E-commerce is a profitable business in the UAE and has the fastest-growing e-commerce market in the Middle East. A lot of free zones in the UAE offer a cost-effective company setup to initiate an e-commerce business. With an e-commerce permit in the free zones, businesses are not allowed to deal directly with customers in the mainland. However, e-commerce companies can sell the products of the suppliers already on the market. Sharjah Media City (Shams) free zone is one of the most popular free zones amongst young entrepreneurs. It allows the youngest age of the company shareholders you can own a business starting from the age of 19. This is a great benefit not available in any other Free Zones. Company employees can be as young as 18 years old, which is also quite unusual in comparison to other Free Zones.
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How to Obtain an E-Commerce Business License?
If you are looking to set up an online business in UAE, we have listed down the important steps that you have to execute for your e-commerce business setup.
Step 1: Decide the legal structure of your business whether to set up a Limited Liability Company, branch office, etc.
Step 2: Choose the area for your business whether to setup Free Zone or Mainland Company.
Step 3: Registration of trade name
Step 4: Application for commercial license
Step 5: Open business bank account
Step 6: Arrange lease for office premises
Starting an E-commerce Business in the SHAMS Free Zone
The SHAMS free zone authority is the competent authority that issues business licenses for e-commerce companies. After obtaining an e-commerce license, the entrepreneurs are provided with an online platform for the purchase and sale of products. The following things should be considered before setting up an e-commerce firm in the UAE free zones:
- Selling of Products
In the free zones, the companies are not allowed to sell products directly with the clients. However, the companies reach an agreement with the suppliers whose products are already available in the market. The free zone companies can list such products for sale on their shopping website. The need for a local distributor or agent is not required under the free zone e-commerce license because the companies are selling the products of suppliers.
- Warehouse Requirements
The e-commerce license can be obtained with the Flexi desk facility in the free zones and therefore the requirement of warehouse or office space is not mandatory. The suppliers with whom the company has an agreement will store the goods if the company is dealing with consumer products. Since there is no warehouse requirement, the operational cost for the e-commerce license will be less.
- Product Registration & Customs Duty
E-commerce companies are not responsible for the products registered with the concerned local authorities such as Municipalities and health authorities. This is because the companies will be dealing with the products that are already registered and the supplier performs the registration of the products. Similarly, the supplier already pays the customs duty and the e-commerce firm doesn’t need to pay 5% customs duty.
Why Company Set Up in Shams?
If the UAE’s free zones have caught your eye but you’re still considering your options, below is everything you need to know to help you decide if Shams free zone company setup is right for you.
Sharjah Media City’s incredibly straightforward two-step setup process makes it hugely popular with businesses of all sizes. First, you must meet with Shams officials to make your initial license application – the free zone issues Trading, Industrial, Service, and Holding licenses.
Open to A Broad Range of Business Activities
While its name might suggest a selective entrance policy, Shams is open to a broad range of business activities – over 200 in fact, including bookkeeping, HR, plumbing, publishing, hospitality, and wholesale. In fact, the free zone is not dominated by media companies at all, with many of its inhabitants doing business in trading activities. Shams is also home to a number of retailers, events and e-commerce companies, and management consultancies.
Flexible Office Options
As Shams is a relatively new free zone, it currently only offers Flexi-desk packages – these allow entrepreneurs use the free zone’s state-of-the-art business facilities on an ad-hoc basis. This will not always be the case, however. A free zone city is currently under construction and when complete it will feature a range of physical office spaces as well as studios, showrooms, and other creative units. The finished project will also include a residential boulevard, community plaza, and a series of restaurants, shops, and hotels.
Set-Up with Multiple Shareholders
While you have the option of applying for a Flexi-desk package alone at Shams, you certainly don’t have to. It is possible to establish your business with multiple shareholders – up to a maximum of 50 – which can be either individual, corporate entities, or a combination of the two.
Apply for Multiple Visas
Sharjah Media City’s flexible visa options make it easy for solo entrepreneurs and beyond. Currently, under the free zone’s Flexi-desk package it is possible to apply for up to six visas, for you, and your shareholders or employees.
Easy to Sponsor Dependants
As well as applying for employee visas, it’s also very straightforward to sponsor your dependants for their visa applications as well. Whether you require a visa for a spouse, child, maid or driver, the process is four straightforward stages: entry permit, status adjustment, a medical fitness test, then Emirates ID registration and visa stamping. Keep in mind, however, that this process is usually slightly easier for men than women, so as this is such an important process, it’s a good idea to get advice from an expert in setting up UAE free zone businesses to ensure that before starting an application, both you and those you are hoping to sponsor meet the entry criteria.
Easy to Arrange Your Corporate Bank Account
Once you’ve received your license and established your business in Shams, you’re ready to set up your corporate bank account. The application process is quick and simple. Free zone staff can advise on the best bank to suit your needs – and can even arrange meetings in-branch for you, should you wish. A company formation specialist can also provide the same service – or alternatively, you’re welcome to approach any local or international bank on your own.
Why Choose Riz & Mona Consultancy
Our experts at Riz & Mona Consultancy provides its services for business incorporation in UAE and we encourage you to contact us for developing a sound business model as well as all the documentation and legal work required to obtain a business license in any free zone in UAE.