In the world of fashion, Dubai has its own name. Dubai is famous for introducing new trends and styles that are followed all over the world. It is also an attractive destination for fashion enthusiasts, as people from around the globe love to attend Dubai Fashion Week every year. All these factors make it a great place to start a clothing business in Dubai.
The population of Dubai consists of locals and expats from all over the world, belonging to different cultures. People show a strong interest in trying different trends and styles, making selling clothes highly profitable. But the question arises: How to start an online clothing business in Dubai?
This article will provide a complete guide on how to sell clothes online in Dubai and explain the requirements for starting an online clothing business.
Procedure to Obtain a General Trade License
If you are wondering how to sell clothes online in Dubai and how to obtain a Trading License, don’t worry! Here is a complete guide to help you get started.
- Select a name for your company according to the rules set by the Department of Economic Development.
- Choose the business activities you want to pursue.
- Choose the legal structure of the company. It can be mainland or Freezone.
- For initial approval, submit your application to DED.
- Gather all the documents required for smooth processing.
- Rent a premise even though your business is online but it is mandatory for business registration, legal documentation, and licensing purposes.
- To make your rental agreement official and legal, get it approved from Ejari.
- To get final approval from the Department of Economic Development, submit all the documents to set up your business.
Online Clothing Business In UAE
If you are interested in starting a clothing business and want to know how to start online clothing business in UAE, follow these steps to fulfill the requirements
Legal Requirements
The basic requirement is a trading license from the Department of Economic Development. But before applying for a trading license, you have to fulfill the following legal requirements.
Choose Trade Name
Choosing a name for your clothing business is an important step as the trade name gives the idea of the nature of your business. It might be possible that you come up with three to four different names, ensure the trade name is not already in use and not starting with the words universal and international.
The authority will compare it with the provided criteria and after that, you can choose your favorite one from the approved ones.
Choose Legal Structure
For trading, license is mandatory in the UAE and in the case of online business, an E-commerce License is required. Different types of E-commerce licenses are available and you can choose mainland or free zone jurisdiction.
If you choose mainland, you are allowed to sell your products directly to customers but you need a local partner and an office space. However, for Freezone, you don’t need any office or local partner. It provides you the opportunity of 100% ownership, unlike the mainland in which the local partner holds a 51% share.
Keep in mind that the requirements, rules regulations, and eligibility criteria are also different in the mainland and free. To run your business smoothly, it is necessary to adhere to the legal requirements of the selected area.
Business Plan
In business, planning is everything as it clears the ideas, goals, and ways to achieve them. Practical calculations of the budget required, monthly cost, and possible risks. Also, insight into BEP (Break Even Point) can give an idea of when your business will start making a profit.
Don’t forget to mention online store in your business plan and the activities you wish to pursue in UAE.
Choose Clothing Niche
Choosing a clothing niche is an important step, ensure that you choose a niche that has high demand and potential for profitability. Although clothing is a profitable business in Dubai but it has high competition as well.
That’s why it is important to understand the market trend, customers’ demand, and marketing tactics. Build your strong identity to compete the competitors.
Choose a Supplier
As it is a clothing business, you have to narrow down supply vendors. It is recommended to choose a vendor who is an expert, offers good quality products, and has a reasonable rate. In Dubai, it is easy to find such suppliers as it is close to countries that produce cloth such as India, Pakistan, and China.
Benefits of Online Clothing Business
There are multiple benefits of starting a clothing business in Dubai. The main benefits are mentioned below
Tax Advantage
One of the main advantages of starting a clothing business in Dubai is the tax advantage. There is no need to pay value-added taxes or withhold taxes or any other tax, as Dubai is 100% tax-free. This kind of tax system encourages people from all over the world to invest here and get a complete return.
Affordable License
Another good thing is that the trading license for online clothing business is not expensive. Entrepreneurs can easily afford it.
Easy Processing
Online clothing business is an easy process as compared to traditional stores and shops. Also setting up an online store is quick and eliminates the need for labor. By using different social media marketing strategies, online businesses can grow rapidly with less effort and cost.
Complete Ownership
Whether you choose the Mainland or Free Zone, online clothing business offers complete ownership to investors. You only require a local service agent that helps in obtaining a license for online business.
Safe Environment
In business, not only profit but also peace of mind is required. Dubai’s low crime rate makes it a suitable choice for registering business. A lot of entrepreneurs are attracted because of its reputation and security system.
Conclusion
At the end of this article, we hope you got the answer to how to start online clothing business in Dubai. Dubai is the ideal location to start a clothing business as its population is diverse and loves to try new fashion trends.
Like every other business, online clothing business has some stringent requirements. Obtaining a trading license is mandatory and after that, you can run your business legally.
Obtaining a trading license is tricky and for that, you can Contact Al Riyady. Our consultants can provide you complete guidance and can also help you establish a business in mainland or Freezone Dubai.