How to Get Ecommerce License In Dubai In 2021

How to Get Ecommerce License In Dubai In 2021

The internet revolution has transformed our entire lifestyle and associated activities.

Whether purchasing or selling, the internet business is driving leads in a booming manner around the world. So, the entrepreneurs and business enthusiasts who are willing to set up an online business in Dubai require a Dubai E-commerce license.

However, if you are new in Dubai and unaware of the procedure for setting up your Fresh Business, you need assistance. And Dubai Business Zone, here, comes with the advantages of years of industry experience, understanding of laws and regulations, and wide networking among the legal authorities that ease accessing the business license in Dubai.

1. Aspiring Entrepreneurs/Business Enthusiasts

Whenever any business arrives in the country, it impacts the economy and, ultimately, its GDP. Dubai, being a Business friendly and technology-driven city, is also the heart of UAE. So, The Abu Dhabi Department of Economic Development (ADDED) hardly denies your application of obtaining an e-commerce license if you know the right way.

So, to avoid mishappenings, the Dubai Business Zone has planned a strategic procedure to obtain an E-Commerce license in Dubai at best in the following step. Let’s get to know them one by one:

2. Plan a Legal Business Structure

Firstly, make sure what your company represents: is it a one-person company?, an LLC (Limited Liability Company), a representative office, or a branch of a parent company? To conclude, specify where and with who you stand.

3. Confirm Your Business Location

Do not misunderstand the location of your office or operating area. It is a place where you acquired your e-commerce license. The free zone and the mainland are the two Dubai Business Zones. The former allows 100% ownership & the latter requires a local sponsor with ownership of 51%, and the rest is yours to operate independently. So, choose accordingly.

4. Register Your Company’s Trade Name

Opting for a unique trade name multiplies your chance of getting attention. And always consider similar domain names to ease the googling process; otherwise, confusion could be the biggest turnoff to your Business.

5. Apply for the E-commerce license

The department of economic development issues licenses, trade name registration, and initial approval at the legalized fee of AED 10,000. However, The free zone setup requires a permit from the respective authority, which has its procedure. Hence, your business nature decides which one has to be considered.

6. Submit Application To Obtain The Initial Approval certificate

The initial approval certificate is a green signal to your hustle of setting up an E-commerce business in Dubai. A non-renewable NOC (No objection certification) is valid for six months. Surprisingly, you can apply for the initial approval certificate and trade name approval application together.

7. Draft MOA and Local Service Agent Agreement

If you are going for a mainland company setup, then a Memorandum of association (MOA) draft is necessary by describing arrangements and percentage of ownership. However, unlike the mainland, the free zone does not require such a procedure, so it is better to skip it.

8. Hire space for your office

In the journey to get your license, hiring or renting a space for the physical presence of your office is the next crucial step as it has been made mandatory to have an office by the legal authorities of Dubai.

9. Customs & Posts registration ( if willing to import & export)

Import/ export can be possible by having an importer’s code, which can be registered by the ports & customs authorities. So, If your company lies under the mainland, then there is a need; if it is free zoned, then no need as the concerned company has to operate within the free zone.

10. Opening a corporate bank account

As you get your E-commerce Business license & Business registered successfully, you can now open a corporate bank account as per your needs and demands.

All in one!

As the best business setup agency for the mainland and the Free zone in Dubai, Dubai Business Zone knows better approaches. So, without wasting further time, book an appointment.

How to Have a Full Ownership of Your Business in Dubai?

DED Dubai Full Ownership

The UAE Commercial Companies Law (the “CCL”) has changed to allow companies incorporated in the UAE under the CCL, sometimes colloquially called “mainland” companies, to have full foreign ownership. The foreign ownership change took effect on June 1, 2021, according to the UAE Ministry of Economy.

This change aims to stimulate business activity and attract more foreign investment into the United Arab Emirates. As per the guidelines published by Dubai’s Department of Economic Development (“DED”), full foreign ownership is available for more than 1,000 commercial and industrial activities, excluding economic activities with a strategic impact. This strategic category includes activities in core sectors such as military, banking, insurance, and telecommunications. The complete list of activities open for full foreign ownership can be viewed on the Dubai DED website via this link.

However, before you start a new business or revise your company structure, you ought to understand the conditions and intricacies involved in this amendment to the CCL.

Rules Vary in Each Emirate for Mainland Company Setup

While Dubai has around 1,000 business activities for full expat ownership, the Abu Dhabi Department of Economic Development (ADDED) has a list of 1,500 activities. The local government of each Emirate retains the final authority to decide the foreign ownership percentage.

The local Department of Economic Development can request that you submit your business proposal and documents supporting your business and specific activity for a final decision on ownership percentage. It helps to have the assistance of a seasoned consultant who can submit these documents on behalf of your business.

Impact on Existing Mainland Businesses

The status of existing business licenses structured on the 51%-49% model remains unchanged. However, you can amend your Memorandum of Association (“MOA”) and license via standard legal procedures.

