E-commerce in UAE: trends & prospects

In Western European countries and the USA, where the market has long passed its peak of development, the share of e-commerce accounts for more than 10% of the total population purchases. In the UAE, online sales are growing at an average rate of 15.3% per year, and currently, they account for 12.6% of the total sales volume, as calculated by the Dubai Chamber of Commerce. Therefore, the opportunities for e-commerce development in the UAE are quite significant, especially since the market continues to grow rapidly.

The prospects of the Emirates can be explained by well-developed logistics and digital infrastructure. Moreover, the country's authorities are trying to increase the attractiveness of e-commerce by introducing various initiatives to regulate this market. Thanks to this, many entrepreneurs are considering the feasibility and seeking ways to open businesses in the field of e-commerce. The most common option considered is expanding the sales area on online platforms.

Do you need a separate license for e-commerce in the UAE?

In order to conduct any entrepreneurial activity within the country, a valid license is required. This applies to any commercial activity, including those entirely or partially conducted online.

Often, the licensing document has territorial limitations within the free trade zones (FTZs). Typically, these zones coincide geographically with the territory of the free economic zones where the license was obtained. The document specifies the permitted area of business operations. Entrepreneurs are also required to rent an office within these territories. However, if it's a FTZ, there's a possibility to rent a shared workspace instead of an office.

If the enterprise is already officially registered in the UAE but wishes to expand its activity on online platforms, it should consult with the authority where the business license was obtained. There's a possibility that the licensing document also covers this type of activity.

For example, the Department of Economic Development (DED) and the Dubai Multi Commodities Center (DMCC) do not issue an e-commerce license. There's a license for portals, issued to companies managing websites that act as portals on the internet via PCs and digital devices to link buyer and seller transactions. It also includes listing seller products and hotel tariffs for consumers to make online purchases and travelers to book hotel rooms. The role of such companies is limited to brokerage activities, excluding the completion of transactions between the specified parties.

However, there are cases where an existing license does not include entrepreneurship on the internet. For instance, in the Dubai Airport FTZ, when entering e-commerce, adding the corresponding type of business activity to the existing license is required.