Are you planning to start an e-commerce business in the UAE? Then the best time to start an online business in the UAE is ‘now’. The trend of e-commerce or online shopping is no news anymore.
Like all other countries, e-commerce is booming in the UAE and online shopping has been adopted by hundreds of thousands of consumers. A greater percentage of people are trying online shopping mode instead of conventional shopping, which in turn increases the success rate of e-commerce in the Middle Eastern region. With the increased number of e-commerce consumers, a large number of people who are doing business in UAE embrace e-commerce or online shopping to sell their products or services at its maximum in a very viable manner.
E-commerce Business in UAE
The e-commerce market in the UAE is as lucrative as any other countries. Since more than 90% of the population has internet access, the opportunities for e-commerce growth is also higher. However, the e-commerce business is subject to tax treatment, legal formalities, logistics concerns, and several other factors. So, if you are planning to register an e-commerce business in the UAE, you must understand the essential procedures, right from the e-commerce website building to obtaining an approved e-commerce license to find the best logistics service and many more.
Setting Up an E-commerce Business in UAE
The fundamental levels to set up an e-commerce business in the UAE generally involve steps such as determining the legal structure of the business, starting as an LLC (Limited Liability Company) or Foreign Branch, or an Establishment, establishing your business in a Free Zone or On-Shore, registering a Trade Name, setting up a business bank account, applying for a Commercial License etc.
Read on to know more about the processes involved in setting up an e-commerce business in UAE:
E-commerce Business License
To set up an e-commerce business in the UAE you need to obtain a license issued by the Department of Economic Development UAE. If you are planning to set up your online business in a Free Zone in UAE, then the license, which provides 100% ownership to the investor will be granted by the Free Zone Authority of that area. The three main types of licenses include:
- Industrial license
- Commercial license
- Professional license
It is for this licensing process, you need to determine the legal structure of your business, strategic location, registration, and finally, submitting the application to the Department of Economic Development UAE or the Free Zone Authority UAE for the approval.
E-commerce Business Location
By choosing an e-commerce business location, you are deciding on where you want to get your e-commerce license. In certain setups, you might require the help of a local sponsor or UAE resident to help you acquire a place. In special cases, foreign nationals are not permitted to buy a property. Dubai has two zones- Free Zone with 100% repatriation of business profits,0% income tax, 0% corporate tax, complete business ownership; and Mainland business, where you need to have a local sponsor whose ownership in the business should be at least 51%. The remaining 49% would be your share. While starting your business, you need to consider all these factors pertaining to the business location for a successful venture.
Trade Name Registration
Choosing a Trade name for your business is important for setting up an e-commerce business in the UAE. The trade name you selected can be used as your domain name so that consumers can easily find your business online. Ensure that your website domain name does not resemble any other existing business as it may create legal complications.
if you are one of the leading VAT consultants in town and have a distinctive trademark, then your clients will have a clear perception of whom they are dealing with and will have minimal chances of looking for alternatives.
Domain Hosting and Website development
Domain hosting and website development is another crucial step in starting an e-commerce business. A stable website that has excellent user interface is what you need to conduct your online shopping business to provide better consumer experience. Website development involves several important factors such as registering a domain name, hosting, choosing the best web developer, etc. A Domain name is usually the name that you will use to register your business. Better choose a unique yet easy to remember domain name that is not taken up already.
Payment Gateway Integration
Integration of payment gateway is the next major step for implementing a successful e-commerce business. You may find a lot of online payment gateway vendors in the market; always ensure the stability and the transaction success rate of the payment gateway you choose. The financial transactions can be done with the integrated payment gateways where the vendor may bill you per transaction. A reliable and well-built payment gateway will definitely increase the success rate of overall transactions of your website.
Product Import and Export
You may need to sell different types of products such as branded, unbranded, digital, consumer goods, etc. Import and export is a key aspect in every trade depending upon the business activity you are following. For that, you require a relevant license to conduct your business. If you are importing goods from outside the UAE and selling them in the UAE market, then your business should be registered with the appropriate Emirate’s ports and customs authority and must receive an importer’s code. You are entitled to pay a certain percentage as customs duty for the imported goods. If your business is established in a free zone and is selling the products/services outside UAE or within the country Free Zone, then you’re excluded from customs duties. Nevertheless, if the products are sold in the UAE market, outside the free zone, a local commercial agent has to be appointed and the customs duty should also be paid.
While setting up your e-commerce business in the UAE, you can either build your own logistics or choose a third-party logistics support partner to assist your business delivery and dealings in the best possible way. Considering your business expenditure, you can decide whether to opt for own logistics support or to outsource your logistics support to a third party.
Warehouse and Storage
Warehousing and storage are relevant in case you are handling the business of consumer goods. Just like logistics, you can either own a warehouse of your own or obtain space from a third-party warehouse team.
E-commerce Business Launch and Marketing
Once your e-commerce business is successfully launched, you have to focus on the marketing aspect also to keep aligned with the interests of the consumers, for whom the business is focused. Customer retention is also very important in successfully maintaining consumers on a profitable rate. Digital marketing companies in UAE can be of help to grow your business by attracting targeted customers and providing a better Return of Investments (ROI) than traditional marketing channels.
E-commerce Website Development Companies in the UAE
With the fast-growing popularity of online shopping, demand for online stores in the Emirates also increased and this lead to the quick emergence of e-commerce website development companies. Hence choosing the best ecommerce development company in UAE will be a pretty difficult task for those who are new to this. If you are planning to hire developers for creating an e-commerce website that fulfills spares business requirements and budget, spare a couple of hours to do some online research. Always, make sure that the development team you find uses the latest technologies and is capable enough to complete the project in the time frame.
So, you have decided to start an online business in the UAE and fixed a team to develop your website? Now, do check their portfolio, development process, experience, payment policy, and other related aspects to ensure you are hiring the best e-commerce website developer for your business.