How To Start an Online Business in Dubai?

How To Start an Online Business in Dubai?

Online businesses are need of the hour worldwide, and it’s not hard to see why. Convenience and accessibility have made eCommerce a global demand.

However, here in the UAE, the country combines even more possibilities, unique opportunities, and benefits of starting an online business with unprecedented growth.

So, if you’re considering setting up your online business, Dubai, in the heart of the UAE, has experienced a remarkable surge in online commerce. Thanks to the growing online commodities and eCommerce platforms, startups in Dubai enjoy an increased boom and offer advantages that can help you succeed.

In fact, more than 73% of online shoppers in the entire GCC region live in Dubai. That’s simply because 90% of Dubai’s population has access to 24/7 high-speed internet connection,? smartphones, laptops, and the financial means to spend online.

With such a massive audience pool at the fingertips, one can start business operations in the GCC eCommerce leader. The best part? You don’t need a physical storefront or office space to establish your online business in Dubai.

For anyone wondering how to start an online business in Dubai, you’re in the right place. Breaking into the big business of UAE eCommerce – is entirely possible with

  • A market worth USD 10 billion+
  • Millions of online shoppers every day
  • Minimal bureaucracy and 0% tax rate on offer
  • The flexibility of running your business from anywhere in the world

But, like any venture, success begins with the right guidance. All you need is a business license and a product people will want to buy. So, if you’re eager to tap into this lucrative marketplace, continue reading.? Here is everything you need to know before you get started.

What are the 6 Steps To Start an Online Business in Dubai?

Starting an online business in Dubai may seem challenging, but with the right guidance, you can ease the process and start selling within days.

This comprehensive guide will walk you through step-by-step 6 key milestones that you could start trading within a few days.

1. Finalize Your Business Activities

The first step in setting online business in the UAE is finalizing the activities you wish to carry out. However, it is also important that your business practices align with the list of permitted activities.

As of Dubai Economic Development (DED), there’s a list of 2000 permissible business activities to avoid any future hiccups. So, as a business owner, you’re bound to:

  • Analyze your products
  • Find the ones that match up the best
  • List down the activities with the business requirements
  • Make sure to double-check your list before sending it to the concerned department.

In case you can’t find any desired activity mentioned, you can apply for additional external approvals to gain permission to conduct other business activities.

But why choosing the right business activity is important?

Before applying for an eCommerce license, you must understand the type of business model you plan to execute. Your eCommerce license will be valid on the business activity you plan to conduct.

For example, one can go for e-commerce, e-trading, or selling via the Internet.

  • Let’s say you plan to sell products online through social media platforms; an e-trader license is your way.
  • You may get a portal license if you want to serve as an intermediary between buyers and sellers through an eCommerce marketplace.
  • Or if you’re importing products from overseas and selling them online within Dubai, you need a commercial license for customs clearance.

These activities are going to be listed on your license application. As this early part of the process is completed, you can ease your application for your eCommerce license.

2. Select a Trading Name of Your Company

What will be the name of your online business? Have you prepared a list of the names, or do you need to create one?

Although anyone outside the Emirates region is not familiar with the naming convention, many overlook it. However, the UAE has a strict set of naming parameters to which you’ll need to stick.

But don’t worry. All are straightforward and of largely common sense.

When finalizing your company’s name, ensure you follow all the conventional naming guidelines by the UAE government.

  • Avoid blasphemous
  • No offensive language or profanity
  • Nor any references to any religion
  • No use of political or sectarian terms
  • Never use derogatory terms in any sense
  • Don’t use names owned by well-known organizations
  • Controversial, insulting, or defaming words are prohibited

If you wish to name your company after your name, you must use your full name rather than surnames or name initials.

Lastly, you must take the time to research existing trademarks and check that your chosen domain name is available to register to avoid any legal complications down the road.

3. Choose the Right Location For Your Online Business in Dubai

Where do you wish to set up your online business in Dubai? Either in the mainland or a free zone in the Emirates.

So, when deciding on the most suitable jurisdiction for your online business in the UAE, there are two options to choose from and get access to the local market.

