What is the best trade zone to incorporate an e-commerce company, is it DED or TECOM (Dubai Internet CIty)? What are the pros and cons of each? When they say that there is a minimum share capital, does this need to be fully paid up?
Hi Friends,I would like to know what are the regulatory issues when it comes to opening a store in the UAE?In which regulatory zone is it best to open up your company - DED, TECOM, RAK or JAFZA. What are the pros and cons of each one.If a company operates a restaurant or owns a store and has a license for that, does it need a separate one to sell on the net?What deposits are required to sell on line by the Government? What are the regulatory issues that need to be over come?Say I am making clothes or cakes at home, do I need a business license to sell them on line?Is there anything else one needs to know when setting up an ecommerce site?Thank you- Hi Arun,I've used the questions that you emailed me to form a set of responses:What is the best trade zone to incorporate an e-commerce company, is it DED or TECOM (Dubai Internet CIty)? What are the pros and cons of each? When they say that there is a minimum share capital, does this need to be fully paid up?This is a tough one to answer as there are a lot of pros and cons depending on the nature of your business.Dubai License (DED) - Pros: Cheaper than any other option in terms of pure costs, can locate just about anywhere in the city that isn't a free zone. Cons: Need a local sponsor.Free Zones: Pros: Cluster effect with other similar firms, 100% ownership. Cons: More expensive than a city license, need to take on real estate within a given zone, real estate costs tend to be more expensive than locating in the city.If you're dealing with physical goods and your market is within the UAE, it's easier to go with a city license. Technically, you're not allowed to store and sell physical goods from free zones such as Dubai Internet City. JAFZA and DAFZA are two exceptions to this, but you'll end up needing to clear cargo through customs, paying customs duties and so on in order to get them into the city / country for sale.If you're running a non physical goods e-commerce business, it may be worth exploring Virtuzone, RAK Freezone and Creative City as potential lower cost options.In terms of minimum share capital, to the best of my knowledge that needs to be paid up. I am aware of loop holes where firms show that the capital is available and then move it out afterwards. On occasion, these funds are lent to them at a cost.Are there any deposits that are required by the Government for an ecommerce site? Is there anything required by the Government? What are the other costs involved in simply starting up an ecommerce website? I heard that a Million AED deposit is required, which I can't believe it true. Is any deposit actually required by the Government or just by the payment gateways?Not as far as I know. We haven't payed any deposits at all. As far as I know, you just need to cover the activities / products you wish to sell in terms of the activities on your license, like you would for any other business. If you're trading in multiple categories, a General Trading license would work best.I know that there is an E-Commerce license category available, but I haven't come across anyone using it yet. I'm not certain what it does or does not cover.In terms of payment gateway deposits, it's actually a deposit with your merchant account provider. This is activity dependent - as some product ranges are more high risk. They use the deposit to cover any future chargebacks. It can range up to USD 50K.If I have a trade license for a restaurant, do I need a separate one to start selling online.I think you'll need at least a trading license, as I don't think your restaurant license will cover selling products other than food from your outlet? It would be best to inquire directly with the relevant authorities.Can I sell online as a sole trader or in a personal capacity or is a trade license always required? If someone were to create a payment gateway using cash on delivery or paypal, would this circumvent the requirement to have a trade licence since with these payment gateways none is required to set up? In this case I am think about someone who provides bakery services from home.There have been a few changes to selling from home, however these regulations have tended to apply only to Emiratis. To the best of my knowledge, it would be illegal to operate a business, even an e-commerce business without appropriate licensing.PayPal may grant you a business account, but at some point they will engage in due diligence to determine whether or not you're licensed for your activities. It's generally to prevent fraud and to ensure that they've got appropriate KYC in place. A local acquirer / merchant account provider will not give you a merchant account and / or payment gateway service without a trade license in place.In terms of home baked goods - this happens a lot, and if the volumes are small, generally it stays under the radar. However, again it remains illegal to run a business from your home. Every business, no matter what it's size may be needs to be licensed and have a premises.
0 comments:
Post a Comment