Starting up an e-commerce business in Dubai

Which of you has bought an item with Amazon? There are lots of people that purchase different items on line, nowadays. Buying on line, has become very popular. Therefore, business makers have thought to start business in the E-Commerce sector.
Among the main on line platforms, Amazon is the most important one. In fact, everybody knows it. But in Dubai the most popular on line platform is SOUQ.COM and Amazon has recently acquired it to expand its business in the Emirates.

E-Commerce in Dubai is a rapidly growing sector, which offers a lot of opportunities to investors and entrepreneurs. According to estimates, the E-Commerce market is expected to reach $20 billion in 2020 in the GCC area.
In this post we explain how to open a firm which deals with E-Commerce sales. To open an on line business in the United Arab Emirates, first of all you need to get a licence.

The Emirates have recently opened a new free zone addressed to whom intends to start up a shopping on line business. The new Free Zone is called Dubai Commercity. This is not the only one which allows a licence to open an e-commerce activity. In particular, there are also other free zones like Fujairah where different activities are permitted, one of these is the e-commerce.
Here we explain the difference between the main free zones and how to choose the right one which meets your needs and requirements.
In some free zones it is necessary, when you start-up an activity to:

  • deposit the share capital to a bank
  • have an office (it is compulsory)
  • have a resident visa (compulsory)
  • bear the cost for the licence

There are other free zones, like Fujairah, where there are no restrictions. You can open your company with no need to:

  • deposit a share capital,
  • have a physical office,
  • hire employees

Of course, is more convenient to opening a company in Fujairah, where there are a lot advantages to start up a company. But why there are some people that invest a lot of money in the more expensive free zones?
The choice depends on the model of business and logistics. There are two distinctions to be made:
If you import goods and are in transit or produced in the Emirates, you need to have a physical office, a deposit where to store the goods to be sold in the world’s countries and a custom code. In this case you have to open the activity in the more expensive Free Zones.

If goods are produced abroad, for instance China, and sold in Brazil, you do not need a physical office, and a store. In this case, you can open an online activity in Fujairah Free Zone and rely on Amazon platform and its logistics, such as the management of the orders and the invoicing. Your office will be not physical but a virtual one.
UAE’s E-Commerce sector is destined to grow due mainly to the young population in the region, with high penetration rates of internet and a massive use of smart mobile phones.

When you open your online shopping activity in the Emirates, you have to be sure that your website is optimized to smartphones, so that the people can easily access and order the goods.
If you have a company in a free zone like Fujairah where it is possible to have a virtual office, do not forget that you must be a resident in the UAE to carry out your activities.
If not, you commit a crime against the law in force in your home country.

For more information, contact:

E Commerce

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