Online shopping is a common activity for the majority of the population, with quick delivery services contributing to the popularity. The UAE e-commerce industry crossed AED 32 billion in 2024, and is projected to increase to AED 50 billion by 2029. Knowing how to start an online business in Dubai could be a lucrative opportunity for anyone interested in tapping into the local market.
Starting a business in the UAE offers foreigners many advantages like:
- Complete ownership and full profit repatriation
- Low corporate tax and VAT
- No income tax
- Government incentives
- Simplified business setup procedure
- Multiple business locations
How Do You Start an Online Business: The Steps
The main setup process for starting an online business is quite similar to any other type of company in the UAE. You will have to choose a jurisdiction and company structure, get a trade license and a visa, and open a bank account. A business setup consultant will be able to guide you through the process.
Before you start the application process, you will need to make some important decisions about your online business in Dubai:
- What type of business activity are you going to conduct?
- What products or services are you going to sell?
- Are you going into business with a partner or by yourself?
- What’s your business name?
- What’s your brand going to look like?
- Are you going to need suppliers? Warehouse space?
- Who are your target customers?
1. Choose a Jurisdiction
The main question you must ask yourself before starting an online business is: free zone or mainland? Both jurisdictions have their own advantages, so it all depends on what you’re looking for.
Free zones:
- 100% ownership
- Minimal tax obligations
- Simpler business setup process
- Budget-friendly
Mainland:
- 100% ownership
- More government collaboration opportunities
- Easier to expand operations
- Access to local and international markets
2. Apply for a Trade License
Whether you’re choosing business setup in a free zone or a mainland company setup, you will need to apply for a trade license. The e-commerce license is generally the go-to license for online businesses in Dubai. There are a few types of e-commerce licenses.
| Portal license | For starting an e-commerce platform |
| Virtual company license | For non-residents offering advertising, design, programing and printing services |
| E-trader license | For GCC nationals and certain UAE residents setting up sole establishments |
If you’re applying for a free zone company, you must submit your application to the relevant free zone authority. If it’s a mainland license, the Department of Economic Development (DED) will handle your application, regardless of the Emirate you’re applying from.
You will need to prepare the following documents:
- Trade name reservation
- Trade license application
- Passport copy, passport size photo
- Residence proof (Tenancy contract, utility bill)
3. Apply for Visa
You will need a residence permit to start an online business in Dubai. Residence visa holders can sponsor their family to live in the UAE for as long as their visa is valid. You will only get a residence visa once your trade license is issued.
4. Open a Bank Account
Getting a bank account in the UAE could get complicated, especially if you’re in a free zone. Working with an expert who specializes in e-commerce businesses in Dubai will help you find a bank that suits your needs.
How Much Will it Cost to Set Up an Online Business in Dubai?
The cost of an online business in Dubai depends on factors like your products, business location, number of owners and employees, warehouse and storage requirements, marketing costs, trade license, and business activity. You can expect to pay around AED 25,000 to AED 35,000 to start an online business in Dubai.
Best Online Business Ideas For Dubai
If you’re interested in setting up an online business, here are some business ideas to help get you started:
- Dropshipping
- Consulting
- Marketing
- Tutoring
- Fitness coaching
- Retail
- Technology solutions
- Mental health services
Let Momentum Help You Start an Online Business in Dubai
Momentum is a leading business setup company in Dubai housing expert consultants who offer an end-to-end solution for company formation in Dubai and all across the UAE. We have in-depth, local knowledge of both free zone and mainland business regulations and can simplify your business setup.
