Rapid growth, fast profits – the UAE e-commerce trading licence is an entrepreneur’s dream

September 27, 2017

Shopping is one of the most popular online activities worldwide.

It should come as no surprise then that e-commerce has become one of the fastest growing global industries in recent years.

E-commerce – essentially the buying and selling of goods and services online – is a huge global business. In 2016, e-commerce sales totalled USD 1.86tr worldwide with revenues expected to reach USD 4.5tr by 2021. Within this vast industry are a large and varied number of sub-sectors, including sales of everything from clothes and food to holidays, vehicles and experiences.

Here in the UAE, the market is just as lucrative. Research by Hootsuite and We Are Social in 2017 found that 62% of the country’s internet users now shop online – spending an average of USD 332 per purchase according to KMPG. In total, the UAE is the largest e-commerce marketplace in the Middle East and is estimated to be worth USD 10bn by 2018 (up from USD 2.5bn in 2015).

In total, the UAE is the largest e-commerce marketplace in the Middle East and is estimated to be worth USD 10bn by 2018 (up from USD 2.5bn in 2015).

E-commerce trading license, Dubai – what you need to know

Naturally any industry growing at this speed offers incredible opportunities to the entrepreneur with the skills and motivation to see success. If this sounds like you, below is everything you need to know about the much-lauded UAE e-commerce trading licence.

1. Operate from anywhere: It’s not just the rapidly growing market that makes the UAE e-commerce trading licence particularly popular right now – it offers entrepreneurs a unique opportunity. As online trading can be conducted from anywhere – provided you have a laptop and internet connection – the UAE e-commerce trading licence allows entrepreneurs to work from wherever in the world they wish, while having a permanent base in the UAE and taking advantage of the favourable tax environment. Simply set up your e-commerce business in a free zone and you’ll benefit from 0% corporate and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption among other benefits. To take full advantage of this perfect set of conditions, establish your business with a local company formation specialist who will also be able to advise on cost effective and respected suppliers in the region who can help you to maximise your profits.

Person starting an ecommerce business in Dubai, UAE2. Super easy setup: Establishing your e-commerce business in the UAE is incredibly easy. If you wish to set up in the mainland, simply apply online directly to the Department of Economic Development (DED). The process is now so simple that – providing you meet the eligibility criteria for a license – you could be registered with the DED within just 90 minutes. Perhaps the most advantageous way to get your UAE e-commerce trading licence, however, is through one of the nation’s many free zones – as they afford you all the tax and ownership benefits listed above. This process is quick and easy too: licences are often issued in as little as two working days and you’ll usually only need a passport copy and few details to get started.

3. Affordable setup: Establishing your e-commerce business in the UAE is not just quick and easy, but affordable too. E-commerce free zone licences start from as little as AED 12,500 and as you can essentially work from anywhere – there’s no need to take on costly physical office space. Plus, as there’s no requirement to provide paid up share capital, total setup costs are incredibly low.

4. Plenty of office space options: While it’s true to say that there’s no need to take on office space, there is a slight caveat: should you require seven or more visas then office space is required. The usual rule of thumb here is 100 sq. ft. of office space per visa – though if you have a large remote workforce, this rule does not usually apply. If, however, your business requires fewer than seven visas, there are plenty of options open. You can opt not to take on an office at all. Another option, if you want to work in the most professional of surroundings, is to apply for a flexi-desk package within a free zone which will give you the use of office services such as desk space, Wi-Fi, call handling and reception cover on an ad-hoc basis.

If you want to work in the most professional of surroundings, applying for a flexi-desk package within a free zone will give you the use of office services such as desk space, Wi-Fi, call handling and reception cover on an ad-hoc basis.

5. Multiple visa options: When setting up your business with your UAE e-commerce trading licence, there are plenty of visa options available. In fact, it is possible to apply for unlimited visas for your employees provided you meet the criteria for office space (as above), if applicable. At the other end of the scale, you can set up your e-commerce business in a UAE free zone while abroad, with no visa in place – and even without requiring a UAE entry stamp.

6. Sponsor dependants for their visas as well: As well as applying for plenty of visas for your employees, should you need them, it’s also very straightforward to sponsor your dependants for their visa applications as well. Whether you require a visa for a spouse, child, maid or driver, the process is four straightforward stages: entry permit, status adjustment, a medical fitness test, then Emirates ID registration and visa stamping. Keep in mind, however, that this process is usually slightly easier for men than women, so as this is such an important process, it’s a good idea to get advice from an expert in setting up UAE free zone businesses – to ensure that before starting an application, both you and those you are hoping to sponsor meet the entry criteria.

7. Set up with multiple shareholders: While you have the option of going it alone with your UAE e-commerce trading licence, you certainly don’t have to. It is possible to establish your business with multiple shareholders – up to a maximum of 50 – which can be either individuals, corporate entities or a combination of the two.

8. Easy to arrange your corporate bank account: Once you’ve successfully applied for your UAE e-commerce trading licence and established your business, you’ll be able to set up your corporate bank account. The application process is quick and simple. If your business is in a free zone, staff can advise on the best bank to suit your needs – and can even arrange meetings in-branch for you. A company formation specialist can also provide the same service – or alternatively, you’re welcome to approach any local or international bank by your own volition.

E-commerce in the UAE – the entrepreneurs dream

I’m sure we’re all familiar with the saying, ‘If it seems too good to be true, it probably is’. Almost anywhere else in the world, I would be inclined to believe this old adage. But not in the UAE. The Emirates – particularly Dubai – often throws up situations that seem far too good to be true – be it the latest opportunities in tech, events, healthcare or here in e-commerce – and yet time and time again it is never the case. The opportunity is always realised.

E-commerce is perhaps even more irresistible than the other industries I mention as it can be undertaken from anywhere in the world with minimal tools – but register your company here and you’ll still get all of the amazing financial and tax benefits of doing business in the UAE. That is what makes this opportunity truly unique.

E-commerce is perhaps even more irresistible than the other industries I mention as it can be undertaken from anywhere in the world with minimal tools.

Don’t be fooled, however, into thinking that because the barriers to enter the UAE e-commerce industry are low, and the potential returns incredibly high, that this is an industry anyone and everyone can wander into by chance. The e-commerce market in the UAE right now is incredibly competitive.

But, this should not worry the business-savvy entrepreneur with the right skillset, passion and drive to see success. Coupled with the right business formation specialist to guide you through the process, the sky is the limit. So the stage is set for hungry business owners to stake their claim in this buzzing industry and potentially become some of the region’s biggest players.

If you think you’ve got what it takes, now is the time to find out.

About the author: Gemma Kennedy, Sales Manager, Virtuzone.
About the author: Gemma Kennedy, Sales Manager, Virtuzone.

As Sales Manager at Virtuzone, Gemma oversees the Company Formation Specialist team, which is responsible for consulting prospective clients interested in setting up a UAE free zone company. Gemma and her team provide all necessary and accurate guidance on the best path to UAE company setup, always delivered on a case-by-case basis for UAE entrepreneurs who are ready to launch their startup businesses. Gemma has extensive sales experience, having worked as a product representative for brands such as Tefal and Vidal Sassoon across New South Wales, Australia. She graduated with a Bachelor of Arts Employment Relations, History and (Hons) Politics at the University of Wollongong Australia, a unique educational mix which empowers her with a socio-political outlook in dealing with a multicultural workforce and client base.