Businesses are expensive to set up and get off the ground. However, there is a business model that offers low-risk, low-cash startup fees, and potentially high levels of rewards.
An online business is ideal for you if those are your aims. If you’re looking to set up a business like this, the dropshipping business model is perfect for you.
Dubai is a fantastic destination for entrepreneurs and investors. The country boasts a world-class transport infrastructure, a central location for Africa, Europe and the Middle East, business-friendly laws, a 0% corporate and personal income tax rate, and 90% of the population is made up of foreign nationals.
This article will cover the ins and outs of dropshipping, the steps and costs to get a dropshipping license in Dubai, documents needed to open a dropshipping business in the United Arab Emirates, and the type of business license needed for a dropshipping license in Dubai.
Dropshipping: What is it?
As we’ve already mentioned, dropshipping is a business model. As the seller, you are an online store owner – but you don’t stock any products. The product or physical item is shipped directly from a dropshipping company to the customer.
Dropshipping companies don’t hold any stock. They ship products on an order-by-order basis. This means as a dropshipping company in Dubai, you don’t need any warehouse space to keep an inventory of what you’re selling online.
The dropshipping business model enables the company owners to focus on marketing their business and products.
Does this sound like the business setup for you? By contacting our expert team at Trade License Zone, we’ll guide you on company formation, your business license application and visa application to help your business in the UAE to trade as soon as possible.
Steps to Get a Dropshipping License in Dubai
If you’re wondering how to start a dropshipping business in Dubai, UAE, we’ve brought you 5 streamlined steps to build your dropshipping company successfully.
Step #1: Partner with Trade License Zone
Partnering with a local business setup agency such as Trade License Zone is the first step in starting a dropshipping business in Dubai. As part of the United Arab Emirates’ economic development plans, it has implemented innovative Free Zones to stimulate and support industries with specific regulations. By choosing the right legal structure and business model, you can apply for a trade license in a relevant Dubai Free Zone business centre for maximum benefits and local government support.
Our specialists at Trade License Zone will manage all aspects of your dropshipping business’s company registration and setup process and guide you on the various governmental and municipal trade regulations and commercial activities for dropshipping in the UAE.
Step #2: Determining your Business Activities
Every business in Dubai must list its business activities in order to get a valid trade license. There are over 2000 business activities from which to choose. To get the right business license – no matter your industry – you must specify the commercial activities your business will operate. Commercial companies’ laws in the UAE stringently regulate business activities – and all businesses in the UAE must be registered and licensed, or they can be heavily fined or lose their license entirely.
Step #3: Choosing the Right Business Setup
The United Arab Emirates created its trade zones to better manage and support specific industry types. The two main classes of trade zones in the UAE are Mainland Companies and Free Zone Companies.
A Mainland Company allows the business owner to trade within Dubai and across the UAE, but you’re limited to only owning 49% of the business’s shares. The laws require a UAE national partner to own a 51% share of all foreigner-owned Mainland Companies.
A Free Zone Company is set up in one of Dubai’s over 40 special economic zones. These Free Zones offer benefits to foreign entrepreneurs such as 100% business ownership and the authority to repatriate all the profits.
The most popular type of business structure for dropshipping companies is a Free Zone Company. Contact us to help you choose the best free zone for your dropshipping business in Dubai.
It is important to consult company formation specialists such as Trade License Zone to make sure your chosen business model, activities, and business structure align. All businesses must register with the Dubai Department of Economic Development (DED).
Step #4: Choosing a Company Name
Trade License Zone can help you choose and register your dropshipping business name with the UAE’s Registry Office. The business name must adhere to the UAE’s strict naming regulations. Business names cannot include any offensive or blasphemous language, nor any references to Allah or Islam. If you wish to include your name in your company name, you must use it in full rather than just your surname or initials. We’ll also check that your chosen name is available to be registered.
Step #5: Applying for the Right Business License
At the same time, you need to determine the type of trade license for your new startup. To do business in the UAE, you’ll need to register for a new company and apply for a trade license for your business activity. Consult with the specialists at Trade License Zone to guide you on applying for the right business license. This stage is best handled with the support of a professional team to avoid any delays or errors in the paperwork and forms. Once the application form is completed, it usually takes about a week for a successful business license to be granted.
Documents Required to Open a Dropshipping Business in Dubai
In applying for a valid trade license, you’ll need to submit the following documents:
- Proof of ID and address for directors and shareholders
- Passport copies for shareholders and directors
- Copy of trade name confirmation
- Memorandum of Association (MOA)
- Articles of Association (AOA)
Dropshipping License Cost in Dubai, UAE
A dropshipping license cost in Dubai can be up to AED 15,000. Remember that it is a legal requirement of all businesses in the UAE to register and hold a relevant business license to operate within the UAE.
To operate your dropshipping business in Dubai, you’ll need an e-commerce license. This UAE trade license is relatively straightforward to get – if you know what you’re doing, that is. We at Trade License Zone will help you to obtain licenses for your dropshipping company.
Is dropshipping allowed in Dubai?
Dropshipping businesses are allowed to operate in Dubai and across the UAE as long as the business owners hold the right business license and visas.
Do I need a business license for dropshipping in Dubai?
All businesses in Dubai must hold a valid business license to trade in the UAE. This regulation includes dropshipping merchants, dropshipping suppliers and dropshipping businesses across the UAE.
Working with Trade License Zone
Business setup in the UAE can be a complex process – even if you think you know what you’re doing. When you partner with Trade License Zone, we will save you from unnecessary delays or rejections and make the entire process a streamlined one.
When you work with the specialists at Trade License Zone, all you need to provide is some basic documentation and a little information about the nature of your business. Then, sit back and let the experts take care of the rest – managing your trade license and visa applications, communicating with all relevant departments and authorities, and reporting back when you’re ready to trade. It really is that simple.