Full ownership does not diminish existing requirements for licensing, except that it is no longer mandatory to have an Emirati or GCC national or company as a partner. In addition, the new guidelines do not yield in any additional fees, guarantees or capital requirements.

You cannot convert the legal form of a company from an LLC (Limited Liability Company) to an expat-owned sole proprietorship; however, the license can be transferred to a one-person company with limited liability, or you can add another expat to retain the LLC structure. Full ownership does not apply to commercial agencies, as they are regulated by the Commercial Agencies Law and not the CCL.

Previously, LLCs were required to have a share capital of at least AED 150,000, although in practice the minimum capital accepted by Dubai DED was AED 300,000. It is not necessary to deposit the share capital, companies are expected instead to have adequate share capital in order to achieve the purpose of their incorporation.

In practice, the minimum share capital imposed is at the discretion of the relevant DED in each Emirate and these authorities may continue to impose minimum share capital requirements for certain business activities.

Amending Your Existing DED License

Before you amend your existing license, you will need to ensure cooperation with the Emirati shareholder. In most cases, the Emirati shareholder is a silent partner who collects an annual fee for his or her services. You will most likely need to negotiate a final settlement fee to transfer all shares to yourself or another expat partner.

Once you have come to a mutual accord, you can proceed with a sale of share agreement and amend the MOA. We can assist with the legal process of the amendment. If the Emirati shareholder does not agree to remove himself or herself from your existing LLC company, you still retain legal and arbitration options to get full control of your business.

Impact on Free Zones

Since their inception, UAE free zones were dependent on full ownership in companies as their primary differentiator. However, the amended CCL has created a new challenge to find new ways to compete with mainland company formation, be it with their services, ease of transactions, or employment and taxation regulations.

Free zones continue to have a tax-free environment which can play a deciding factor for companies. Mainland businesses in the UAE must register for VAT if they have a turnover of more than AED 375,000 in a year. The UAE Cabinet has defined free zones as “designated zones”. These zones are outside the scope of VAT when goods are transferred between designated zones.

Long-term property leases ranging from 20 to 50 years are available in some free zones such as Jebel Ali Free Zone or Hamriyah Free Zone. Many free zones also offer freehold ownership options or virtual desk solutions for SMEs whereby a physical office is not required.

The decision to either incorporate via a free zone versus the local DED may boil down to what share of the business is transacted locally versus internationally. Entrepreneurs focused on external markets may opt to retain a free zone setup, whereas those focused domestically can save the cost of having to go via a local distributor and thereby improve profit margins.

How Do I Incorporate a New Mainland Business With Full Ownership?

The incorporation process for a new mainland business is easier than ever. Many of the procedures are available through online portals managed by the local DED. You can launch your business in 5 simple steps:

  • Think of a name for your business and select your business activity from this list.
  • Complete the incorporation paperwork. The documentation required can vary depending on the business sector. This is where a business consultant can come in handy.
  • Lease a physical site for your venture and pay the DED license fee.
  • Open a corporate bank account once you have a license.
  • Complete visa formalities for yourself and any foreign staff.

The cost for company formation in Dubai depends on the business activity, location, and the number of visas needed. You should factor in service fees for business incorporation firms, office rent, and visa costs.

Apart from foreign banks and oil companies, there is no corporate tax imposed in the UAE. There are also no restrictions imposed by the UAE authorities on the repatriation of profits for mainland businesses. Annual fees are payable to the relevant local DED authority to renew business licenses. Fees are also payable to the relevant Chamber of Commerce and other regulating agencies (if applicable).

Free Consultation for Company Setup

Our consultants are experts in Dubai and GCC incorporations, having advised on several of the region’s high-profile incorporations for franchises, private investment firms, and start-ups in multiple sectors. We also specialize in helping SMEs navigate the local business environment.

5 Common Fears Successful Entrepreneurs Need To Overcome

Overcome Fears

With anything in life, you need to overcome your fears if you want to be successful. Letting your fears get the better of you will make it close to impossible to chase your dreams.

Here are examples of fears that an entrepreneur will often face when building a business.

1. Criticism or rejection

People are often afraid of pursuing their dreams or a business venture out of fear of being criticized — that their ideas will be rejected even by their family or friends. Some fear that others will see them as weird or crazy people.

You might have been told that what you are planning would be too risky and would never work. This fear can be so debilitating that it can even prevent people from trying something new or even taking the next step.

Everything starts with you. You need to start believing in your talents first before you can make others believe in you and your business. Instead of worrying about the negative things that people might think of saying, think instead about what they would say if you succeeded in your pursuit.

If people think you are crazy, then accept it. Keep in mind that it is the people with “crazy” ideas who end up changing the world.

2. Debt or bankruptcy

Some people stay in their jobs and don’t go into business out of fear that their decisions would land them in the poorhouse. There is a basis for this fear. Starting a business requires capital and finding funding can be difficult.

If you find it hard to build capital or convince people to invest in the venture, you can try saving up for some of the capital needed to start your business. The amount may not be enough to pay for everything, but it should be enough to get you started or try out some of your ideas.

