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Dropshipping In The UAE For Beginners: All You Need To Know

By Alexandra B.

Dropshipping In The UAE For Beginners: All You Need To Know

You often ask us whether the Middle East is a business-friendly region and what you need to do to start dropshipping in the UAE. In this article, we’ve tried to collect the most useful tips and pieces of advice related to this matter, and answer all your questions!

The United Arab Emirates has grown into one of the most digital-friendly countries in the world. Almost 100% of its population is actively using the Internet. They enjoy using social media, write reviews and spend at least 8(!) hours a day online.

Besides that, according to statistics, in 2017, the value of eCommerce sales in the UAE was $16.1 billion, whereas in 2018 it increased to 20 billion US dollars. As you can see, the eCommerce market in the UAE is developing rapidly and has a good potential.   

So, if you’ve decided to start an eCommerce business in this country, this is the right choice!

And we’ll tell you about the main pros and cons of dropshipping in the UAE that you must consider seriously before starting a business.

Table Of Contents

Pros of dropshipping in the UAE if you’re a local resident

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When you live in a country, you know a lot about its culture, economy, traditions, mentality, buying preferences and limitations, etc. So, you have some advantages over other eCommerce entrepreneurs:

You understand the psychology of your customers better

You know, we all are unique and different. However, there might be some specific characteristics that generally belong to the people of one particular country and have nothing in common with residents of other countries.

These cultural differences may significantly affect the way people perceive the world around them and their usual response to different situations. For example, some marketing tricks that work well with the people living in America may be absolutely useless when you’re targeting an audience in Asia.

So if you live in the UAE, you know what your fellow citizens like and how they feel about different marketing strategies, tips, tricks, etc.  

You know the local shopping trends inside out

Another advantage you have over your competitors living outside the UAE is related to the knowledge of your local market and understanding what’s in high demand there.

You know what products are difficult to find in brick and mortar stores in the UAE and you can take advantage of it.

If you don’t, just make some time to go shopping and look at the product range of the stores critically.

You are good at legal issues

Starting any type of business is usually a tough thing for most non-residents because they need to examine the laws of the target country and grasp them.

When you’re a resident, you usually don’t face this issue.

Even if you don’t have a law degree, you know what is forbidden or allowed in your country and what legal documents you should study to get the necessary information.

As a rule, most local documents are in the official language of the country, so you won’t have any problems when reading them.

Cons of starting a dropshipping business in the UAE for the residents

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Let’s take a look at the disadvantages of starting an eCommerce business in the UAE:

You need a trade license to start a business

To start selling something in the UAE, you need to register your business officially and get a business trade license. This is a mandatory requirement of the UAE government.  

Unfortunately, this license is expensive. It will cost you $4000 or more. Its cost depends on many factors such as the region of the business establishment, the type of business activities, the number of partnerships, etc.

If you really want to do business in the UAE, we strongly advise you to get a license. Otherwise, you can be fined and obliged to pay from $1,500 to $15,000.

However, if this way of starting a business isn’t appropriate for you, you can try to register your business in the USA. We have a great article where we explain how to do it in detail. Feel free to read it!

ePacket delivery isn’t available in the UAE

Another issue you may face when dropshipping in the UAE is that you can’t use the ePacket delivery. This shipping method isn’t available in the UAE.

At first glance, this is a big problem. But in fact, it is not.

AliExpress has recently introduced a great service called AliExpress Direct. This is a premium delivery which is developed specifically for customers in the UAE and in Saudi Arabia.

However, not all the products placed on AliExpress can be delivered via this service – they must meet certain requirements such as having a high quality, for example.  

This is a door-to-door delivery, so your customers won’t need to go to the post office. Besides that, if they’re not at home, a courier will make a second delivery attempt at another time.

Dropshipping to the UAE from a foreign country

Now you know the reasons to start a dropshipping business while living in the UAE, and the possible limitations you may face. But what if you live in another country and just want to target this market? What should you do in this case?

