Shopping is our nation’s pastime. Dubai’s malls are lined with retailers, both local names and prestigious international brands, catering to all tastes and all budgets. But UAE consumers aren’t just spending their dirhams on the high street, they’re also spending them online – millions of them.
The UAE e-commerce industry is predicted to worth around USD 10bn by the end of 2018. However, across the wider region, much of the market is still untapped according to financial services and research consultancy Alpen Capital. In their 2015 review of the GCC retail market, Alpen Capital reported that online retailing accounted for just 1% of total retail sales.
Clearly, we’re talking about a vast market here – one that includes everything from clothes and accessories to food, electronics and experiences.
The burgeoning market is not the only reason for the budding entrepreneur to get into the e-commerce space. The ease with which it is to enter the market is also a huge pull.
Why start an e-commerce business in the UAE?
It’s fast, flexible and affordable. The beauty of online shopping is that consumers don’t have to leave their home and neither do you. Provided you have a stable internet connected and a laptop, you can work from anywhere – home, the coffee shop, or wherever best suits you. You don’t even need to reside in the UAE – though doing so comes with many benefits.
It’s fast, flexible and affordable. The beauty of online shopping is that consumers don’t have to leave their home and neither do you.
Set up your UAE e-commerce business in a free zone and as well as taking advantage of the UAE’s zero tax rate on both personal and corporate income, you’ll also be excluded from customs tax and be free to repatriate 100% of your profits.
The process for setting up in a free zone is super easy. A company formation specialist can take of this process for you, liaising with the most appropriate free zones on your behalf to make your application. In most cases, the entire application process can take as little as seven days.
The UAE’s free zones are also an incredibly affordable way to establish a UAE e-commerce business. The only upfront cost is the licence application fee which starts from around AED 10,000-15,000. As there’s no need to rent office space, the costs for starting an e-commerce business in the UAE are incredibly low.
It is also possible to establish your business in the UAE mainland. To do so, simply apply directly to the Department of Economic Development or the Municipality for your chosen Emirate. You can do this online. Alternatively, a company formation specialist can manage this process for you.
The main benefit of setting up an e-commerce business in the UAE mainland is that you can trade directly with the local market – something that is not possible from a free zone.
UAE e-commerce: Start small, get bigger
The beauty of setting up an e-commerce business in the UAE is that it’s easy to start small and grow. You have the option to start small from your own home before progressing to office space or even a warehouse facility as your business gets bigger.
Most free zones offer several office space packages. These usually start with flex-desk options which allow you to use desk space, phone lines, internet connection and other office facilities on an ad-hoc basis for a fee. Many also offer a range of office sizes, from single-person units up to spaces that can hold hundreds of people. Some free zones even offer warehouse space, allowing you to store stock on the premises should you wish.
As your e-commerce business grows, so too will your workforce – and free zones can help to facilitate this too. Most free zones allow entrepreneurs to apply for multiple employee visas. The maximum number you can apply for will depend on the size of your business premises.
It is possible to take the same approach on the mainland. Office space of all sizes is available to lease throughout the UAE, and once again the number of employee visas permitted will depend on your premises.
Starting your UAE e-commerce company
The e-commerce opportunity in the UAE is unlike anywhere else in the world. The barriers to entering the market here are extremely low, both in terms of cost and bureaucracy.
The e-commerce opportunity in the UAE is unlike anywhere else in the world. The barriers to entering the market here are extremely low, both in terms of cost and bureaucracy.
Of course, that is not to say anyone can do it. The UAE is a competitive marketplace regardless of the industry you are in. Those who succeed here are only the ones with the drive, determination and business knowhow to go the distance.
If you possess these qualities – along with a laptop and an internet connection – then you need little else.
With the help of a company formation specialist, your business could be up and running within a week. All that is required of you is some basic documentation – such as passport copies and your application form – and a little of your time.
A company formation specialist can take care of the rest, helping you decide on a free zone and managing your application. They can also assist with your visa application and with opening a corporate bank account.