Want to set up an online business in the UAE? Here’s how to get an eCommerce licence
Whether you are selling jewellery, crafts or services online, you would need this licence
Dubai: If you are thinking of starting your own online business, there is some good news. The UAE is one of the largest markets globally for ecommerce at the moment, with 99 per cent of the population being active internet users.
This year alone, eCommerce is expected to generate a revenue of more than $6.7 billion (Dh24.6 billion) in the UAE, with projections from specialist data provider eCommerceDB, expecting revenue to go up to $9.3 billion (Dh34.15 billion) by 2028.
If you, too, want to take advantage of this growing industry, here’s how you can get your eCommerce licence.
When do I need to apply for an eCommerce licence?
Whether you want to sell physical products or professional services like marketing or business consultancy through an online platform, you would need to get an eCommerce licence. This needs to be applied for whether you are using a website or even a social media platform to conduct the business, as per the UAE’s eCommerce law.
The law legalises trade conducted through such means of modern technology, making it similar to trade carried out through traditional methods and conventional procedures.
Criteria for eCommerce traders
• Digital traders are permitted to sell only goods and services that are legally approved for trade in the UAE. They must refrain from selling any goods or services that require special approval from the competent authority, until such approvals are obtained.
• They must comply with the conditions and requirements stipulated by competent authorities regarding promotional and marketing campaigns, as well as the sharing of customer data.
• They must avoid engaging in deceptive practices or providing false information regarding goods or services.
• They are also obligated to provide customers with detailed digital invoices for purchases made through technological means.
The law also sets provisions for protection of consumer rights, return of goods and services, digital payment gateways and settlement of disputes.
Where can I apply for an eCommerce licence?
To get an eCommerce licence, you would need to reach out to either the economic department of the the emirate where you want to open up a business, or one of the many free zones in the UAE that offer eCommerce licences. Some of the eCommerce licence options in the UAE include licences from:
• Dubai CommerCity (DCC) free zone
• EZDubai in Dubai South
• Ras Al Khaimah Economic Zone (RAKEZ)
• Sharjah Publishing City
• The eCommerce licence (Tajer Abu Dhabi)
Launched in 2017, Tajer Abu Dhabi was restricted only to UAE nationals for 100 business activities that didn’t need a physical presence.
In 2018, ADDED expanded the licence package to include all GCC nationals and UAE residents under three legal forms:
- Establishment for Emiratis and GCC nationals
- One-person company for Emiratis and GCC nationals
- Limited liability company for residents in partnership with Emiratis
• DED Trader Licence from Dubai
The eTrader licence from Dubai Economy and Tourism (DET) allows UAE nationals and GCC nationals residing in Dubai to practise business activities through various social media networks.
• Eitimad domestic licence from Sharjah
Sharjah Department of Economic Development (SEDD) grants Eitimad licence for home-based businesses and electronic business, which run through social networks. The license is available for ages 18 and above. The licence is restricted to UAE nationals residing in the emirate of Sharjah.
How much does an eCommerce licence cost?
The costs for an eCommerce licence can vary depending on the free zone or economic department you choose. While packages can start from approximately Dh6,000 per year, the cost would rise if you are also applying for a residence visa and need an office space. You can get a free consultation from the many business set up consultants that operate in the UAE, to find out which would be the best jurisdiction to operate from, based on your needs.
Many free zones also offer a bank account set up as part of the package, which can make it easier for you to set up payment options for your clients.
What is the process for application?
Regardless of which jurisdiction you choose – mainland (through an economic department) or free zone – you would need to provide certain documents to start your licence application process:
1. Passport copy
2. Emirates ID copy (if you already have a UAE visa)
3. Passport-sized photograph
4. Details of your company name and business plan
5. Application form with Ultimate Beneficial Owner (UBO) information. This is required for financial compliance of companies in the UAE and the economic department or free zone will assist you with completing this process.
6. If you are setting up an ecommerce company with corporate shareholders, you would need to provide their identification documents as well, along with the Memorandum and Articles of Association (MOA)
Apply for a TDRA certificate
You would also need to apply for a no-objection certificate (NoC) from the Telecommunications and Digital Government Regulatory Authority (TDRA) for practicing an e-activity. The process is fairly straightforward and you will need your UAE Pass to apply for the NOC online, here: https://tdra.gov.ae/en/services/noc-for-practicing-e-activity
The NoC is free of cost and the expected processing time is two working days.