Actually, nothing special.

As you know, you can start a dropshipping business from any destination in the world. Therefore, when launching a store, you will focus on the laws of your own country with regard to the business registration and taxation.

Probably, you won’t know your target audience as well as the UAE residents, but this is not a big deal. Visit forums, discussion boards and social media communities related to this country and read as much information about it as possible.

In some time you’ll get an idea of the culture of this country, the typical customer behavior and buyers’ preferences. Besides that, you will learn more about what your target audience likes and what types of products are popular with the country population.

As you can see, targeting the UAE market won’t have any difference. You will do the same things that all dropshippers do when launching their business.

Now you know what you should do to start dropshipping in the UAE. If you have any questions, feel free to leave a comment below!

 

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By Alexandra B.
Alexandra is a content creator and a huge fan of blogging. She strongly believes in the power of words and likes writing in the casual and friendly tone.
26 Comments
Samir May 31, 2019 8:43:55

Great article Alexandra

I am from KSA which is considered the largest marketplace in the gulf. I would assume the same article applies to any one plan to start dropshipping from KSA. But, correct me if I am wrong, up to my knowledge that dropshipping has no borders nor it has legal requirements. I mean to say, that any individual can start selling from any where in the world with no need to register his online store at the local authorities. The only con i can see is when you start receiving your funds from Paypal or Payoneer directly to your account or visa card in large amount. Then a big question can be raised as from where are you getting this fund? As you know money transfer is being monitored worldwide. Else, I expect things to run normal and smooth.
I hope if you can write some thing about the virtual banks and the update as how to receive funds from payments made via the store.

    Akhtar Edroos July 16, 2019 4:02:43

    Great article! But you missed out one very important point. How does one get payment from customers online if most payment methods don’t work in the region? This is the first thing that needs to be understood. It also limits your option as you cannot use the regular AliDropship plugin. You can only use AliDropship WooCommerce plugin and you will need to get a payment gateway API from the local banks. Please mention this after doing your own research as this is a very crucial point during contemplating to start your own Dropshipping business.

Benaiah Hlebeya July 15, 2019 8:13:35

Hello Olga. Thank you for this information about series of drop shipping in other countries.
Is possible to get another research about drop shipping in South Africa and Africa. What are the advantages and disadvantages.

JM July 15, 2019 13:53:47

Hi Alexandra,

I am leaving here in UAE as expatriate and having a dropshipping store and introduce it to my friend and build his dropshipping both of us staying or working here in UAE. Same question with Samir do we need to get a license or registration here? the main issue is about the payment options and selling option from the seller. Are we going to face some problem or issue about dropshipping here eventhough we don’t have office and visible products to sell in the area. all was online, are they gonna check it and sue us? if its needed what are the other options and procedure for this matter.
Please give us some idea and information about this.
Thank you

    Abdullah July 20, 2019 8:14:02

    Yes for KSA and UAE you need a business license also register for VAT. If you run a business without these you can be fined , jailed and deported and your assets will be ceased. They will check your fiance transactions . They are very advanced and illegal business ventures are normally a front for money laundry… there is no second chances

    Olalekan Olagunju September 26, 2019 11:34:58

    Hi Olga,
    Thanks for your mails, can you kindly send the step-by-step process of how to start a drop shipping business to my email
    lekanolagunju89@gmail.com

Pieter Lutz Smuts July 20, 2019 16:14:17

I am living here in UAE as expatriate and would like to open drop shipping store . Same question with Samir do we need to get a license or registration here? the main issue is about the payment options and selling option from the seller. Are we going to face some problem or issue about dropshipping here eventhough we don’t have office and visible products to sell in the area. all was online, are they gonna check it and sue us? if its needed what are the other options and procedure for this matter.
Please give us some idea and information about this.
Thank you

Samuel Wachogi October 2, 2019 19:35:02

Hi. As a U.A.E. resident I am also very interested in Dropshipping. Kindly send me more information on how to meet regal requirements. Additionally, explain to me the regal requirements of an affiliate marketer. I will be grateful to receive more information in my email as well. Thank You.

