Online Business in UAE

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With the advance of technology coupled with fast internet, customers have resorted to online shopping from the comforts of their own homes. The Dubai Economy and Visa estimated a transaction of $16 billion in 2019 and anticipated to grow 23% on average annually to 2022. Owing to the growing popularity of e-commerce, a study shows that 95% of purchases will be made online by 2040. With the right understanding of how to start an online business in the UAE, entrepreneurs and small business owners can rise and seek the opportunity.

The on-set of Covid-19 provoked endless lockdown restrictions across the UAE. People stuck in their homes had more time to browse and shop online. This resulted in the growth of online businesses. They can order safely from their homes and have their chosen products delivered conveniently at their doorsteps. The pandemic has created a perfect opportunity for businesses to reach out to a highly engaging audience online.

Why Is The UAE The Best Option for An Online Business?

Online business in the UAE already exceeds $10 billion. With over 90% of the people using the internet, it makes an opportunity to explore these sectors. Local supermarkets, furniture, clothing, and even household items have created a niche in online business. Key benefits of starting an online business in the UAE are: 

  • Complete relaxation of taxes and fees except for 5% VAT
  • UAE jurisdiction charges comparatively low operating charges.
  • Free zone areas offer 100% ownership of a foreign company.
  • There is no restriction over the amount of withdrawal in the UAE.
  • No currency restriction.
  • Entrepreneurs can obtain a resident visa for three years with the possibility of renewing it further.
  • E-commerce license is free of import/export duties.

7. How to establish an online business in the UAE?

Minimal bureaucracy and excellent logistic system of UAE makes it a heaven for new business owners and entrepreneurs to explore the world of e-commerce. Furthermore, the process of starting and registering in the UAE is also straightforward and quick. Let us see in details how to start an online business in the UAE:

6. Choosing The Company Type

For any business to flourish, it has to be trending or popular. Research and proper assessment should be done before choosing the kind of place to set up. The most popular e-commerce businesses in UAE 2020 are fashion and jewellery, smart home products, mobile and music accessories, and online learning platforms.

5. Selecting The Right Jurisdiction

UAE extends different areas for businesses to set up registration with their unique benefits. Depending on the company goals and market research, it is essential to choose from where to get the license. UAE free zone offers zero tax rate and exemption of customs as well. There are over 20 free trade zones in Dubai. The mainland setup allows online business owners to trade freely anywhere in the UAE market but with the necessity of a local agent. They are also permitted to take Government contracts.

4. Registering The Business Name

The next step in setting up an online business in the UAE is to select the company’s name. It should be original and should not be against the sentiments of the people of the UAE. The company needs to provide different alternatives for the jurisdiction to select.

3. Setting Up A Physical Office

E-commerce does not require any official premises, unlike traditional stores. However, online businesses must have an office with a legal address in Dubai.

2. Approval of The License

The next step is to apply for a license. In the case of business in the free zone area, they can directly apply to the respective free zone. For Mainland, online business owners have to apply to the municipality or the Department of Economic Development of UAE.

Opening A Bank Account

After completing all the above steps, the last requirement is a bank account. Local banks offer many good opportunities to open a bank account.

What is the cost of starting up an online business in the UAE?

The cost of the business depends on the size, the number of visas, and where the company is set up (the Free zone or the Mainland). An approximate cost for setting up an online business in UAE can range from AED 15,000 to AED 50,000.

1. Conclusion

UAE has taken measures to welcome entrepreneurs from all over the world. Online retail is at its peak at the moment, and UAE is the most advanced nation when it comes to the e-commerce market. With the right knowledge of the UAE and its regulation, one can assure smooth and easy setup of online businesses.

Shuraa Business setup, a leading company formation expert, is a right stop to get a complete guide on how to start an online business in the UAE. They work closely with the government agency providing ultimate assistance throughout the process. 

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