How to Get an E-commerce License in Dubai (2024 Guide)

E-commerce has grown exponentially over the last decade, particularly following the COVID-19 pandemic. Experts believe that consumer behavior has been permanently altered, with more people favoring online browsing, comparing options, and purchasing through e-commerce platforms rather than physical stores. In the UAE, the e-commerce market is booming, as numerous individuals and businesses seek to acquire e-commerce licenses in Dubai.

In 2020, the UAE’s e-commerce market was valued at a staggering USD 3.9 billion, and market analysts project that this sector will reach USD 8 billion by 2025.

If you are considering obtaining your e-commerce license in Dubai and starting your own business, here are some guidelines to help you set up shop.

What is an E-commerce License?

Any business operating within a country is required to obtain a business license, whether it operates electronically or from a physical location. E-commerce licenses enable governments to monitor the companies within their jurisdiction, maintain a database of the services they offer, and regulate tax collection.

Operating a business without the necessary licenses can lead to severe consequences, including heavy penalties, suspension of activities, and even jail time.

E-commerce Business Setup in Dubai

Setting up a business in Dubai follows a straightforward approach and can be easily done for those who wish to benefit from the thriving economy of the emirate. The steps you need to follow are:

1. Decide on a Business Activity
   What services or goods do you plan to offer? Are you looking to sell products you create, or do you have a special skill that can be marketed as a service? Answering these questions will help you determine which e-commerce license to apply for.
2. Choose Between Mainland or Free Zone
   Decide where you want to establish your business: in the UAE mainland or in a free zone? Free zone licenses are ideal for international operations, while mainland licenses allow you to engage directly with UAE consumers.
3. Name Your Business and Register It
   Choose a unique name for your business that complies with UAE naming conventions, then proceed with the registration process.
4. Apply for the E-commerce License
   Approach the relevant free zone authority or the Department of Economic Development (DED) for mainland businesses to obtain your license. You will need to submit a business plan, identification documents, and other required paperwork.
5. Set Up Your Online Presence
   An e-commerce business cannot function without its digital component. Create a professional website or mobile app that will serve as your platform for operations.
6. Logistics and Payments
   Ensure you have a plan for receiving payments from clients and shipping orders. Establish partnerships with logistics and payment service providers to streamline these processes.

Read more:

• Business Setup in Dubai

Which Free Zones Offer an E-Commerce License?

Several free zones in the UAE offer e-commerce licenses or permits that allow you to set up an e-commerce business. Below are the free zones you can consider. 

• Dubai Multi Commodities Centre (DMCC)
• Dubai World Trade Centre (DWTC)
• Dubai South
• Fujairah Creative City
• Ras Al Khaimah Economic Zone (RAKEZ)
• Sharjah Media City (SHAMS)
• Sharjah Research Technology and Innovation Park (SRTIP)

Read more:

•  Company Formation in Dubai Free Zone 

How to Apply for an e-Commerce License in the UAE

The process to acquire an e-commerce license will depend on the jurisdiction in which you decide to set up your business. But here is an overview that can help you move through the process easily. 

Step 1: Prepare the Required Documents

Gather the following documents:

• Company Name: Your desired business name.
• Business Activity: A description of what your business will do.
• Copy of Your Passport: Including your visa or entry stamp.
• Share Ratio: Details on ownership distribution.
• Contact Information: Phone number, email, and complete address of all company shareholders.
• Photos: If required by the free zone authority.

Step 2: Approach the Free Zone or Mainland Jurisdiction

Submit your documents to the jurisdiction you’ve chosen and follow any directives they provide. A minimum payment of AED 5,750 is required to proceed with the application. For free zones, the application processing time is typically between 3 to 7 days, while mainland applications can be processed the same day or within 2 days.

Step 3: Receive Your Documents

Once your license is issued, you will receive digital copies of the relevant documents. If the free zone requires a physical copy, it will be mailed to you.

Step 4: Visa Application (if applicable)

If you opt for an e-commerce license in Dubai that includes a visa, you can initiate the visa application process after the immigration card has been issued.

