E-commerce is dominating the discourse on the business setup in Dubai due to global pandemic that rendered nearly all the brick & mortar businesses fragile. The investors have been racking their brains over identifying lucrative options for business setup in Dubai that could withstand the challenges posed by the COVID-19 pandemic. E-commerce emerged as the perfect answer to their quest as the demand for online shopping soared in Dubai as people confined themselves within the four walls of their home prompted by lockdowns and the scare of catching the infection. In a digitally advanced economy like Dubai, e-commerce appears to be the perfect contender to have sustained business growth in the times of challenge. If you are planning to establish an e-commerce company, then consult the best business setup consultants in Dubai to have a better clarity on the procedures.
Why Set up an E-commerce Business in Dubai?
UAE is one of the most progressive nations in the world in terms of trade and commerce. With a very high GDP, UAE and its centres are home to some of the wealthiest people in the world. This makes sense for businesses to operate a physical or a digital presence in this part of the Middle-East. While it is easy to set up a new business, it is always wise to take help from legal experts who can help you navigate all the paperwork. If you wish to understand how to set up a new business in Dubai, read more.
Dubai is the most appropriate place in the world to set up an e-commerce business at this moment. The e-commerce landscape in Dubai is only in the nascent stage and offers plenty of opportunity. The following are some of the reasons why the investors should commence the process of e-commerce business setup in Dubai now.
1. The COVID-19 Impact on Consumers
The COVID-19 pandemic has led to a drastic change in the shopping patterns of the consumers in Dubai. Before the COVID-19 struck the world, the shopping scenario in Dubai has been largely centered around shopping malls and other brick & mortar businesses. But due to the lockdowns and social distancing measures, the customers reduced the frequency of going out for shopping. Also malls and other physical retail shops in Dubai are allowed to let in only a limited number of customers at a time. These factors have forced the consumers to spend more time on online shopping platforms to purchase both essential and non-essential supplies. Since the WHO has confirmed that we have to learn to live with the COVID-19 virus, the consumers are unlikely to change their liking for online shopping and which is a favourable factor setting up an e-commerce business in Dubai.
2. Strong Digital Infrastructure
Business setup consultants in Dubai recommend the entrepreneurs to invest in e-commerce due to the availability of a strong digital infrastructure here. The UAE government has a strong policy to develop the digital infrastructure in the country with the advent of the 5 G technology. The following are the factors that favour the development of e-commerce business setup in the UAE.
- High usage of mobile phones
- Millennials in the UAE are internet-savvy
- Highly developed digital payment system due to the rise of Fintech firms
- Supportive policies by the government
How to Initiate the Process of Business Setup in Dubai Free Zones?
The UAE has more than forty free zones and more than 20 of them are located in Dubai. The investors can enjoy the benefit of a much faster and cost-effective process of company formation in Dubai free zones compared to the mainland. The following factors need to be considered while setting up an e-commerce business in Dubai free zones
1. Obtain an E-commerce License
The process of business setup in Dubai free zones is straightforward and obtaining an e-commerce license is a hassle-free process. The investors need to consider the e-commerce packages offered by the different free zones and the facilities they offer. Apply with the right documents and fee with the help of reputed business setup services in Dubai. The free zone authority after verifying the documents will issue the e-commerce license.
2. Product Selling
Unlike in the mainland, the free zones are not allowed to trade directly in the UAE market. Since the main purpose of free zones is imports and re-exports, the investors are only allowed to trade within the free zones only as per the regulations. However, while setting up an e-commerce business in the free zones, the entrepreneurs can sign a contract with a supplier if they want to sell the products in the UAE market. In such a case, the e-commerce business would only function as an online platform that facilitates the selling of consumer goods.
3. Warehouse Requirement for the Business
The free zones in Dubai offer the flexi desk facilities in which the e-commerce companies can operate with ease. The need for warehouses can be eliminated if the company has reached an agreement with the supplier. The goods can be stored in the warehouse of the supplier. The companies, therefore, can focus on other requirements like web development while running their business within the flexi desk facility offered by the Dubai free zones.
4. Product Registration for E-commerce Companies
The e-commerce companies operating within the free zones in Dubai need not bother about the requirement of product registration with Dubai Municipality or health authorities. This is because the company has already signed a contract with the supplier and the responsibility of dealing with the process of product registration in Dubai rests with the supplier.
How Business Setup Services in Dubai Help E-commerce Investors?
The process of business setup in Dubai may appear straightforward on paper but a foreign investor may find it tough as knowledge in local laws and regulations is mandatory. Flouting the regulations would lead to hefty penalties and create a bad image with the authorities and the banks. To avoid such trouble, hire the best business setup services in Dubai who assist the investors in every stage of company formation in Dubai right from registration to incorporation. The best business setup consultants in Dubai are equipped with a sound knowledge of the laws and regulations and execute all the documentation in line with the regulations. Hiring reputed business setup services in Dubai eases up the business setup process and entrepreneurs can achieve their business goals in the peace of mind.