In these modern days, online shopping is growing tenfold almost every year. Especially in UAE, online business is at the peak of their profit which is why people often search how to start online business in UAE.
Online business bloomed before the COVID-19 pandemic as people avoided physical contact and started doing all the work digitally, including shopping. However, it grew even more after the pandemic.
So if you are also looking for ways to open an online business in UAE, then you have visited the right place. You will learn the requirements needed to start an online business and the costs and benefits of creating it.
By the end of this guide, you’ll understand how to start an online business in UAE.
Some of the best online businesses in UAE are trading, online consultancy, translation, food delivery, and web design.
How to start online business in UAE?
Starting an online business in UAE is not an easy job. This is because you will have to make a lot of decisions throughout the process.
You will need to look out for a couple of steps while starting an online business. Some of the important ones are listed down below.
Step 1: Choose the right location
When starting an online business in the UAE or the whole of the middle east, one of the most important decisions you will need to make is choosing the correct location.
There are three main options for starting a company in the UAE – free zones, mainland, and offshore. Each option has advantages and disadvantages that you will need to consider before making your decision.
Free zones are special economic zones that offer 100% of foreign ownership and a tax-free environment. This makes them an attractive option for many businesses, especially small businesses.
However, in a free zone area, you will face various restrictions from the authorities, such as being required to lease commercial space from the free zone authority and not being able to conduct business outside the free zone.
Mainland companies are registered with the Department of Economic Development in one of the seven emirates. Mainland companies have more flexibility than free zones but are also subject to corporate taxation.
Offshore companies are registered in a jurisdiction outside of the UAE, such as the British Virgin Islands or Delaware. They do not have to pay taxes in the UAE but have less access to banking and other services.
Choosing the right location for your online business in the UAE is extremely vital for your business. You can also get help from business consultants if you do not know where to start.
Step 2: Name your company
The name of a company may sound like a simple job, but it has very high significance in UAE. Here, you should follow specific naming conventions unfamiliar to people not from the region.
When choosing the name of your company in Dubai, you must never involve the name of Islam or Allah. [1]DMCC, “Rules of company names, https://www.dmcc.ae/application/files/1416/0265/3732/Company_Name_Reservation_Rules_and_Guidelines_-_V2.pdf”
Also, you must avoid all the offensive names to not get into trouble. Another point to consider is you can only register any company name if they are not previously registered.
Step 3: Applying for a license
To make your business operate, whether that is offline or e-commerce, you must apply for your license.
For the mainland online business, you must apply to the Development of Economic Development of the emirates you want your business to be in. [2]UAE, “Business license, … Continue reading
However, if your business is in a free zone, it is a lot easier to apply directly to the particular free zone. In any location, you also must submit a legal document which we will explain in our next section below.
Applying for a license can be very lengthy, and your application might get rejected once or twice, so you can take the help of any business consultant in the UAE.
Step 4: Apply for Visa
If you are a local businessman, this process is unnecessary, but if you are a foreigner who wants to start an online business in the UAE, you must apply for your visa.
You will need a visa to enter in UAE or for any employee you will hire, even if you are operating from outside UAE.
You can apply for the visa if you are eligible in age and do not have any prior police convictions, and you will receive your UAE visa in no time.
Step 5: Open business bank account
If you get your visa and license, you are all set to start an online business in UAE. However, you also need a corporate bank account which is the final process of making your online business official.
It is very easy to open a bank account as you can just submit some legal documents to your preferred bank.
Hence, these are the step-by-step processes you can follow to learn how to start an online business in UAE.
Legal requirements to start online business in UAE
To start an online business is relatively easy. However, you will still need to show your licenses and documents to authorities to make your business official and eligible.
You must submit your license and document to the Department of Economic Development to make your business online and legal.
Here are some legal requirements to start an online business in UAE.
- Company name document
- Passport copies of both foreign and local investors
- Applied visa page
- A no-objection certificate or NOC from the local investor in UAE
- Emirates ID registration copy
- DED registration application form
- EJARI or tenancy contract agreement
- An attested Memorandum of Association
- A verified business licenses
Hence these are the necessary documents and licenses to start online business in UAE. If you get confused or overwhelmed with all these documents or licenses, you can take assistance from a business setup consultancy.
