The government of UAE keeps a strict check on commercial activities that are being carried out in the UAE. Whether it is a multinational company or just a local start-up, firms have to follow rules and maintain compliance with regulation and failure to do so can result into the companies being censured and fined by their respective regulators.
E-commerce is growing in the UAE just like in the rest of the world. Life is getting busier by the day and people prefer to order even the basic necessities like milk and bread from e-commerce websites and social media pages. These e-commerce platforms have created a market of their own, which can be accessed through your phone or computer. The government in the UAE identifies this market as one that requires regulation as well. Regulation is aimed not only for the government to have a record of businesses operating in the UAE but also to maintain quality of products and services being offered to the residents of the country.
In fact, the government shut down e-commerce platforms that were not registered, with the help of the Telecommunication Regulatory Authority.
Risk associated to unregistered e-commerce businesses
Even those vendors who operate from their home to provide products and services to others are now at risk of being heavily fined if they have not completed their company formation UAE process. Even though such businesses can commonly be found operating in countries like China, Pakistan, India and Bangladesh, without the need to be registered, the UAE does not show any leniency.
Penalties as high as AED 500,000 may have to be paid by an e-commerce business in Dubai if it does not have the appropriate license. Whether they use social media or communication platforms like Whatsapp, Facebook and Instagram, vendors will no longer find it easy to sell their items.
If these businesses are not properly licenced, they cannot accept card payments because they are unable to procure payment terminals. If customers of such businesses face health issues, the businesses could find themselves in a difficult position as they are unregulated and therefore, could be exposed to the risk of being penalized for other violations of law as well.
What should you do?
The law of the UAE requires every business in Dubai, big or small, to have a valid license from the Department of Economic Development.
Residents who operate unregistered e-commerce businesses would need to set up a company and obtain the e-commerce licence from the DED in order to sell their products online. The regulator will determine the requirements, conditions, documents and approvals that must be obtained for issuing the licences. Residents of Abu Dhabi would need to acquire the e-commerce licence from Abu Dhabi Department of Economic Development to run an online business.
KWS Middle East, a business setup in Dubai consultancy with experience of serving a number of clients with their unique problems, can help you obtain an e-commerce business license. All you need to do is consult one of our experts and provide them with complete information as to what you plan to do. Our seasoned consultants will then provide you information on the requirements for company formation UAE and on obtaining an e-commerce license. KWS Middle East can even help you organize all important documents and can get the whole procedure done for you. The consultancy will also provide your business setup in Dubai with support services like product and trademark registration, among other things.
Want to get your e-commerce business registered? Give us a call or just send us an email today.