How To Start an Ecommerce Business In Dubai?One of the many wonderful features of the Internet is that it allows everyone to do business in almost any location, from almost anywhere. An individual can launch a commercial enterprise from the comfort of their own home office if they choose – a brick-and-mortar building isn’t strictly required.In fact, many businesses thrive with nothing more than a well-promoted online presence, serving customers in all kinds of enterprises without ever meeting them. Depending on the nature of your operation, a well-designed website is all you need to start doing business and serving clients.Is setting up an e‑commerce site in the United Arab Emirates (UAE) any different? Does it afford entrepreneurs the same potential for success?Both of these are excellent questions!We did a deep dive into how you go about setting up an online business in one Emirate, in particular, Dubai. We researched the regulations, searched business sites that deal with these issues, and concluded that launching an e‑commerce site in Dubai makes excellent business sense. Continue reading and find out how you, too, can establish a business online in Dubai and make it a commercial success story.
Details About Dubai: What You Need To Know
- Folks In Dubai Love The Internet
Did you know that Dubai (and the UAE overall) has one of the highest penetration levels of the Internet anywhere in the world? In other words, people in Dubai use the Internet a lot! And that’s good news for anyone wanting to launch an e‑commerce site.There is virtually none of the usual resistance to online shopping, for example, that you may find in other parts of the world. Nor is there limited reach because the Internet is accessible almost everywhere. According to the Gulf Cooperation Council (GCC), more than 60 percent of online shoppers in the region are based in Dubai, and that number is constantly growing. (For more information about the Council and its role in the region, visit: Gulf Cooperation Council). That’s an appealing figure for residents or foreign entrepreneurs looking to establish their presence in Dubai. However, before jumping in with both enthusiastic feet, it’s essential to know the market and your potential role in it.
1- Know Which Business Model Is Best For Your Operation
In Dubai, there are different business models to choose from business-to-business (B2B), business-to-client (B2C), and client-to-business (C2B). The one you select should be determined by several factors, including your customers’ requirements, market trends, and your operation’s unique value proposition (UVP). Once this choice is made, you can get going on your e‑commerce website design and prepare to launch.
2- Decide On a Location
In Dubai, you need not have an actual place – a brick-and-mortar space at which you and your employees work. You can run things from afar, so to speak. Also, you need to decide in advance if you want to operate in the emirate’s free zone or non-free zone – in other words, on or off the Mainland.These are the two types of legal areas in which you can apply for a business license. The benefits of operating in the free zone (which means not on the mainland) are many: there is
Zero percent income tax.
Customs duties are extremely low.
All the company’s profits are kept by you, and you can retain total ownership of the e‑commerce business.
Those companies registered in the free zone are not allowed to operate outside the boundaries established by the license unless they apply for and receive a Mainland license. Any company in the free zone that wishes to do business in the Mainland zone must be granted permission from the Department of Economic Development of Dubai (DED). For more information on the guidelines, and the department itself, visit the Department of Dubai Economic Development.
3- Register Your E‑Commerce Trade Name
When selecting a name, you must consider and respect the customs and traditions of Dubai (and the UAE in general). Avoid cheeky or slangy names, and be sure there are no similar names already registered in Dubai. Stay away from names with any hint of controversy or ties to a specific religion. And if you register it in your own name, be sure you use your full name. Abiding by these guidelines will make the registration go faster and more smoothly. Register the name with the DED.For any online business or service to succeed, certain features must be in place. Below are some key features we’ve identified for e‑commerce sites in Dubai and everywhere! These are universal.
4- Most Importantly, Your Site Should Be Easy For Users To Navigate!
It also needs to be secure so customers who may share personal details (like banking details or contact information) feel confident that their privacy is protected. Choosing an experienced website builder and designer will achieve these outcomes.
5- Decide On a Payment Plan, Known As Payment Gateways
To have a payment gateway on your site, you must first establish a merchant account with your financial institution – a bank or other service provider. In the UAE, the organization responsible for electronic transactions is called the Telecommunications Regulatory Authority (TRA).Check out their guidelines for payment gateways, and be sure your website builder meets them. For example, customers need access to 24/7 support on your site in the event of a payment glitch. That’s one of the recommendations of the TRA. In order to meet TRA guidelines, you need at least one payment gateway – Stripe, PayPal, etc. — on your site.
6- Strong Customer Support Is Key
If there is one feature of an e‑commerce site in Dubai or anywhere else that contributes to success over the long term, it is customer support. Users must know that their concerns (payment issues or tech problems) will be handled promptly and efficiently. Doing so builds a repeat customer base. In Dubai, you can handle this all-important feature yourself in-house, or you can hire talent from outside your website builder to handle this for you.
How Do You Qualify For An E‑Commerce License In Dubai?
Like all places, Dubai has eligibility requirements you must meet in order to be granted an e‑commerce license. Foreign nationals are offered professional licenses, while UAE and GCC residents are granted e‑commerce licenses.The Criteria Are:
Applicants must be at least 21 years of age.
Must have valid UAE identification.
Your company name must be registered with the DED.
You must pay the license fee within one day of filling out the paperwork.
Once granted the license, it is renewed each year, and the fee is due annually as well.
Once you receive the license, it’s vital that you keep all relevant documents within easy reach so they are handy at renewal time. A complete list of all e‑commerce license criteria set out by the DED is on its website.
In Summary, Here Are The Benefits Of an E‑Commerce Business In Dubai
You pay little or no income tax or customs duties.
An e‑commerce business is flexible and gives you plenty of expansion opportunities.
Dubai has a very low VAT rate – just five percent. (Value Added Tax).
Warehouse facilities are available at reasonable costs if your business requires them.
There is plenty of local talent available for hire, whether it’s security for your site or a builder to get it up and running. Dubai is filled with experienced, knowledgeable people who know technology and know the culture – a win/win combo for any business person, particularly those from outside the UAE.
What Does an E‑Commerce License Cost?
That depends. Several factors impact price, including which type you want (Mainland or free zone) and how large your business is. But generally speaking, licenses run between (AED) 15,000 to 50,000.
Dubai is a modern, exciting and sophisticated place with a population that is not only comfortable using the Internet but also embraces it. That means that there is no resistance to doing almost everything online, from shopping to banking to investing and so much more. As an e‑commerce business person, you won’t have to build a market, providing you do your research before launching to determine whether there is a genuine appetite for the goods and/or services you’re looking to provide.Speaking of research: remember to do yours! If you can, talk to people who run e‑commerce sites in Dubai. Read about the demographics and customs of the folks you’re hoping to service. In other words, do your homework!Once your e‑commerce site is up and running in Dubai, it will be a hit if you pay attention to the two most important features that users insist upon: security and an easy payment gateway. That’s true for consumers not just in Dubai but all around the world.