1. Dubai Free Zone

Setting up your business in a UAE-free zone is often the best approach if you want to keep enjoying:

  • Limited Liability Company (LLC)
  • Full ownership of your business
  • 100% repatriation of profits
  • No currency restrictions
  • Custom tax exemption
  • Zero percent tax rate
  • Low startup costs

2. Mainland Setup

If, however, you set up on the Mainland, it offers access to trade directly with the entire local UAE market. However, you’ll require a local sponsor or partner, and there may be restrictions on certain business activities.

You are free local UAE market without working with a local agent and can take on government contracts. However, your business cannot be established as a Limited Liability Company (LLC).

Each location you choose has specific roles and benefits in your business success, so research the one that suits your business model thoroughly.

Dubai Free Zone Dubai Mainland

Also referred to as free trade zones. Also referred to as onshore.

Activities within the free zone boundaries All across UAE and international markets

No customs duties or taxes Licensed by the Department of Economic Development (DED)

No agent requiring No employee visa quota

Cannot trade with the local UAE market Trade directly without a working agent

Company setup on virtual office Physical offices

4. Apply For an Online Business License in Dubai

Like any other business, online business in Dubai requires a valid license. So once you’ve laid the groundwork of the business setup

  • Defining your business activity
  • Selecting the company name and
  • Choosing the right location for your online business in Dubai

The next step is to apply for a business license in the concerned departments of each zone. This license is your passport to conduct business legally and confidently.

But your first question might be: where do I apply for the license in my chosen location? And what specific license type do I need for my business?

Now, let’s get into the specifics. The type of online business license you will need depends on whether you’ve opted for the Dubai Mainland or a Free Zone and the nature of your business activities.

  • E-trader License is convenient for UAE and GCC aspiring online entrepreneurs residing in Dubai. You’re free to conduct your business online without needing physical office space and sell your products and services through social media.
  • Portal License is open for all non-UAE nationals, which also enables you to launch and operate your online business. Similar to an e-trader license, you can promote your business and sell your products via online marketplaces in Dubai.
  • Virtual Company License is the best option for investors and expatriates interested in establishing their business remotely in the UAE. However, it’s important to note that this license is limited to specific business activities, like designing, programming, and advertising.

After choosing a suitable business, you must apply for an e-commerce license in Dubai.

  • In the Dubai Mainland region, you must submit your license application to the Department of Economic Development (DED) in the specific emirate you wish to set up.
  • However, if you prefer to establish your business in a Freezone location, you can apply directly to the Freezone authority of your choice.

As you secure your online business license, it’s crucial to be well-prepared. The application process requires attention to detail, as inaccuracies can lead to delays. In both cases, you will be required to submit some key documentation:

  • Passport copies
  • Along with your completed application form
  • Memorandum of Association (MOA) (if you pick mainland)

5. Build Your Professional Website

To truly make a name for your business, a strong online presence is a must.

Therefore, hosting an optimized business website should be one of your top priorities to drive organic traffic to your online portal and increase the chances of scoring more checkouts. It is always recommended to choose a trusted hosting partner for your website.

A lot goes into creating a professional website, and you’ll need to keep an eye on the following:

  • Website loading speed
  • Easy user navigation
  • Ongoing maintenance
  • Mobile Optimization
  • High-quality images
  • Converting copywriting
  • Flexible payment gateway

If you don’t have a massive budget for a custom-built website, there is a budget-friendly approach. At the initial stage, you can opt for a good premade theme, which is cost-effective and can be customized to suit your brand. These themes often offer a professional look and essential features to establish your online presence without breaking the bank.

Also Read:

How Much Does a Website Design Cost in Dubai, UAE?

6. Application To Acquire Visas

Among the many benefits of doing an online business in Dubai is you do not require office space, nor do you need to reside in the UAE. Having a legal address is enough to conduct your business operations remotely.

However, to work and reside in Dubai visa application, the UAE visa step is essential.

So, if you wish to relocate here and plan to actively participate in your online business, you will need to apply for the relevant visa, and that also without having a physical office in Dubai.

But if you decide to take on any employees and think, how many visas can I provide under an eCommerce license?

The number of visa applications will depend on the size of your business and, once again, where you choose to set up. When applying for visas for dependants – such as domestic staff or your family members, spouse, or children – the process is equally straightforward, providing you meet the eligibility criteria.

