Dubai recorded a 63 per cent surge in the number of e-commerce business licences issued in the first half of the year, as the pandemic-induced consumer demand for online shopping continues to grow.
Dubai Economy issued 3,243 DED Trader licences during the first six months of 2021, up from 1,989 licences in the same period a year ago, it said on Saturday.
IT topped the list of licensed activities, followed by ready-made garments, ladies tailoring and design, handicraft workshops, gents tailoring and design, food preparation, commercial brokerage, exhibitions and other professional services.
Male entrepreneurs accounted for the highest share, 63 per cent, of the total DED Trader licences issued during the first half of the year, the government body said.
This type of licence was first issued by the emirate’s Department of Economic Development's Business Registration and Licensing section in 2017, allowing business activities online and across social networking accounts.
The licence aims to promote e-commerce and economic competitiveness, drive digital transformation and facilitate commercial activities digitally.
The DED Trader licence can be obtained electronically on the invest.dubai.ae portal.
“Through DED Trader, Dubai Economy seeks to regulate and enhance the ease of doing business electronically, while also offering a platform that supports and develops trade as well as connects customers with traders,” the government body said. “The licensee cannot open a shop/store but can avail of three visas if the ownership is 100 per cent Emirati and legal liability falls on the licence holder.”
Dubai Economy is providing support to the DED Trader licence holders by signing partnerships with government and private sectors, providing facilities for their business growth as well as opening new channels by enhancing co-operation with major sales outlets.
It partnered with noon.com, the Dubai homegrown digital marketplace, to connect local start-ups with customers across the region through its Mahali digital store. Mahali by noon.com is a programme designed to offer Emirati start-ups with digital business support and expertise to grow their businesses online.
Dubai Economy has also partnered with MyFatoorah to facilitate e-payments for transactions related to DED Trader licences; Talabat to display and sell food items through its platform and with Akshaak marketplace to display and sell products of DED Trader licence holders online for free.
Opting for a DED Trader licence provides benefits such as Dubai Chamber membership, bank facilities, temporary employment services, participation in exhibitions and conferences, access to training workshops and the provision of workspace, the department said.
Online retailers are expanding their product ranges to attract customers during the Covid-19 pandemic.
The value of the UAE’s retail e-commerce market rose 53 per cent to a record $3.9 billion in 2020, largely driven by the digital shift in consumer shopping habits amid the Covid-19 pandemic, according to a June report by Dubai Chamber of Commerce and Industry. E-commerce accounted for 8 per cent of the UAE’s overall retail market last year, the report added.
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
