UAE E-Commerce Regulation and Licensing Requirements

We briefly discuss Law No. 14 of 2023 Concerning the Modern Technology-based Trade, which is the main UAE federal legislation governing e-commerce and licensing requirements for online traders in three emirates – Abu Dhabi, Dubai, and Sharjah.

The Gulf Cooperation Council (GCC) region has experienced significant growth in the e-commerce market, mirroring global trends and demonstrating substantial potential for future expansion. In the UAE, factors such as high per capita income, well-established logistics networks, and a growing, tech-savvy young population contribute to considerable spending potential. Per data from Statista, the UAE’s e-commerce market is projected to reach US$17 billion by 2025.

In line with the UAE’s strategic digital transformation and expanding e-commerce market, the government has introduced updated regulations for businesses selling online – focusing on streamlining the legislative environment, boosting competitiveness and facilitating entrepreneurs, and ensuring economic flexibility.

2023 UAE E-Commerce Law

The Federal Decree – Law No. 14 of 2023 on Modern Technology-based Trade governs e-commerce activities in the UAE, encompassing the sale and purchase of goods, services, and data via platforms like websites, e-platforms, social media, and apps. This law establishes a regulatory framework that applies to both digital and physical transactions conducted through modern technology.

Key criteria for e-commerce traders:

1. Legal compliance: Traders must possess legal capacity and adhere to all applicable legal, regulatory, professional, and technical requirements.
2. Permits and licenses: They must obtain necessary approvals, permits, and licenses from relevant authorities for conducting business through modern technology and physical stores.
3. Cybersecurity standards: Maintaining a secure technology infrastructure to support eCommerce services and complying with cybersecurity requirements to ensure consumer data security.

Selling requirements:

• Authorized goods and services: E-commerce traders can sell only goods and services approved for trade in the UAE, refraining from selling those requiring special approvals until obtained.
• Consumer protection: Adherence to promotional, marketing, and customer data sharing regulations, and prohibition of deceptive practices or false information about products or services.
• Invoicing: Providing detailed digital invoices for all purchases made via technological platforms.

Legal provisions:

The law also addresses:

• Licensing and regulation: Roles of entities regulating e-commerce and relationships between digital businesses.
• Consumer protection: Rights protection, return policies, insurance obligations, and logistics services.
• Payment gateways: Regulations governing digital payment gateways and dispute resolution mechanisms.

Understanding and compliance with these provisions are essential for navigating e-commerce operations in the UAE, ensuring legal and operational alignment with local regulations and consumer protection standards.

Applying for an online business license

To establish an online business in the UAE mainland, you must apply through the Department of Economic Development (DED) in the respective emirate. Additionally, all eTrade licenses require approval from the Telecommunications and Digital Government Regulatory Authority (TDRA), which regulates the e-commerce framework and transactions in the UAE. Ensure you obtain the necessary non-objection certificate from the TDRA to practice eTrade.

Abu Dhabi

The e-commerce license from the Abu Dhabi Department of Economic Development (ADDED) enables entrepreneurs to either add online trade activities to their existing licenses or obtain a new license to conduct business via websites and social media networks.

Holders of electronic trade licenses can utilize the e-commerce mark (eTajer) and a unique serial number for promotional purposes.

Development of the eTajer License:

• 2017: Launched exclusively for UAE nationals, covering 100 business activities that did not require a physical presence.
• 2018: Expanded to include all GCC nationals and UAE residents, under three legal forms:
  • Establishment: For Emiratis and GCC nationals
  • One-Person Company: For Emiratis and GCC nationals
  • Limited Liability Company: For residents in partnership with Emiratis

ADDED also increased the number of eligible activities covered by the license to 1,057, all exempt from the requirement of a physical presence or office.

Dubai

The eTrader license from Dubai Economy (DED) enables UAE nationals and GCC nationals residing in Dubai to conduct business activities through various social media networks.

Scope of the license:

• Single ownership: The eTrader license is available only to individual owners.
• Restrictions: eTrader license holders cannot open a physical store or issue visas. In case of legal disputes, the licensee will be solely responsible.
• Application process: To obtain an eTrader license, create a DED Trader account and complete the registration process.

Dubai CommerCity (DCC) Free Zone

Dubai CommerCity (DCC) is a specialized free zone designed to foster the growth of the e-commerce sector in the Middle East and North Africa (MENA) region. It offers a comprehensive ecosystem to support global and regional brands in establishing and operating their e-commerce businesses.

Key offerings:

• Support services: Includes pre- and post-setup assistance, fast and automated registration and licensing.
• E-commerce platform: Pre-integrated and pre-configured for seamless operations.
• Customer experience: Smart and centralized customer relationship management.
• Onsite services: Access to service providers such as payment gateways, marketing agencies, call centers, and web developers.
• Business support: Networking events, talent acquisition, development, and marketing management.

The business incentives are as follows:

• 100 percent foreign company ownership
• No corporate or income tax
• 100 percent repatriation of capital and profits

Key requirements and facilities:

• Investment: AED 3.2 billion
• Area: Approximately 2.1 million square feet
• Clusters: Three strategically designed clusters—Business, Logistics, and Social—focused on environmental and investment sustainability.
• Location: Just 5 minutes from Dubai International Airport and 45 minutes from Jebel Ali Free Zone.

EZDubai

Located in Dubai South, EZDubai is a comprehensive e-commerce ecosystem supporting B2B and B2C fulfilment for local, regional, and global markets.

Sharjah

The Sharjah Department of Economic Development (SEDD) offers the Eitimad license for home-based and electronic businesses operating through social networks. This license is available to UAE nationals aged 18 and above who reside in the emirate of Sharjah.

Scope of license:

• Staff recruitment: The Eitimad license does not permit the recruitment of employees.
• Eligibility: Only UAE nationals residing in Sharjah are eligible to apply.
• Application process: To apply, register as either a user or a seller.

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