5 best online business ideas in UAE
If you are all set to open a new online business in UAE and are looking for some of the best online ideas, please take a look.
Here are five of the best online business ideas in the UAE.
- Trading
The UAE is a popular place to trade. This is why the e-commerce sector is growing there. You can easily get an e-commerce license in the country, which will allow you to run your small business online from anywhere in the world. You can trade many things online but must have some basic skills in selling products.
- Consultancy
The demand for consultants has increased because the business sector is booming in many parts of the world. People want to talk to professionals about their business before they start it.
This is where you can give suggestions for online businesses in UAE. However, the range of services you can offer is not limited to trading or business. Nowadays, many companies seek consultation even before they start their business.
- Food delivery
More and more people in the UAE are ordering food online to be delivered to them. This is because the market for online food delivery is gradually growing. People often want their food delivered quickly and cheaply during the pandemic. You can make money by starting your own online food delivery business in the UAE.
- Online website design
A company’s website is important because it attracts customers and increases interaction. Companies often pay a lot of money for someone who is an expert in creating a website that looks professional and exciting. Hence website design can be a very profitable online business worldwide and in UAE.
- Online translating
Many foreigners need support in language translation, especially if they do not know the native language. To get the best experience in foreign countries, the first thing they do is often hire a translator.
If you are providing services online, then people of foreign nations can also take advantage of the services. You can help tutor foreigners about the city’s culture, tradition, and language even before they land there.
Hence these are some of the best online business ideas to establish your business. You can establish these online businesses in free trade zone where you will get all the benefits of online business.
Cost to start an online business in UAE
Starting an online business in Dubai can be very exciting, but knowing the costs is important before you start.
The cost of setting up new business ideas in Dubai can include things like website development, marketing, and even hiring employees. Make sure you have a good idea of your total expenses before you launch your business.
The total cost of your visa will depend on many things, such as:
- How big is your business?
- How many visas do you need?
- If you need office space?
- If you want your business to be on the mainland or in a free zone?
You should expect to spend from AED 15,000 to AED 50,000 on costs for your online business. This will depend on your needs. [3]UAE, “Cost of starting a business, https://u.ae/en/information-and-services/business/starting-a-business-in-a-free-zone#:~:text=zone%20company%20is-,AED%2050%2C000,-per%20company%20and”
Setting up in a free zone is often the best approach if you are looking to keep startup costs low.
If you want to know all the costs involved, you can easily take help from consultants or agencies to ensure that you are fully prepared for the financial realities of starting an online business in Dubai.
This includes learning about the different types of taxes that may apply to your business and what kind of banking and financial services are available in the city.
Why to start an online business in UAE?
Since e-commerce has been growing rapidly in the UAE, many people have rapidly attracted to online businesses. The trend grew even bigger when the pandemic hit and the government imposed strict regulations on physical activities.
Additionally, online business is even more attractive in UAE due to its growth and the number of benefits that a company can get from it.
- Tax benefits
The number one reason people move to the UAE is the attractive tax rates. The country has introduced a 5% value-added tax since 2018. The standard VAT rate is applied to GCC’s supply of products or services. If you export products or services, the 0% VAT rate applies.
Almost all types of businesses don’t have to pay taxes, except for gas companies, branches of international banks, oil companies, and hotels.
That means there is no personal income tax, capital gains tax, withholding tax, or corporate tax. This is a big attraction for entrepreneurs and businesses looking to set up in the UAE.
And with an extensive free zone network offering 100% foreign ownership, zero taxes, and easy setup procedures, there are several reasons why the UAE is a top destination for business.
- Convenient location
It is one of the best places to start an e-commerce business in Dubai or UAE due to its convenient topography.
Its location between Europe, Asia, and Africa gives it access to 2.5 billion consumer markets in the Gulf, Africa, Asia, CIS countries, and Europe.
The UAE also has the biggest airports and sea in the world, making it easier for businesses to get their products to market. It has a stable political environment and a strong economy, making it an ideal location for businesses of all types.
The UAE has an excellent opportunity for businesses to succeed because of its convenient location and large market access.
