E-commerce business in the UAE is rapidly evolving. According to a joint study by Dubai Economy and Visa, the UAE was recognized as the fastest growing e-commerce market in the Middle East and North Africa (MENA).In 2019 itself, e-commerce dealings in the UAE reached total $16 billion (Dh59 billion) and forecasted to grow 23 per cent annually till 2022.

This estimation was done before Covid-19 pandemic that hit the traditional old-style businesses heavily. E-commerce has been growing even faster as more and more businesses are considering moving online and more and more consumers are rapidly shifting to online shopping due to the global pandemic.

UAE residents also are among the top 10 globally when it comes to spending time on the internet and social media, averaging seven hours and 54 minutes daily. Can you imagine that we spend these many hours a day on social media!?While many countries rally to attract businesses and investments, there are number of benefits of starting an e-commerce business in UAE comparing to other jurisdictions.

In this article I will discuss about top 5 reasons why you should setup an e-commerce (online) business in the UAE.

1. Taxation

Number one reason is, of course, an attractive tax rates in the UAE. The country has introduced 5% value added tax since 2018. The standard VAT rate applies to supply of products or services locally or within GCC. For export of products or services, 0% VAT applies. Other than that, there is no tax for almost all types of business activities with exception of branches of international banks, hotels and oil and gas companies. In other words, there is:· No personal income tax;· No capital gains tax;· No withholding tax;· No corporate tax. Isn’t it amazing!? Maybe it sounds unbelievable, but it is true.

2. Infrastructure

If you are starting a business in UAE, then you don’t need to worry about the infrastructure. The UAE has the most advanced and modern infrastructure in the region. From high quality roads to international airports to telecommunications, the UAE is home to world class facilities. Moreover, there are plenty of high standard offices, retail shops, manufacturing units or warehouses. High class infrastructure supports economic growth and enables the development of business.

3. Convenient Location

Location, location, location. Being conveniently located between Europe, Asia and Africa, the UAE is an ideal place for any business including e-commerce. It has access both to the sea and has one of the largest airports in the world, Dubai International Airport. Thanks to its convenient location and largest sea and airports, UAE has an access to 2.5 billion consumer markets situated in the Gulf, Africa, Asia, CIS countries and Europe

.4. Giant E-commerce Platforms

Largest e-commerce platform, Amazon, has its presence in UAE since 2017 when it bought the homegrown e-commerce website Souq.com. Since then, Souq.com became Amazon.ae. Moreover, a UAE based noon.com has become a regional player in electronic commerce being present in wider Middle East.

Both platforms offer user-friendly and highly advanced online platforms both for sellers and buyers.

5. Secure and Modern Banking System

The UAE offers a modern banking system supported by latest advances in financial technologies. The financial services is of international standards and competes with the most sophisticated economies of the world. On top of that, the UAE banks have proved to be reliable and safe during the economic downturns. Moreover, there are number of payment gateway providers in UAE for any size of business to facilitate online payments. Safe and secure banking system as well as online payments are vitally important for operating your e-commerce business.

There are many other reasons to setup your e-commerce business in UAE apart from the above mentioned. The UAE is one of the sought-after places for doing business, working, and living. Expatriates make up almost 80% of the total population in UAE, representing nearly 200 nationalities of the world. Foreigners are attracted, among other reasons, by safety, tolerance, employment opportunities and high standard of living.

On the other hand, now it is the best time to start an e-commerce business as consumer behavior is rapidly changing partly because of technological advances and partly because of the pandemic during which people tend to prefer online shopping to traditional shopping.