Currently, the e-commerce sector is growing worldwide. It is facilitated by the widespread use of the Internet, the availability of gadgets for everyone, and continued developing international services. The E-commerce segment is gradually taking over traditional stores. It is mostly in the area of electronic commerce, furniture, clothing, and household goods. Unlike regular stores, online stores are much cheaper, and at the same time, the customers are not limited to a region or a country.
As for the UAE, the e-commerce business market is as profitable as the online market in other areas. The E-commerce sector has already exceeded $ 10 billion. Given that more than 90% of people now have access to the Internet, there is an excellent opportunity for further growth.
Also, online trading and other types of businesses, with preferential tax treatment conditions operating in the free zone.
How To Start An E-Commerce Company in UAE?
If you want to start up an e-commerce company in Dubai, you must go through several processes, starting from website development to acquire an e-commerce license approved.
1. Choosing the right type of company
There are several options available here. You can register a limited liability company, branch of a foreign parent company, representative offices, and several other types of companies. Depending on your plan and potential access to other markets, one or the other option would be optimal. The standard type of business in Dubai is a limited company and its subsidiaries, as they have an essential set of advantages. Free zones are offering different conditions and preferences for companies that are listed here.
2. Company registration options
There are various free trade zones in Dubai; besides, some of the other Emirates like Abu Dhabi, Ras Al Khaimah, Ajman, etc. Again, you should select a place where you can get a license.
Dubai offers two options, the first is the registration of companies in the free zone, and the second is the registration of companies outside the Freezone. Registering a company outside the Freezone is the right solution if you plan to do business in the region (to the company as there are no restrictions on the import and export of goods and there is no charge for import/export). However, unlike companies in the free zone, foreigners have to find a local partner that will hold a 51% stake.
The free zone is not allowed to trade outside the Freezone but at a lower cost.
Thus, when choosing the place of registration, it is necessary to consider all these factors.
3. Registration of trade name of the company
Selecting the name of an online store is an essential step for this name should be memorable. When you register, you’ll need to provide some alternatives if the name is already in use.
4. Choosing a physical office in Dubai
Though an online store does not have a place, such as the classic store, there should be a legal address (office), as the Dubai authorities oblige e-commerce companies to have one.
5. License Agreement
A Free Zone is a cost-effective option, at least in the early stages, and allow full ownership of 100% without local shareholders is required – Freezone Authority itself acts as a local sponsor you. Freezone companies are exempt from customs duties of goods imported from abroad, but these items should remain in the Freezone.
However, the Free zone’s main limitation is that you are restricted to operating within the Freezone only – you can import and trade in the site only. Therefore if you want to sell products or services to companies and individuals in the UAE, you will need land use and land agents (which has a trade license mainland). These agents or local distributors will then distribute goods or services ashore.
There are various Freezones in the UAE authorities now offering E-Commerce activity license with attractive offers – please ask a member of our team for more details about each Freezone’s options in the UAE.
6. Opening a bank account in the UAE
Every company needs to open a bank account in Dubai, so you’ll need to open it. Local banks offer many good opportunities to open an account, including for offshore companies.
What Are Some Key Factors To Consider While Starting an E-commerce Business in UAE?
1. On-demand point-of-sale:
Your point-of-sale should help buyers involved with the e-commerce platform, browse and test products, and purchases at their convenience. Offer personal services such as wishlist stored and history to compare and reorder to consumers efficiently.
2. Integrated AI:
With the retail sector, a key role is taken over by artificial intelligence; you can take advantage of AI tools to collect, study, and personalized shopping experience from start to finish. You are integrating the AI to create an efficient way to analyze your browsing and shopping habits of consumers, which can identify and correct problems that could lead customers to drop off.
3. Payment flexibility and security:
Accept multiple payment methods, ranging from credit card and digital wallet for cash and on-delivery payment. Make sure all secure online payment with encryption and set up an e-commerce platform on the VPN (a virtual private network) to prevent the threat of hackers.
4. Vendor shipping a few:
Offer a variety of options to help meet customers’ needs in different phases of the buying process. For example, offer free shipping, which can take several days longer with faster shipping options to cater to tourists charge extra for those who want to keep and those who wish to purchase them faster.
5. E-commerce locally for UAE:
Make sure your website has an Arabic version. Do not just translate your content, but goes beyond to provide a personal experience to speak Arabic, such as changing Arab sites’ orientation you go left to right. Offering local range in Arabic will be a crucial differentiator in the GCC market.
6. Sell-through several channels:
Develop your online store to sell through the medium as much as possible, as its e-commerce platform, third-party market such as Amazon, Walmart, Etsy, etc. even if it’s just for brand awareness.
7. Stay informed:
Keeping up with industry news through relevant publications and events will help you stay updated on the trends and significant advances in technology that could work for your business—a careful study of e-commerce platform that excels in the market offers a great customer experience. By analyzing a large sample in your field, you will find features to apply to your brand.
Some of the Key Advantages of E-commerce Business Setup in Dubai are-
- No taxes and fees (except for VAT of 5%);
- There are no restrictions on withdrawal of capital and no currency restrictions;
- Possibility of 100% ownership of a foreign company in one of the free zone;
- Operating costs are lower than in other jurisdictions.
- No customs import/export e-commerce license.
- The possibility of obtaining a UAE residency visa for three years with the possibility of extension.
It is essential to build your e-commerce business to benefit from shifting trends and dynamics in the retail industry. As the United Arab Emirates leads the Middle East market, a multi-channel e-commerce platform is unique. You get ready for success.
Talk to one of the best consultants in the business setup in Dubai on how they can help you start your business e-Commerce.
Amy is a zealous writer and With her a passion to read and write about business setup consultants, business setup in UAE, business setup services in UAE, company formation and pro services, and its implementation in our modern world. Her inquisitiveness towards learning about how business has evolved in emirates is commendable. With such curiosity embedded in herself, she researches extensively before writing a blog to deliver a credible and detailed content piece.