    Olga L. October 3, 2019 8:27:36

    Hi, thank you very much for your interest! Our team will get in touch with you soon.

      Debbie October 25, 2019 15:54:52

      I have the same concerns and I don’t know where to go to get some information. Please clarify this topic, as we don’t want to be in troubles. Thanks.

Lindsey October 3, 2019 18:04:05

Hello,
I live in the UAE but originally from the UK. If I want to start a drop shipping business, can I register my business in the UK although I am living in the UAE. Please let me know.
Thanks
Lindsay

    Olga L. October 4, 2019 10:36:49

    Hi, thank you for your question!

    As the political situation in the UK currently stays uncertain, we strongly recommend you to advise a local lawyer.

Balaji October 7, 2019 15:33:40

I am an expat living in UAE. Can I register for a company in USA and still do drop shipping here in UAE/Other markets. Is this legally allowed. The funds from the sales in drop shipping can be transferred anywhere in the world from Payoneer? Please advise.

      halima bah November 29, 2019 19:11:57

      Hello Olga, thank you for your information .
      i’m living in UAE and i’m interesting about dropshiping. how can i contact you for the registration license

        Olga L. December 2, 2019 10:30:23

        Hi, thank you for your interest!

        Our team member will get in touch with you soon.

Bruna October 20, 2019 6:36:56

I’m living in UAE and starting my drop shipping business. Could you please advise which is the best way to receive payments here?

Zac October 24, 2019 3:41:48

Hi Olga. I would like to know about the same. I am currently not a resident of UAE. And i read ur article about opening up an llc in USA, if i do so, can i still deliver items to UAE without opening trade lic and will stripe allow residents of UAE pay via debit card?

    Olga L. October 24, 2019 9:11:33

    Hi, thank you for your question!

    It will be much more practical for you to dropship items to the USA: shipping time will be much shorter and more convenient for buyers, plus, they will have much more payment methods available.

roms October 28, 2019 8:08:33

Just wanted to ask I’ve got a NOC from my spouse, I’m a British expat. Will I still be required to obtain a licence to dropship to countries like South Korea, USA or the UK. As the individual doesn’t exactly hold the items, they just transfer from the shipping company to the client, we’re like the middle-man. But obviously we dropshippers will have an online store, were the clients/customers come and order their goods and then the shipping company takes care of it. will I still be in need of a licence?

Thank you!

    Olga L. October 29, 2019 5:53:29

    Hi, thank your your question!
    It’s not obligatory to have your business officially registered when you’re dropshipping. Some of our clients register their ventures as sole proprietorships, but only in some time after the business launch.

Yasmine November 20, 2019 18:22:21

Hi , thanks for the informations you shred on this post ,i am from Morocco and i would like to start working dropshiping in UAE , but the problem is that i did not get the possibility to find the company that will accept to make a COD for me ( cash on delivery ) , do you know any firm that can be charged by this mission in UAE ?

    Olga L. November 22, 2019 5:18:35

    Hi, thank you for your question!

    It will be much more convenient for you to run a dropshipping business if you ask your clients to make online payments, and not cash on delivery payments. For example, you can integrate PayTabs payment gateway (https://www.paytabs.com/en/) into your store: it works for both Morocco and the UAE.

Alain Reyes November 24, 2019 11:52:44

Hi, thanks for this article as it is applicable to me. I’m living in UAE as an expat. Few days ago, i bought a customized store from your website, for my drop shipping business and it is still under building process from your team. My question is, should i apply it for registration in UAE even though my target audience is from outside the country? If yes, could your team configure the store of the tax applicability of (5%) during sale. And, is tax of 5% applicable only to buyers within UAE purchased? Thank you.

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