How to Register E-commerce Business In UAE?
“These days, people want to learn before they buy, be educated instead of pitched.” – Brian Clark
The future of e-commerce is bright in the Dubai UAE. Worldwide, online shopping revenues are expected almost double to US$6.54 trillion from 2020 to 2022, and within the rapidly-growing Middle East region, the UAE boasts one of the largest B2C e-commerce markets. Thanks to its over 99% of the population (2020) internet users, the UAE e-commerce market is expected to maintain double-digit growth through to 2022.
If you are looking to register an e-commerce business in the Dubai UAE, here are some key guidance you need to know to Register an e-commerce Business.
Incorporating an e-commerce company in Dubai is easy, but you can’t flout the laws and regulations while doing so. The Dubai authorities do not allow any random person to launch an e-commerce store and start selling products. If you want to set up an online business in Dubai, you have to apply for an trading license. Your business is not considered legal if you do not have a license for it. There is a procedure you need to follow while applying for this license.
Legal Structure for your Business
To obtaining an e-commerce license in Dubai is to decide the legal structure of your business. In simple words, whether to set up an one-person company, partnership company, branch of a parent company, etc. according to required organizational structure.
Choose a Location
Location here does not mean the place where you will set up a shop or an office, but the place from where you want to get your license. Dubai has two types of zones, namely Free Zone, and Mainland. A free zone allows you to have 100% ownership of your company. In the case of the mainland, you need to have a local sponsor whose ownership in the company should be at least 51%, and remaining would be your share. Similarly, both the zones have their share of advantages and disadvantages. You have to consider all the factors and decide where you want to set up your online business.
-Register a Trade Name
-Apply for a License
-Apply for Initial Approval Certificate
-Draft an MOA and Local Service Agent Agreement
-Register a Physical Office in Dubai
-Final Approval of the License
Your business must be registered with one of the ports and customs authorities so that you can receive an importers’ code. UAE imposes 5% customs duty on imported goods. The companies that come under free zone will not have import duty since they have to sell their product/services within the free zones.
Opening a Corporate Bank Account
Once you have successfully applied for an e-commerce trade license and established your business, you will be able to set up your corporate bank account. Since the application process is quick and simple, you just have to look into which bank suits your needs.
We will help you in all above process .
VAT Registration Of an E-Commerce Business
E-commerce refers to business transactions (sales and purchases) that are conducted electronically, as on the Internet.
If a person is supplying goods or services in UAE via the Internet or any other electronic media, he is accountable for the collection of VAT as in traditional commerce. This also applies notwithstanding that the transactions are effected through a third party e-commerce service provider.
The medium through which the transaction occurs does not alter the taxability of the transaction.
All physical goods supplied over the Internet attract VAT if the supplier is a taxable person and the supply is made in UAE. For example, if a taxable person sells goods via the Internet and the goods are delivered locally, he is making a standard-rated supply and VAT is chargeable at 5%.
VAT is a consumption tax imposed at each stage of the supply of goods & services. VAT is payable at every taxable supply and deemed supply made by the taxable person and on the import of concerned goods. However, there are certain supplies that are either zero rated or exempt from VAT as mentioned in the Federal Law no. 7 of the 2017 and the executive regulations thereby. VAT is charged at 5% standard rate or zero rated.
Only a VAT-registered person can charge and collect VAT on all supplies of goods and services made in UAE apart from exempt or zero-rated supplies. The VAT-registered persons need to account and pay the VAT collected to the Federal Tax Authority within 28 days from the end of his tax period.
A person making taxable supplies is required to register himself mandatorily if the value of his supplies reaches AED 3,75,000. He can also get registered voluntarily if the value of supplies reaches AED 1,87,500.
Payment Gateways for your E Commerce Business
Whether you’re advertising merchandise or services, you need to register and open account with one of reputable & Secure payment Gateways. Some of the popular payment gateways are PayPal, PayU, and RazorPay etc.
This might sound expensive for brand spanking new startups; however, you have got to take a position correct time and cash for this life as obtaining it wrong would be harmful to the image of your business.
Number of suppliers and online payment choices are increasing in Dubai. You have got numerous choices to anticipate that one suits your business and falls below your budget.
On time delivery is key to the E-commerce industry for which identifying logistics partner becomes mandatory. Also the cost of logistics should be well-defined to derive costing and profitability of product and services.
Horizon Biz Consultancy Services
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Horizon Biz Consultancy is experienced in e-commerce business setup. Our qualified accountants are experienced working with Amazon, eBay, noon, Stripe, Shopify, Magento and many more popular e-commerce platforms.
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