What is an E-commerce License?

The UAE’s e-commerce market is absolutely thriving! If you are wondering why many people are trying to get an e-commerce licence in Dubai, that’s because the UAE e-commerce market’s value skyrocketed to USD 3.9 billion in 2020, which is equal to a 53% year-on-year increase. Market analysts believe this is just the start – and that the UAE’s e-commerce sector will reach a value of USD 8 billion by 2025. That’s more than double its current value in just four years!

With such huge opportunities awaiting aspiring entrepreneurs, it is no wonder that many are looking to set up their own online business and start taking advantage of this huge opportunity – which is probably why you are here.

How to apply for an e-commerce licence in the UAE

The application process for an e-commerce licence may differ for each jurisdiction, but we are giving you an overview so you can get a better idea of the documents you need to prepare and the processes you need to go through.

Step 1: Prepare the following details and documents

 

  •   Company name
  •   Business activity
  •   Copy of your passport or visa/entry stamp
  •   Share ratio
  •   Contact number, email and complete address of all company shareholders
  •   Photos (if required by the free zone)

Step 2: Liaise with your chosen free zone / mainland jurisdiction

  •   Submit the required documents to the free zone or mainland jurisdiction.
  •   Once they have received the documents, your e-commerce licence application will enter the stage of initial approval. In most cases, you have to make a payment to the free zone or mainland to initiate the application process. The rate of an e-commerce licence may start from AED 5,750, depending on the jurisdiction.
  •   Most jurisdictions require pre-approval first before they issue your licence. The application process may take 3 to 7 days in free zones, whereas your application can be processed on the same day or up to 2 days in the mainland.

Step 3: Wait for your documents to be released

  •   Once your licence has been issued, then the digital documents will be sent to you. Some free zones may require original documents, which will be sent to you at a later date.

Step 4: Start your visa application

·   If the e-commerce licence package you chose comes with visa(s), then the visa application process will begin after the immigration card has been issued.

Which free zones offer an e-commerce licence?

There are many free zones in the UAE that offer an e-commerce licence, or an alternative that permits you to conduct e-commerce activities. Here are some of the top UAE free zones where you can apply for an e-commerce licence:

Can you get an e-commerce licence from the mainland?

Yes! Mainland jurisdictions also provide an e-commerce licence and we discuss them in the next section.

What are the different types of e-commerce licences in the mainland?

If you are getting a mainland e-commerce licence, then you need to familiarise yourself with the options offered by different mainland jurisdictions.

Dubai

Issued by the Dubai Department of Economic Development (DED), the eTrader licence allows entrepreneurs to conduct business activities via social media channels. However, at the moment, the eTrader licence is only available to UAE and GCC nationals living in Dubai.

In addition, only a single owner can be registered and you cannot set up a physical shop or apply for visas.

Another option is to obtain a general trading licence in Dubai mainland, which allows you to conduct commercial activities online. The prices for this premium trading licence start from AED 30,000.

Abu Dhabi

The Abu Dhabi Department of Economic Development (ADDED) issues Tajer Abu Dhabi, its version of an online trading licence for UAE nationals and residents, as well as GCC nationals. It permits licence holders to add their online business activities to their existing trade licences, or get a new licence to perform business activities online (through websites or social media channels).

This e-commerce licence supports three kinds of legal structures:

  •   Establishment for Emiratis and GCC nationals
  •   Single shareholder company for Emiratis and GCC nationals
  •   Limited Liability Company for UAE residents with Emirati partners

Sharjah

Home-based and online businesses that operate via social media channels can apply for an Eitimad licence, which is issued by Sharjah Economic Development Department (SEDD). The licence is available to UAE nationals living in Sharjah. They should also be at least 18 years old.

Ras Al Khaimah

Ras Al Khaimah has also launched its own online business licence: the Virtual Merchant Licence. This licence allows entrepreneurs to conduct business activities via social media platforms, websites or smartphone applications.

Available to UAE nationals living in Ras Al Khaimah, the virtual merchant licence covers the following business activities:

  •   Online retail
  •   Information technology
  •   Real estate brokerage
  •   Advisory/consultancy
  •   Professional and information activities performed via technological channels