- Advance infrastructure
UAE is one of the most modern countries in the world, with very high infrastructure and modern technology.
The fast internet, quick trading system, virtual payment method, and rapid use of information technology have made opening an online business in UAE easy.
UAE is also very advanced in its physical platform, where high-quality roads, digital telecommunications to availability of ports and airports make any type of business in the UAE a less complicated task.
- No currency restrictions
Another major benefit while opening an online business in UAE is that there are no currency restrictions. [4]Export,”Foreign exchange, https://www.export.gov/apex/article2?id=United-Arab-Emirates-Foreign-Exchange-Controls#:~:text=There%20are%20no%20currency%20restrictions%20in%20the%20UAE”
As residents and non-residents, you can have bank accounts in the UAE or overseas that can be used to store local or foreign currency.
This will create a safe environment when businessmen do online or offline business as they can agree to receive or send payment in any currency without risk.
- Large e-commerce opportunities
An E-commerce platform is starting to grow at a rapid rate in UAE and other middle eastern countries due to major demands for products from social media.
Since UAE has one of the best locations for business and trade, you will have many benefits to starting an e-commerce business in Dubai and the whole MENA region.
International e-commerce platform such as Amazon is quite popular in UAE, along with a local organization, Noon. Hence, if you want to start an online business, you may get many benefits from e-commerce in UAE.
- Safe and modern banking system
In UAE, you will find banking systems that use the latest technology. This technology provides financial services that meet the most complex economics and international standards.
Furthermore, UAE also has many payment gateway and facilities for online payment, which is necessary to start your online business, most importantly if you have a foreign trade license and ownership.
The UAE banks have been reliable and safe during economic downturns, creating trust among local or global businesses. Hence these are some of the significant benefits of setting up your online business in UAE.
You can get everything you need and even more than all you need to start a company in UAE, Dubai, and more.
More Related Stories
- Check out this Dbd guide on – business set up in Dubai, if you are looking to set up a business in Dubai and UAE.
- Here are the – best online business ideas in UAE, which you can start from the comfort of your home.
- Take a look at this Dbd guide on – business ideas in Dubai, which covers everything from e-commerce to retail.
- Here are the best business setup consultants in Dubai; check out this Dbd guide to find the perfect one for you.
FAQ on online business in UAE
How much does it cost in opening online business in UAE?
Many experts believe it will take up to AED 15,000 and AED 50,000 as a cost in opening an online business in UAE. However, the cost can vary depending on the type of business or location you choose to do.
How can I register my online business in UAE?
You can register your online business after submitting some important documents and licenses to the company name document, passport copies, EJARI certificate, and more.
What license do I need to sell online in UAE?
You will need an E-Trader license to sell products online in UAE. If you are over the age of 21 and are based in UAE, you can apply for an E-Trader license.
Do I need a business license to start an e-commerce business in Dubai?
Yes, you will need a business license to start an e-commerce business in Dubai. The license cost can vary depending on the products or services you offer.
What are the best online businesses in UAE?
Some of the best online businesses in UAE are trading, online consultancy, translation, food delivery, and web design.Some of the best online businesses in UAE are trading, online consultancy, translation, food delivery, and web design.
Final thoughts
UAE is one of the best places to start an online business, but there are some rules and regulations, so you must learn how to start online business.
There are many benefits to opening an online business in the UAE, and you have the best chance of succeeding if you first do some research before starting an online business.
If you are confused, you can check our guide or take help or can take help from the business consultants.
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About the author
Khalid Jama
Khalid Jama is a financial advisor based in Dubai. He has a decade of experience in the financial sector, specializing in asset portfolio management, investor relations, and taxation. His expertise in corporate finance and global investments have made him one of the most sought-after advisors in the Emirates. With knowledge, Khalid has helped his clients create long-term wealth through careful analysis and strategic planning.
Mohamed Yousuf
Mohamed Yousuf is a personal financial advisor based in the UAE. He helps people save money, shop smarter, and manage their finances. He has over a decade of experience as a financial adviser and is committed to helping his clients reach their financial goals. He is also actively involved in the community, volunteering his time to help those in need.