3. Offending others

Some people are indecisive out of fear that others will see them as being too self-confident or arrogant. This is especially true when it comes to marketing or promoting the brand.

However, being audacious is often important if you want to become a successful entrepreneur. You have to be confident enough in expressing your ideas, in promoting your brand and what you have to offer. Advertising is a necessity in building a successful business. If you don’t do it, no one will know about your brand or what you can do for people.

4. Looking stupid

We sometimes don’t do things out of fear of looking foolish in front of other people. Have faith in your abilities and the decisions that you make. What you decide to do allows you to test your skills and become better, whether it is in terms of speaking in front of a crowd, making movies, leading a team, or something else.

Regardless of whether you made the right or wrong decision, there is something you can learn from the experience. The worst thing you can do is to not do anything at all. It may make you feel safe, but it also prevents you from growing and developing your skills.

5. Success

You may be surprised to find that there are entrepreneurs who fear success. Success is something we all yearn for when we build a business. So why would people fear becoming successful?

We have this notion that building a business is extremely difficult. On the flip side, what if it’s easier than you’ve been led to believe? Imagine opening the doors of your bakeshop for the first time and seeing a long line of people waiting to get inside.

Some entrepreneurs fear that they will be unable to handle the demands of running and maintaining a booming business. There are other business people who feel that their success will alienate them from their friends and colleagues.

Operating a thriving business is what most entrepreneurs aim for. At some point, you may feel alone, but it comes with the territory of becoming the best in your field. Always strive to improve yourself and your business. Your business success will not just affect you but can also affect how your industry grows and develops.

Everyone has fears. Entrepreneurs are no different. Knowing how to face your fears and overcome them can help you create a business that is successful.

5 Tips For Starting A Business Overseas

Starting Business Overseas

Hundreds of companies make the life-changing decision of expanding their businesses overseas every year. The UAE, for instance, sees restaurants, retail stores, and numerous new company formations in Dubai Free Zones spearheaded or owned by foreign entrepreneurs annually.

Going global is certainly a goal worth working hard for since the returns and prestige that businesses will receive are incomparable. There are also other benefits that come with expanding or opening a business abroad.

Unfortunately, not all companies will find success with international expansion. There are numerous challenges that businesses will have to face and overcome in order to carve a name and be profitable in their venture within a different country.

Finding Success Abroad

Whether you are starting a new business or expanding your company overseas, following some simple yet useful tips will help you have an easier time with the whole process. These tips can also prevent you from making mistakes that can cause you costly and frustrating delays.

1. Conduct sufficient market research

If you have plans of opening or expand your business overseas, the first step you have to take is to ensure there is a market for your products or services in that country. In order to establish the above, you will need to study the market you want to enter.

By conducting sufficient research or recruiting experts for the job, you will get a solid and realistic idea if it is worth opening a company or branch in a particular company.

You can also use the findings as a form of assurance that your venture will have higher chances of succeeding or, at the very least, limit the likelihood that your business will fail.

2. Understand the requirements of opening or expanding your business in your target area

Once you ascertain that there is a market for your business, you will need to familiarize yourself with the laws in place for opening or expanding your business across borders.

If you are a solo foreign entrepreneur, you will most likely need to have a business visa to operate. Should you require assistance In acquiring a visa, you can seek professional help from a migration agent in the form of business setup consultants.

Not only will they be able to assist with the more obvious requirements but also more complicated tasks including special approvals and attestations.

3. Develop a strong business plan for your new market

Although you may have an existing business plan which has been successful thus far in the operating country, you will need to adapt it for your target foreign market.

Your business plan for your overseas venture should consider the following:

  • Potential market or customers
  • Company set-up (partnership, sole proprietorship, corporation, etc.)
  • Additional expenses (shipping, travel, office set-up, etc.)
  • Import and export strategies
  • Sales and marketing models
  • Financial sources and expected incomes

4. Understand the culture

Setting a company up in a different country should entail business interactions with the locals. You may already be an expert in impressing investors, potential partners, and customers in your home country, but it is most likely you will have a hard time doing so in a foreign land as a result of cultural differences.

As such, before traveling or attending a business meeting online, conduct research about the country you’re seeking to open your business in. Take the time to familiarise yourself with important customs or traditions in addition to the general culture.

Knowing certain cultural traits will show that you respect your potential partners’ or customers’ culture and are truly interested in a close professional relationship with them.

5. Know when to get help

Lastly, there is nothing easy about starting or expanding your business locally. When you want to tap into the international market, anticipate challenges. Keep in mind though that you don’t have to face these obstacles alone; there are experts who can help you out.

Various consultancy firms and service providers offer their assistance to foreign investors who need help with obtaining an entry visa, business license, and other permits to legally operate a business. If you can’t understand the local language, you can hire a translator to help you out as well.

Should you require additional financial support, consult with various financial institutions in the country. They may offer loans to foreign investors, however, ensure that you have a solid business plan to present to them – showing your intent to better their community.

Tapping into a foreign market can be challenging. But going about the right processes will ease the speed bumps that you may encounter. Put the hard work in with patience, and help from the right experts.