E-commerce is booming in the UAE, with revenue projected to reach a staggering USD 8.39 billion in 2025. This makes e-commerce a tempting opportunity for savvy entrepreneurs. Unlike many other industries, which often require specific qualifications, warehouse and office spaces, and other expenses, almost anyone can get started with an e-commerce business, provided they have the stock and a secure internet connection. But do you need to have a business license?
Do I need a business license to sell online in the UAE?
The simple answer is yes – you need a business license in the UAE. The UAE government requires all businesses, including e-commerce businesses, to hold a valid trade license to operate legally. This regulation applies to everyone selling online, regardless of whether they are selling products through social media platforms or online Federal Decree-Law No. 14 of 2023 Concerning the Modern Technology-Based Trade, operating without a business license is illegal.
Consequences of selling online without a business license
Operating an online business without a valid license in the UAE has significant consequences, including:
Fines and legal action
Individuals or businesses caught selling without a license may face significant fines, depending on the severity of the violation. In some cases, legal action may also be taken, potentially leading to business closure or even imprisonment.
Seizure of goods
If you are found selling without a license, authorities may confiscate your inventory.
Restricted access to payment
Many payment platforms in the UAE require a valid trade license. Without this license, you will likely face difficulties setting up secure payment options for customers.
How to obtain a business license for online selling in the UAE
The UAE authorities have made the process of getting a business license for e-commerce as straightforward as possible, but it still requires local expertise and knowledge to ensure no unnecessary hold-ups. If you have any questions about the process or would like to know more about how our business advisors can help, reach out to our team today. To give you an idea of what lies ahead, here’s what to expect in five simple steps:
Step 1: Choose your business structure
Mainland and Free Zones are the two most common options for e-commerce businesses operating in the UAE. The ideal location for your business will depend on your target audience, business offering, and budget. The top line? Mainland companies are an excellent option for those wishing to operate across the UAE, while free zone businesses enjoy streamlined business setup, 100% foreign ownership, and other tax benefits.
For more information on the differences between Mainland and Free Zone company setups, take a look at our comprehensive guides to business structures in the UAE or contact an advisor to see which option is best for you.
Step 2: Define your business activity
There are two different types of e-commerce business licenses: E-Trader and E-Commerce. Small-scale businesses that operate from home and deal with a small number of goods tend to require an e-trader license, while full-scale online businesses will need an e-commerce license. Whether you sell physical products, digital goods or services will also define the type of license you need.
Step 3: Register your trade name
You will need to choose a unique name that reflects your business offering and vision. You should also ensure that it is compliant with UAE naming laws. For example, it should not be offensive or blasphemous.
Step 4: Submit the necessary documents and application
To apply for a business license, you must provide a range of documents, including passport copies, proof of residency and a proposed business plan. Remember, digital traders are only allowed to sell goods and services legally approved for trade in the UAE. Any other goods or services will need special approvals from the authorities. A reputable business setup consultancy like Set Hub will be happy to help ensure that you have collated all the right information and manage the process for you.
Step 5: Pay the fees and obtain your license
Once your license has been approved, you will need to pay the remaining fees. At this stage, you can open a corporate bank account to manage business finances. For this, you will usually need to provide further documentation, such as proof of business activities and shareholder (if applicable) documents. You can start trading as soon as you receive your license.
Benefits of having a business license for online sellers in the UAE
A business license is essential in the UAE for compliance reasons, but it also unlocks a whole string of benefits that could elevate your e-commerce business.
Increased credibility and trust
A business license will enhance your credibility as a business and build trust with customers, suppliers and potential investors. This should lead to better customer loyalty and greater growth opportunities.
Access to the latest banking and payment services
Most of the UAE’s top-tier banking and payment services require proof of a business license to use the services. These services make transactions more seamless, secure and efficient, which is vital for scaling your business.
Legal and secure business operations
A business license ensures you can operate without fear of being fined or penalised, allowing you to focus on growth without unnecessary disruptions.
Tax benefits
Registered business owners can benefit from numerous tax benefits in the UAE, including 100% repatriation of profits and zero personal income tax. These incentives allow business owners to boost the bottom line and maximise their profits, legally.
Global expansion opportunities
The UAE is one of the best-regarded business hubs in the world, boasting a strategic location and world-class infrastructure. An e-commerce license will enable you to tap into international markets and leverage Dubai’s strategic location between Africa, Asia and Europe.
About Set Hub
Set Hub was established with a clear vision: to provide the best and most dynamic support to enable entrepreneurs to bring their ideas to life, efficiently and affordably. For the past 12 years, we have assisted over 25,000 businesses and become a leading business setup consultancy in Dubai,
We are based in the UAE but our expert team of over 80 members has a global mindset. From licensing and company set-up to banking and beyond, we offer solutions tailored to each unique client. If you’re looking for support in your e-commerce venture, get in touch with our advisors today to find out more about how we can help make the process as efficient and enjoyable as possible.