Steps to Getting an E-commerce License in Dubai, UAE

The process of obtaining an e-commerce license in Dubai is simple and streamlined. Here are the steps you need to follow: 

1. Choose the right license type for your operation
2. Gather the documents required for your chosen e-commerce license. In general, these include a valid Emirates ID or a passport copy for the partners and managers; a detailed business plan; and a UAE proof of residency if required.
3. Register Your Business at Dubai’s Department of Economic Development.
4. Receive Your E-Commerce License once it is processed which usually requires a few days.

Required Documents for an E-commerce License in Dubai

Below are the documents that are usually required of business owners who want to acquire an e-commerce license in Dubai:

• 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)

E-Commerce License Dubai: Cost

DED e-commerce license fees in Dubai range between 6500 AED to 10000 AED and this amount may vary based on the type of your business, your business model, size, structure, and other factors.

Cheapest e-commerce license in UAE

The most affordable e-commerce license is the e-trader license which costs about AED 1,070. This license is only granted to UAE and GCC nationals and permits them to sell through social media platforms.

Different Types of E-Commerce Licenses in the Mainland

In the UAE mainland, you can choose from various jurisdictions based on your residence, your clients’ locations, and other business considerations. Here are the available e-commerce licenses:

Dubai

In Dubai, the eTrader license is issued by the Dubai Department of Economic Development (DED) and is exclusively available to UAE and GCC nationals residing in Dubai. This DED e-commerce license enables business owners to conduct their activities through social media channels. Additionally, Dubai’s mainland offers a general trading license, which permits a wider range of commercial activities online.

Abu Dhabi

The Tajer Abu Dhabi license is issued by Abu Dhabi’s Department of Economic Development (ADDED). This online trading license allows UAE nationals and residents, as well as GCC nationals, to establish an online presence alongside their existing trade.

Sharjah

In Sharjah, the Eitimad license is issued by the Sharjah Economic Development Department (SEDD). This license is designed for home-based and online businesses owned by UAE nationals residing in Sharjah, allowing them to operate on social media platforms.

Ras Al Khaimah

Ras Al Khaimah offers the Virtual Merchant License, which enables entrepreneurs to trade via social media platforms, websites, or apps. The business activities covered under this license include online retail, information technology, real estate brokerage, advisory/consultancy services, and professional and information activities conducted through technological channels.

Read more: 

• Company Formation in Dubai Mainland 

Key Benefits of an E-commerce Business in Dubai

Business owners who establish an e-commerce business in Dubai can enjoy numerous advantages in this thriving emirate, which offers a favorable business climate. Here are some of the key benefits:

• Lower Setup Costs: You can significantly reduce startup costs by avoiding the need for a physical storefront, which eliminates expenses such as rent, maintenance, and decor.

• Wider Audience Reach: Operating online allows you to connect with a broader client base beyond your geographical location. Thanks to Dubai’s strategic position, your reach can extend to Europe, Asia, Africa, and even the Americas.

• 100% Business Ownership: As a foreign entrepreneur, you can enjoy complete ownership of your e-commerce business without the need for a local sponsor. This grants you full control over your operations.

• Favorable Tax Environment: E-commerce businesses in Dubai benefit from a tax-friendly environment, with no personal income tax and no corporate tax (with a few exceptions), enhancing your profitability.

• Flexibility: As the owner, you have the freedom to work from anywhere and at any time, provided you have an internet connection. This flexibility allows for a better work-life balance.

• Multiple Business Activities: You can operate various business activities under a single license, adding versatility to your e-commerce operations and expanding your revenue streams.

• Government Support: The UAE government actively supports e-commerce initiatives, particularly in Dubai, as it aims to position the city as a leader in technology and innovation.

Final Thoughts on E-commerce Trade Licence in Dubai

As the world moves towards a more digital lifestyle, e-commerce businesses are thriving. The demand for e-commerce licenses is increasing as both locals and expats aim to succeed in the UAE’s growing economy.

Getting an e-commerce license offers many benefits, especially if it comes with a visa. This allows you to live in the UAE, run your own business, and enjoy the flexibility of working online while owning 100% of your company.

With Dubai’s supportive environment for businesses, now is a great time to start your e-commerce journey.

Frequently Asked Questions about e-commerce business setup in the UAE