Starting up an e-commerce business in Dubai

July 20, 2024

Which of you has bought an item with Amazon? There are lots of people who purchase different items online nowadays. Buying online has become very popular. Therefore, business makers have thought to start business in the E-Commerce sector.
Among the main online platforms, Amazon is the most important one. Everybody knows it. But in Dubai the most popular online 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 reached $20 billion in 2020 in the GCC area.
In this post, we explain how to open a firm that deals with E-Commerce sales. To open an online business in the United Arab Emirates, first of all, you need to get a license.

The Emirates has recently opened a new free zone addressed to those who intend to start up a shopping business. The new Free Zone is called Dubai Commerce. This is not the only one that allows a license 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 e-commerce.
Here we explain the difference between the main free zones and how to choose the right one that 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 of the license

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, it is more convenient to open a company in Fujairah, where there are a lot of advantages to start up a company. But why are there some people who 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 that 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, in 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 the Fujairah Free Zone and rely on the 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 the internet and 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 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.

Starting an e-commerce business in Dubai offers unparalleled opportunities, thanks to its strategic location, robust infrastructure, and favorable regulations. Embrace the dynamic market and let Dubai’s thriving ecosystem be the launchpad for your venture. With the right guidance and a clear strategy, you can capitalize on this vibrant marketplace and achieve remarkable success. Start your journey today with Setup Dubai Business and watch your e-commerce dream come to life in the heart of innovation.