Question

Part I

Each student individually is required to present a case in the class on an eCommerce website from UAE.

Questions:

• Identify the business model used by your website:
  • Ex: The site generates income based on the sale of specific classified ads. This corresponds to the Advertising model.
• What do you like about the site? What do you dislike about it? Student responses will vary.
• What are some of the risks and limitations of using this site?
  • Examples of risks: Illegal/stolen goods o Examples of limitations: Limited search options ▪ Identify the B2B and B2C transactions in this case.
  • Ex: Godiva.com sells both to individuals and corporations through the website.
• Why did “your presented case” decide to sell online? List the EC drivers in this case.
  • Ex: The Godiva was looking for an avenue to increase sales. In 1994 the major drivers for increased sales were user groups. Targeting these users with the Web site was key to increasing sales.

• How user-friendly is your selected site?
  • Godiva site appears to be very user-friendly, providing an easy shopping experience coupled with a large amount of information.

Part II

You are going to establish your own online business in UAE.

You are requested to write down all steps needed to establish your business (permits, license, taxes and all requirements from A – Z)

Answer 1

In order to establish owned online business in UAE, below mentioned will be essential:

The process of registering a company in the free zone of Dubai and obtaining an online business license here depends on the type of commerce and the specific free zone. The general trading license and the e-commerce trading license are the easiest and fastest to get. Over 80% of companies have such licenses and are engaged in trade in various groups of goods.

In general, setting up an online business in Dubai begins with filing an application for a license for e-commerce. It is this license that makes it possible to conduct business and sell products specified in the license.

1. Choosing the right type of a company
There are several available options here. You can register a limited liability company, a branch of a foreign parent company, a representative office, and some other types of companies. Depending on your plans and potential access to other markets, one or another option will be optimal. The most common types of companies in Dubai are a limited company, and a subsidiary, as they have an important set of advantages. Free zones offer different conditions and preferences for the business registered here.

2. The choice of a company registration place
There are over 20 free trade zones in Dubai itself, in addition, they are some in other Emirates: Abu Dhabi, Ras Al Khaimah, Ajman, etc. Besides, you must choose a place where to get a license. Dubai offers two options, the first is the registration of a company in the free zone and the second one is the registration of a company outside the free zones. Registering a company outside the free zones is a good solution if you plan to conduct business in the region (for such companies there are no restrictions on the importation and exportation of goods and no import/export fees). However, unlike companies in free zones, foreigners must find a local partner who will own 51% of the shares. This requirement is expected to be abolished in 2019.

In free zones, it is not permitted to trade outside the free zones, but the costs are lower.

Thus, when choosing a place of registration, it is necessary to consider all these factors.

3. Registration of the trading company name
Choosing the name of the online store is an important step because this name should be memorable. When registering, you will need to provide several alternatives in case the name is already used.

4. Choosing a physical office in Dubai
Although an online store has no premises, like a classic store, there should be legal address (office), as the Dubai authorities oblige e-commerce companies to have one.

5. License approval
After completing all the above points, it will take up to 7 days to obtain a license (depending on the registering authority).

6. Opening a bank account in the UAE
Any company requires a bank account, so you will need to open it. Local banks offer many good opportunities for opening an account, including for offshore companies.