If you’re looking to start an online business in Dubai whether you’re selling clothing, beauty , electronics or other items you will need a business licence.The great thing about Dubai is there are multiple options available. You can either create a company in the mainland, a free zone, or if you meet the criteria you can also use an eTrader licence.
However, how much will your e-commerce licence cost in Dubai? What documents will you need? And what type is right for you?We’ll break it down below.
Dubai E-Commerce Licence at a Glance
You need a valid business licence to operate an online business.A Dubai eTrader licence costs AED 1370 (published price) but you must be an eligible candidate.
Costs of creating a company in the mainland or a free zone will depend on your activities and package.You may have additional costs for visas, office space etc.
Before applying you should know where you are legally allowed to sell your products.
E-Commerce Licence Costs In Dubai
The cost of an e-commerce licence will depend on what business you’re setting up.
If you’re just looking to set up a small business from home then you could qualify for an eTrader licence. However if you want to create a larger company you may need a mainland or free zone licence.
Below is a quick overview to give you an idea of the costs.
| Licence Type | Cost Starting From |
| Dubai E-Commerce Trader | AED 1370 |
| Dubai Mainland Company | AED 11700+ |
| IFZA Dubai Free Zone | AED 11700+ |
| SHAMS Free Zone | AED 5750+ |
| DMCC Basic Biz | AED 35484 |
Please note these are just examples of the published costs and packages available. SHAMS is based in Sharjah.The total cost may vary depending on your activities, visa requirements, office requirements and any extra approvals.
Always ask for a detailed breakdown of what is included in your package.
What Is An E-Commerce Licence In Dubai?
An E-Commerce Licence will allow you to run an approved online business in Dubai.
With the correct licence you can sell your products via your own website, social media accounts and online marketplaces like Amazon UAE and Noon.
For example, if you wanted to set up an online clothing store you would need a licence for the products you were selling.This would be the same if you were selling skincare, accessories or electronics.
However, not all licences will cover all products. Some products will require extra approval from the correct UAE authorities.It is important to select the correct activity for your business.
Types Of E-Commerce Licences In Dubai
There are a few options you can choose to register your online business within Dubai. Each licence will have different rules, costs and advantages.
Dubai Mainland E-Commerce Licence
A licence from the Dubai Department of Economy and Tourism (DET).
This is ideal for businesses looking to sell directly to the UAE market and may wish to open a physical shop, warehouse or office.For example, if you’re setting up an online beauty store and looking to expand into a retail shop in Dubai then creating a mainland company could be a good option.Most mainland activities will allow full foreign ownership.However this will depend on your activity.
Dubai Free Zone E-Commerce Licence
Another option for entrepreneurs looking to start an online business.There are multiple free zones in Dubai. IFZA, DMCC & Dubai CommerCity.Free zones can be a good option for those looking to sell internationally or if you don’t need a physical retail shop.
Some free zones also have flexible office options which can help reduce initial costs.
Something to note is that you won’t be able to trade directly on the mainland with a free zone licence. You may require extra approvals and appropriate trading options.
Dubai E-Commerce Trader Licence
This licence is for eligible candidates looking to perform approved activities from home.
This can be a good option for small businesses using websites/social media to sell their products.However there are specific rules around who can apply and what activities can be performed.This isn’t the same as creating a full mainland company. Don’t assume you’ll be eligible for a residence visa.
Documents Required For An E-Commerce Licence
Most of the documents needed will be simple however some businesses will require additional documents.Depending on whether you’re applying as an individual or you’re setting up a company with shareholders you may need:
- Copy of valid passport
- Emirates ID (if applicable)
- UAE Residence Visa details (if applicable)
- Proposed business name
- Products or services you wish to sell
- Shareholders
- Completed licence application forms
- Office/workspace documents (if required)
If your new business is to be owned by another company you may also need their documents showing they’re registered and owned by.Always check what documents are required to avoid any delays.
How to Get an E-Commerce Licence in Dubai
Getting started with an online business in Dubai means following a few key steps.
Step 1: Decide What You Will Sell
Decide what you will be selling.
Depending on what you are selling (clothing vs food, cosmetic and medical goods) there may be extra regulations for certain items.Ensure your licence covers any activity you want to do.
Step 2: Mainland or Free Zone?
Decide where most of your customers are and how you will get your products to them.
If you plan on providing services to customers throughout the UAE then a mainland business may be suitable.
Alternatively if you are mainly providing services to international customers, then you may wish to consider a free zone.Consider the costs and trading rights of both.
Step 3: Choose a Company Name
Decide what name you would like to use for your online business.
Your name must comply with the rules set by the licensing authority and cannot be used by another company within the same category.You will be able to reserve your name once approved.
Step 4: Apply for Your Licence
Ensure your documents are in order and submit them to the licensing authority.
Depending on your type of business you may need approval from another governing department.Ensure you know if you need a no objection certificate from the Telecommunications and Digital Government Regulatory Authority (TDRA) for your online activity.
Step 5: Pay Fees
Once approved, you will need to pay any relevant government and registration fees.
