Setting up an online business in Dubai is undoubtedly a great business idea.
However, it is important to consider all the aspect involved in online business in Dubai as well as a traditional business, and what works best for you.
Before we get into analysing online business in Dubai and compare it with traditional business procedures, let’s understand the set-up.
Procedures for starting an online business in Dubai:
From designating the type of business activity to sorting the proprietorship in the company; from determining the legal form of business to trade name, local support and employees – most of the process of company registration for an online business in Dubai is similar to traditional business setups.
The process to start an online business in Dubai
- Pick options for trade name
- Finalize the business activity
- Passport copies of the shareholders
- Entry stamp or visa page if on visit visa
- Passport size coloured photographs
- Tenancy contract of the office/shop.
Licensing an online business in Dubai
Be it a traditional trading company or an online trading/e-commerce business in Dubai, it must be licensed by the Department of Economic Development in Dubai (DED).
The DED offers a portal licence to entities solely willing to focus on online commercial mediums. The type of portal licence in Dubai issued to the entities depends on the nature of the online business conducted.
So, how different is it to start an online business compared to a traditional trading business in Dubai?
Is it better to get a trading licence and not a portal licence in Dubai?
If you are a blogger, new website or an informative portal you can apply for a Social Media Licence or a Non-Commercial Information Services Licence. Also, if you are limited to only selling others manufactured products, services or are listing promotion, then an online business/portal licence in Dubai would be the perfect option. But, if you plan to start an online business to sell your own manufactured, installed, imported or exported goods a portal license will not suffice. The DED does not allow trading of your own products unless you have a trading licence.
Cost of a trading license compared to portal licence in Dubai
Getting a trading licence in Dubai does generally cost a little more than a portal licence. Trading licences certainly have more business opportunities, in comparison to a portal licence, hence they cost a fraction more. With trading licences, you have a border scope as it permits business offline, as well as online, in the UAE. However, it depends on business to business, as each activity has different requirements.
Renting an office or a commercial place for a portal licence
Starting an online business in Dubai means you don’t need a large office space, which helps you to cut costs. You might not need an office at all. As per the DED standards, you at least need to have a flexi desk or a smart desk to get the portal licence in Dubai. This need is the same for commercial or professional trading licences in Dubai.
What are the legalities for an e-commerce business in Dubai?
Online businesses in Dubai are a well-regulated branch of commerce in Dubai. DED strives to create a secure business environment, so the same amount of legalities are involved, be it an online business or a traditional business. Online services such as freelancing also need permissions, paperwork, and taxation policies are also applied.
Is it worth starting an online business in Dubai?
There is no doubt that online business in Dubai can open many avenues for any type of company. Even traditional businesses are making sure that they have an online presence in the Dubai market. With an online business, you can create a multi-dimensional market for your business. However, it is important to understand the need of your business activity and the practicality of the business in the region.
If you would like to only offer services or want to promote offers online, then a portal licence in Dubai is the best and most cost-effective option. Also, if you would like to act as a meditator for buyers and sellers, online business or portal licence is ideal for you. But if you plan to sell your products online, as well as offline, then a trading licence in Dubai is must.
Finally, understand your requirements and the feasibility of your business activity in the region.
Find out more about offline and online business set up in Dubai. Whether you need a portal licence or a trading licence. Talk to experts from Shuraa Business Setup, who will help you analyse your business and guide you on what works best for your company.