The popularity of online shopping transactions on the Internet has increased dramatically in the past decade, and these days many consumers favour e-commerce over traditional methods of shopping.
Many companies that failed to invest in technology suffered severe business disruption during the Corona pandemic and the subsequent periods of enforced social distancing and movement restrictions.
This knowledge has prompted many companies to accelerate the introduction of online shopping applications to maintain their presence in the market, which in turn further contributed to an increase in the diversity of electronic payment channels and home delivery services across the world.
The E-Commerce License in Dubai
The Department of Economic Development in Dubai, represented by the commercial registration and licensing sector, recently launched the “Electronic Merchant” program. This program is the first of its kind in the Middle East and deals with licensing commercial projects which are managed via social media by citizens of the UAE and the Gulf Cooperation Council countries residing in the emirate of Dubai.
This initiative was developed to provide an effective mechanism to regulate the practice of business through social networking sites in Dubai and ensure that business is conducted in a transparent and neutral manner.
To this end, the Dubai Electronic Transaction and Commerce Law No. (2) of 2002 (the “Dubai E-Commerce Law”) was issued.
Article 3 of the Dubai E-Commerce Law sets out the objectives of the law as follows:
- To protect the rights of persons doing business electronically and determine their obligations.
- Facilitation of electronic correspondence with reliable electronic records.
- Removing barriers to e-commerce and other electronic transactions.
- To Facilitate and efficiently transfer electronic documents to government agencies and institutions.
- The reduction of fraud in electronic correspondence, thus reducing the chances of fraud in e-commerce and other electronic transactions.
- The development of unified rules, regulations and standards, all related to documentation and safety of electronic correspondence.
- To enhance public confidence in the integrity and correctness of electronic transactions, correspondence and records.
- To promote the development of e-commerce and other transactions locally and internally by using electronic signatures.
Conditions for obtaining an E-Commerce License
- Only one license will be issued per applicant.
- The Applicant must be a citizen of the United Arab Emirates, a citizen of the Gulf Cooperation Council, and a resident of the Emirate of Dubai.
- The applicant must be at least 18 years old.
- It is not possible to open a shop with an E-Commerce license.
- Work Visas cannot be issued for the license.
- The right of legal recourse rests with the individual himself.
Electronic Trade License from Abu Dhabi (Abu Dhabi Merchant)
The Abu Dhabi Merchant License, issued by the Department of Economic Development in Abu Dhabi, gives entrepreneurs the opportunity to practice economic activities through their websites and social media channels.
The Abu Dhabi Merchant License was launched in 2017 exclusively for UAE citizens, with the aim of enabling them to establish their companies within a scope of 100 economic activities. One of the most prolific advantages of this license was that it negated the need to obtain physical headquarters or offices for companies, and was issued quickly and easily, via electronic means, through the smart entry system on the department’s website.
In 2018, the Abu Dhabi Department of Economic Development expanded the scope of the Abu Dhabi Merchant License by further making it available to both citizens of the Gulf Cooperation Council countries, and foreign investors who are residents of the UAE. The economic activities covered by the license were also expanded to include more than 1057 economic activities.
The Department of Economic Development has also expanded the possible legal forms of companies established under the license to include:
- Individual Foundation.
- Single Person Company LLC | For citizens of the state and citizens of the Gulf Cooperation Council countries.
- Limited Liability Company LLC. For residents as partners with the citizens of the country.
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Dealer License Program from Dubai
The “Dealer License”, launched by the Dubai Economic Department, allows entrepreneurs from the UAE and citizens of the Gulf Cooperation Council countries residing in Dubai, to engage in free business and domestic trade. The Dealer license further provides the ability to trade through social networking sites.
A Dealer License can be obtained quickly and easily online, by creating an account and registering on the merchant program website.
Conditions for obtaining a Dealer License
- It is not possible to register more than one person in a dealer license, nor can work visas be issued on the license.
- The license requires the existence of a physical address in the emirate and a ‘Makani’ number.
Accreditation License from Sharjah
An “Accreditation License”, issued by the Sharjah Economic Development Department, allows owners of the home and electronic companies, who are UAE citizens living in the Emirate of Sharjah to conduct their businesses from home or via social media networks. The license is available to men and women over the age of 18.
Virtual Dealer License from Ras Al Khaimah
The Department of Economic Development in Ras Al Khaimah launched the “Virtual Trader” initiative to support entrepreneurs that are managed through social media channels, websites, and smart applications.
The Virtual Merchant License is available for all commercial projects that are managed through social networking sites, websites and smart applications by UAE citizens and those of similar status who reside in Ras Al Khaimah, and who use these methods as a means of conducting their business from home.
