The e-commerce industry in the United Arab Emirates (UAE) has experienced significant growth, driven by increasing internet penetration and a tech-savvy population. This burgeoning industry presents lucrative opportunities for businesses, both local and international.
This overview highlights the factors contributing to the growth of the industry, including technological advancements and consumer behaviour. In 2023, the e-commerce industry overview in the UAE showcased robust growth, with leading verticals including apparel and footwear, consumer electronics and media products. Consumers in the UAE demonstrate a preference for mobile-based shopping, valuing convenience and cost-effectiveness. Credit and debit cards are the predominant payment methods for online purchases, with 93.2% of respondents in Euromonitor International's 2023 survey expressing confidence in traditional banking. The widespread use of smartphones for online shopping highlights the importance of seamless, mobile-centric shopping experiences and underscores the critical role of social media in the e-commerce ecosystem.
According to the ‘E-Commerce Report in the Mena Region 2023’, the UAE’s total e-commerce market size reached AED 27.5 billion in 2023 and is expected to surpass AED 48.8 billion in 2028.
However, establishing an e-commerce venture in the UAE requires adherence to specific regulatory frameworks. This guide provides a comprehensive overview detailing the necessary requirements and outlining the application process for obtaining an e-commerce licence in the UAE. The cost associated with acquiring an e-commerce licence in the UAE varies based on the nature and size of the business. Through this, prospective entrepreneurs can navigate the complexities of the legal landscape, ensuring a smooth and compliant business set-up.
According to the UAE Ministry of Information and Services, one must adhere to the regulations set forth by Federal Decree-Law No. 14 of 2023 to obtain an e-commerce licence in the UAE. This federal decree governs e-commerce activities in the country. It further regulates the buying and selling of goods, services and relevant data through technological platforms such as websites, e-platforms, social media and apps. This law applies to both digital and physical goods and services procured via modern technology.
The legislation equates trade conducted through technological means with traditional commerce, ensuring similar legal recognition.
The law specifies several criteria that e-commerce industry traders in the UAE must fulfil the following:
● Possession of legal capacity ● Adherence to all legal, regulatory, professional and technical requirements for the UAE e-commerce licence application ● Securing necessary approvals, permits and licences from relevant authorities for conducting business via modern technology, as well as from a physical store ● Maintaining a secure technology infrastructure to support e-commerce operations is an important requirement for the licence application process ● Compliance with cybersecurity standards and requirements specified by the competent authority, ensuring secure browsing and purchasing for consumers
Digital traders can only sell goods and services legally approved for trade in the UAE. They must obtain special approvals from the competent authority for any goods or services requiring such clearance. Additionally, digital traders must comply with the conditions set by competent authorities regarding promotional and marketing activities and the handling of customer data. They must avoid deceptive practices and ensure that no false information about goods or services is provided. Providing customers with detailed digital invoices for all purchases made through technological means is mandatory.
● The roles of entities and authorities responsible for licensing and regulating e-commerce ● The relationships between digital businesses ● The interactions between digital traders and consumers ● Consumer rights protection ● The return of goods and services ● Insurance coverage for obligations under e-commerce ● Associated logistic services ● Digital payment gateways ● Dispute resolution
The specific requirements for each type of e-commerce licence vary depending on the emirate. However, the general requirements for all e-commerce licences include:
● A valid Emirates ID for all partners and managers of the business ● A passport copy for all partners and managers of the business ● A detailed business plan
After the process of selecting the appropriate licence type and gathering the required documents, submit an application for approval to the Department of Economic Development (DED) of the respective emirate. The application form requires basic information about your business, including the company name, activities and shareholders.
After processing the application, the DED will issue an e-commerce licence for your company. The licence is typically issued within a few days.
Once you have obtained an e-commerce licence, you must comply with all applicable laws and regulations governing online commerce in the UAE. This includes registering your business with the UAE Federal Tax Authority. Additionally, all e-trade/e-commerce licences require approval from the Telecommunications and Digital Government Regulatory Authority, which oversees the regulation of the e-commerce framework and transactions in the UAE.
Situated in the heart of RAK, the Ras Al Khaimah Economic Zone (RAKEZ), is a powerhouse business and industrial hub in the UAE that uniquely offers customisable solutions to set up your company in a free zone and non-free zone. From freelancers and startups to small and medium-sized enterprises (SMEs) and industrialists, the multinational community at RAKEZ is flourishing in over 50 industries.
By ensuring compliance with laws and regulations governing e-commerce in the UAE - RAKEZ's business set-up experts are here to make the entire process easier for you, from setting up your venture in the UAE to getting an e-commerce licence. We will help you with the following:
● Necessary documents for company registration ● Obtaining the UAE e-commerce licence with RAKEZ ● Leasing an office space to operate ● Acquiring additional approvals or permits required ● Opening a business bank account
Get in touch with our business set-up experts for a free consultation. Reach us on: Phone: +971 7 2041111 Email: info@rakez.com
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