Once your licence has been granted you can get started with the rest of your business setup.
Step 6: Set Up Banking and Other Services
You may need to set up banking, payment gateway, residence visa, delivery partner and/or storage.These are normally set up separately from your trade licence.
Are There Any Additional Costs Involved?
Yes. Whilst you will have the cost of the licence to pay, depending on the setup you may also have:
Costs associated with the registration of your company, office space, visas, Emirates ID processing and health insurance.
Costs involved in setting up your business.
If you are setting up an online clothing shop, you will need a website, products, packaging and delivery.
If you are importing products from another country you may have customs and shipping costs.Also ensure you factor in the licence annual renewal.
It is best to know what you will be paying before you start.
Do I Have to Pay Tax on My E-Commerce Business in Dubai?
Yes. All online businesses in Dubai must comply with UAE tax rules relating to their business.There are two main types of tax to consider.
Corporate Tax
Generally income up to AED 375,000 will be taxed at 0% under the standard corporate tax rules.Any income exceeding AED 375,000 will generally be taxed at 9%.
Certain free zones may offer different treatment if they meet the criteria.
Just because you have a free zone licence does not mean you will not have to pay corporate tax.
VAT
The standard rate of VAT in the UAE is 5%.If your taxable supplies, imports or both are over AED 375,000 you will generally need to register for VAT.
You may also be eligible to voluntarily register for VAT if certain criteria are met.
Ensure you have good accounting in place and check with the Federal Tax Authority to see if you need to register.
Can I Open a Business Bank Account with an E-Commerce Licence?
Yes. As long as you have a well set up mainland or free zone company you can apply for a corporate bank account in the UAE.However just because you have a licence doesn’t mean you will automatically be approved.
Banks will generally want to know more about your business, where your funds are coming from and how you intend to run your business.They may ask for your trade licence, shareholder documents, business website, supplier information and expected transaction information.Some banks may ask for further documents.
Having all the information set up clearly can help.
Common Mistakes to Avoid
Choosing the licence with the cheapest price.This may not include all the services you need.Choosing a business activity that doesn’t cover what you want to sell.Assuming all free zone companies can trade on the mainland.
Remember you may still need to set up banking, complete tax registration, ensure your products meet the requirements and pay an annual licence fee.Getting this information in advance can help save you any unnecessary delays or costs.
Is Dubai a Good Place to Start an E-Commerce Business?
Dubai can be a great place to start an online business, especially if you wish to target customers within the UAE or internationally.There are excellent transport links, delivery companies, digital payment methods and access to regional markets.In addition there are a number of different business licences available.
However you will need to make sure that you have:
Products that people will want to purchase. Reliable suppliers. A clear delivery process. Sufficient funds to cover your costs.A good place to start is by choosing the correct type of business licence.
FAQs
Can I set up an E Commerce Company in Dubai as a foreigner?
Yes, there are several options available to foreigners looking to set up an e-commerce company in Dubai. There are many business activities available which are fully foreign owned. However there are also certain business activities which will come into play. It is important to ensure that whatever business activity you wish to undertake, whatever licensing body you are using and the ownership criteria is correct. There are also additional criteria for those wishing to obtain an eTrader licence.
Do I need an office for my E-Commerce License?
Not all e-commerce businesses require an office. Certain free zone options will include shared office space or flexible desk packages. Those wishing to obtain an eTrader licence may also be able to run their company from home. Generally speaking, standard companies will need a suitable address to register. This will depend on what type of company you are setting up, what business activities you have and how many visas you will need. We recommend checking what criteria you will need.
Can I sell on Amazon UAE?
If your business is correctly licensed you may be able to. You must ensure that your licence includes selling the products you wish to sell on Amazon. Depending on your business structure and fulfilment, you may need additional permissions to import goods and trade in the mainland. This does not mean you can use Amazon as a replacement for legally licensing your business.
Can I Obtain a Residence Visa?
Certain mainlands and free zone packages will allow business owners to apply for UAE Residence Visas. Whether or not you are eligible will depend on what licence you have, the company setup and approval from the immigration authorities. Certain packages do not include a visa and additional fees may be payable. You should not assume that an eTrader licence will include residence visa sponsorships. We recommend confirming what options are available.
How long will it take to get my E-Commerce Licence?
This will depend on what licensing body you are using, what business activity you are undertaking and the documents you have. Some licences can be processed very quickly, however some will take longer due to additional approvals and checks. Setting up a business bank account and applying for a residence visa will be an additional process. We recommend asking for an approximate time frame for your specific business.
Get started with your E-Commerce Business in Dubai with LBMS
Obtaining an E-Commerce licence in Dubai does not have to be complicated. The main thing to consider is ensuring you have the right licence for your products, customers and business.
We at LBMS (Libra Business Management Services) can help entrepreneurs understand what options they have for their company.
Our team can assist with registering your business in the mainland or free zone, preparing licence documentation, government processes, visa applications and preparing for corporate banking.
Whether you want to start a small online shop or expand your current e commerce business we can help you understand what is required and what the costs will be.
