Over the past decade, the UAE has made significant leaps and bounds in online business due to various factors like better transportation and logistics infrastructure, and established technology penetration, with smartphone usage being the highest worldwide.
As a global business hub, international tax haven, and home to the greatest human-made wonders, Dubai is considered the crown jewel of the UAE as one of the best places to start a business that investors can have. While many companies are ready to invest in their venture and open up office space in Dubai, the world of e-commerce, although still in its infancy, is booming and is challenging traditional retail structures. A recent study found that more than 72% of shoppers in the UAE have switched from their traditional physical stores to online shopping websites in the last three years.
The UAE is thriving in the e-commerce market as people are more aware of online purchases and e-transactions than their everyday purchases. Online shopping was once comfortable and luxurious – it’s now a necessity.
With the advancement of the digital age, everything from day-to-day shopping to cash payments has shifted to an online platform capable of providing all the services you need in a more straightforward and friendlier way like a retail store.
How and Why To start An E-commerce Company in UAE?
For maximum revenue, the company invests its capital in building an online presence in the UAE market. While traditional shopping regimes such as brick and mortar stores are still evolving, online shopping environments complement sales capacity by expanding service areas to meet current customer demands, bringing unemployed online customers to conversion sites.
Set Business Plan
When your research is complete, this is a great time to start putting together your business plan. Your business plan will become a blueprint that will help put your ideas and thoughts together. A proper and complete business plan is a critical factor in setting priorities and reaching new customers effectively.
Choose Right Business Location
Employers can choose the legal entity of their choice, free zone, or continental zone, depending on the type of business and interests. A continental license gives you the freedom to trade or sell your products and services directly on the local market, whereas a free zone license requires you to work with a local dealer. The free zone license offers several advantages: 0% income tax, 100% repatriation of company profits, 0% corporate tax, full 100% company ownership, and nominal fees.
Register Your Company
Once the investor visa is approved, the next step is to register an e-commerce license in Dubai with DED in Dubai. The permit to issue depends on the type of business and legal form chosen. If the online business is in the service sector, it is preferable to form a continental company. At the same time, import and export trade requires a free zone business license from their respective free zones. Dubai’s licensing process is fast and offers many advantages and incentives for investors, such as B. 100% tax exemption, 100% capital repatriation, and 100% ownership. Apart from establishing the company in the free zone, other licensing procedures are approved and monitored by the DED.
Apply For Commerce License
The licensing process for business setup in Dubai for an e-commerce store is quick and easy. Entrepreneurs can choose which legal entity they want to start an online business and if they wish to work in a free or non-free zone.
Foreign business investors have many advantages of running an e-commerce business in a free zone. The licensing process takes place with the appropriate free zone in which you want to work.
If you prefer a continental e-commerce business, the licensing process is by the Dubai Economy Department. Business setup consultants can help you buy according to your specific needs.
Setup an eCommerce Website and Payment Gateway
As an integral part of the Internet addressing scheme, this element also plays an essential role in digital marketing. Important and properly structured domain names that reflect the brand’s goals should attract users compared to long, poorly chosen domain names. A right domain name creates trust in the company, strengthens its brand identity, increases the mobility of your online presence, and increases the ability to crawl the Google SERP. When creating a domain name, make sure the keywords are relevant and well placed in a combination of 2-3 words or less. Bluehost is an excellent hosting service offering affordable plans for entrepreneurs and SMEs in Dubai.
The online payment gateway is a cashless transaction channel that connects customers with merchants. No e-commerce business is complete without a fast, reliable, and secure online payment gateway that works around the clock. Choosing a reliable payment gateway like PayPal ensures that customer data remains protected from hacking attacks while providing a seamless shopping experience for users.
It would help if you had a secure warehouse to store your physical items. Once the warehouse is ready, you need to create a reliable logistics system that will ensure the safe delivery of products to customers. You can choose third-party logistics or create your own.
Developing a coherent logistics strategy to support business operations effectively is essential for e-commerce. For a company, logistics includes registration at the emirate’s port, customs, transport services, and other relevant government agencies that control the activity. Most taxes are exempt on imported goods with few restrictions for certain products and countries for Freezone company. If sales in the UAE are through a free zone company, local sales agents and customs are required. To better accept this strategy, a new start-up is hiring professional consultants to set up a logistics company in Dubai.
As soon as your business is ready, the next step is to develop a marketing strategy to reach your target customers. Marketing strategy must align with the interests and needs of consumers.
With e-commerce integration, companies can increase their sales by creating online shopping sites while increasing existing sales at traditional stores. The e-commerce business is growing steadily. In particular, in the UAE, there are many eCommerce development companies and hence, the online industry is growing significantly and is expected to generate more income in the coming years.
So if you are thinking of forming an e-commerce business setup in UAE, there is no need to think twice.
It is a great time to start. If you prepare everything in advance, your e-commerce business will skyrocket.