAT registration is optional.
eTrader licence vs. e-commerce licence in Dubai
As we’ve mentioned above, an eTrader licence is primarily for UAE and GCC nationals living in Dubai who want to do business through their social media channels. So, if you are a non-UAE or non-GCC national, you may not be eligible to apply for an eTrader licence.
In addition, an eTrader licence only allows commerce activities via social media channels. If you wish to sell goods and accept payments through an e-commerce website, then you will need to secure an e-commerce licence.
When do I need a licence for an e-commerce website?
The answer is: Immediately! You need a valid trade licence to conduct any commercial activity in the UAE.
What is the difference between an e-commerce business licence and a business trade licence?
An e-commerce business licence is a type of trade licence that specifically permits you to sell physical goods in the UAE through an e-commerce website.
On the other hand, a business trade licence is the umbrella term for all types of trade licence, which could be a commercial, industrial or professional trade licence issued in a free zone or in the mainland.
Does an e-commerce licence allow me to sell to all of UAE or just within the free zone where I am registered?
Yes, you can sell to all of the UAE with your e-commerce licence. However, you will need a distributor in the mainland.
What fees do you have to pay for an e-commerce licence in Dubai?
As mentioned above, the rates start from AED 5,750.00.
Can I run two businesses under one e-commerce licence?
Yes! As long as the activities are related to e-commerce. What is not allowed is conducting business activities that are unrelated to each other. For example, you cannot conduct trading activities and then provide professional services under the same licence.
What products can I sell online without an e-commerce licence?
Nothing. To protect the interests of both businesses and consumers, the UAE e-commerce sector is strictly regulated. That is why all aspiring e-commerce entrepreneurs must secure an e-commerce licence to legally sell physical goods in the UAE.