You can get up to 3 years of a valid visa, after which it should be renewed every year.

7. Open a Bank Account in Dubai

Lastly, you cannot start operating and getting paid in the UAE without having a business UAE bank account.

So, if you’re successfully done with getting your license and visa steps, the first thing you should do is open a corporate bank account in any of the reliable local and international banks in the UAE. As for using a local bank, you need a local trade license.

However, the process of opening your bank account is simple. All you really need to do is pick your preferred bank and submit the following documents:

  • Business License
  • Passport copy
  • Emirates ID
  • Visa copy

In addition, ensure that the selected bank offers A-grade banking facilities, end-to-end account assistance, and long-term benefits for your e-venture.

Cost of Starting an Online Business in Dubai

So how much does starting an online business in Dubai cost without any business setup companies? Is it a one-time payment a year?

One of the essential considerations when launching an online business in Dubai is the cost involved. While the exact figures can vary significantly based on your specific needs and preferences, let’s break down the key factors influencing the total cost.

Factors That Influence the Cost

The total cost of starting an online business in Dubai, UAE is dependent on a range of factors. These include:

1. Business Size: The size and scope of your online business play a significant role in determining the cost. Larger businesses with more extensive operations may incur higher expenses.

2. Number of Visas: If you plan to hire staff or require multiple visas for your business, this will add to the overall cost. Visa fees can vary depending on the type and duration.

3. Office Space: Whether you need physical office space as part of your business setup can also impact costs. Some setups include office space, while others do not.

4. Location Choice: Your decision to establish your business in a Free Zone or the Dubai Mainland can have a significant cost difference. Free Zones often offer cost-effective solutions for startups.

To provide a rough estimate, you can anticipate a starting cost ranging from AED 5,500 to AED 50,000 or more, depending on your specific requirements. For instance, a general portal license can typically be obtained for around AED 12,000.

Additional fees may apply if you require exclusive business privileges or if you wish to use a foreign trading name. These costs are essential to factor in when planning your budget.

What is the Cost-Efficient Approach?

If you’re keen on keeping your startup costs manageable, opting for a Free Zone setup is often a prudent choice. Free Zones offer several benefits, including reduced setup costs, 100% foreign ownership, and simplified administrative processes.

However, it’s important to note that while Free Zones can offer cost savings, they come with specific regulations and restrictions that may not be suitable for all business types. Careful consideration of your business model and goals is crucial in making the right choice.

Documents Required For Starting an Online Business in Dubai

Establishing your online business in Dubai requires more than just a great idea and a website.

To ensure a smooth setup process and obtain your business license, you’ll need to prepare and submit various legal documents to the relevant governing body.

Here’s a curated list of the essential documents you must have in order:

  • Passport copies of shareholders, investors, partners, and company directors
  • Passport copy of the local sponsor (if any)
  • Trade Name (At least 3 name choices)
  • Colored passport-size photograph
  • Proof of residential address
  • A copy of your Emirate ID
  • Entry stamp or Visa page
  • Well-structured business plan
  • Completed application form of registration from DED
  • Attested tenancy agreement for the office premises (in the case of physical office)
  • Attested Memorandum of Association (MOA) from public notary (for mainland-based)
  • NOC (No Objection Certificate) from your sponsor or local partner working in a UAE company (in the case of the Mainland region)

Ensure that all your paperwork and documents are complete to avoid any risk of delays or complications in the licensing process.

Or simply, you can contact any reliable company formation specialist in Dubai. These professionals have the expertise and experience to guide you through each step and ensure an error-free process.

Final Thoughts

All in all, starting an online business in Dubai brings endless opportunities for aspiring entrepreneurs. The booming online marketplace in Dubai is fueled by a tech-savvy population and a business-friendly environment.

From selecting your business activities to choosing the right license, from building a professional website to understanding the essential documents, the blog has touched on the intricate steps of your online business.

However, the cost considerations, coupled with the choice between Free Zones and the mainland, provide valuable insights for a strategic setup.

With the knowledge gained here, you’re about to take the leap into setting up your online business in Dubai.

Hope you enjoyed reading the blog; now, it’s time to turn your aspirations into action. Your entrepreneurial journey is about to take off!


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