I’m Badii Boutar. I build online stores for clients, many of them in the Gulf, and I built The Merchant Engine, an open-source store you run on your own server. I’m not a lawyer or a tax adviser, so every rule in this post links to the official page I took it from. I read those pages on 29 October 2026. Fees and procedures change, so check the live pages before you pay for anything.
You need a licence before you sell
The UAE government portal is clear that to sell online on the mainland you need a commercial licence that includes an eCommerce activity. The same page says every eCommerce licence also needs the approval of the TDRA, the telecoms and digital government regulator.
Where you get that licence is the first real decision. You have a few routes.
A mainland licence. This is the one the u.ae page means when it talks about selling on the mainland. You apply in the emirate where you set up, and the eCommerce activity has to be on the licence.
A free zone licence. The same u.ae page says free zones offer specialised licences for selling online, and lists examples such as Dubai CommerCity, Masdar City, Shams in Sharjah, RAKEZ and the Ajman Free Zone. It also says free zone companies are allowed to operate inside the free zone and internationally, and that selling directly on the mainland may need more. If most of your customers will be in Dubai or Abu Dhabi, ask the free zone exactly what selling to them requires before you sign.
A home-based licence. Dubai and Abu Dhabi each have one aimed at people who sell from home or on social media.
- In Dubai it’s called e-Trader. In April 2022 the Dubai Media Office described it as a licence for businesses that operate from home, online or on social networks, and said its holder can’t open a shop. You apply on Invest in Dubai. Guides online disagree about who is eligible and what it costs, and I couldn’t confirm either on an official page, so ask the Department of Economy and Tourism directly.
- In Abu Dhabi it’s called Tajer Abu Dhabi. The TAMM page says it covers specific commercial activities without an official business site, is valid for three years, and is processed in about ten working days. The page lists several fees, so read the whole list there rather than trusting a single number from a blog.
Both are a good fit for testing an idea. Neither gives you a shop front.
The TDRA certificate
The TDRA issues a no-objection certificate for practising an e-activity to people and companies that sell through a website, an app or a social media account. The page says it’s free and takes about two working days. You sign in with UAE PASS and attach your commercial licence if you have one. When you apply for the licence, ask whether the TDRA approval is already part of that process or a separate step for you.
What the 2023 law asks of your store
Online selling in the UAE is governed by Federal Decree-Law No. 14 of 2023 on modern technology-based trade, in force since 16 September 2023. It’s short and worth reading once. A few articles change how you build the store itself.
Article 5 says you have to publish the price of what you sell, along with your delivery and payment fees, and make your terms available on the site. It also asks for a detailed invoice that isn’t on paper, which in practice means one you email or let the customer download.
Article 6 lists what the customer is entitled to see. That includes ways to contact you and to complain, and your licence details, address and phone numbers. In practice this means a contact page and a footer that actually carry that information.
Articles 14 and 15 say you can’t charge the customer delivery or payment fees beyond the ones you announced. If you add a fee for cash on delivery, it has to be stated before the customer orders, not added at the door.
Article 7 covers returns. A customer can return goods that arrive damaged, incomplete, different from the description, or too late to be of use. Write a returns policy that respects that.
VAT
The Federal Tax Authority and the UAE government portal set out the basics. The standard rate has been 5% since 1 January 2018. You must register once your taxable supplies pass AED 375,000 over the last twelve months, or are expected to pass it in the next thirty days. You can register voluntarily from AED 187,500, and registration is due within thirty days. A business not resident in the UAE has to register whatever its sales, unless someone else in the UAE is responsible for the tax.
For the store, the important rule is how prices are shown. When VAT came in, the FTA told businesses to display prices with VAT included. Whatever platform you use, check that it can show VAT-inclusive prices and still print the VAT on the invoice.
Getting paid
You can take cards, cash on delivery, or both.
Card payments need a payment provider, and a provider checks who you are and what your business is before it pays out. On Shopify, for example, Shopify Payments works in the UAE and asks for that verification during setup.
In my client work in the Gulf, cash on delivery is the payment method almost every shop turns on first. It has no card fee, but it isn’t free. The courier charges for collecting the cash and holds the money for a while before paying you. A customer can also refuse the parcel at the door, and then you have no sale and a parcel on its way back. Before you choose a courier, ask what it charges per cash order and how long it holds the money, because that delay is your cash flow.
Picking a platform
For most people opening their first shop, a hosted platform is the sensible start. You pay a monthly fee and someone else looks after the servers. I wrote a separate post on what Shopify costs in the UAE, and how it handles cash on delivery and Arabic.
The Merchant Engine is the other route, and it has clear limits. The payment methods are cash on delivery, manual bank transfer, gift cards and, since v1.0.1, card payment through Stripe once you enter the keys in the admin. Stripe is the only card provider so far, and the recipe for adding another is written, but if you need a different card provider on launch day, it’s not the right choice yet. It also runs on your own server, which someone has to install, update and back up. The admin dashboard is in English. Text fields have an Arabic tab, but the dashboard itself isn’t translated.
Where it fits is a shop that sells mostly on cash on delivery and wants Arabic from the start. The storefront, the invoices and the emails work in Arabic, right to left. The installer asks for the currency, how prices are written, the VAT rate and whether prices include tax, and cash on delivery is on by default. The code is MIT-licensed, so there’s no plan fee and no fee per order. What you get lists what ships and what doesn’t, and requirements says what the server needs. If you’d like a longer comparison with Shopify, I wrote one on an open-source, self-hosted Shopify alternative.
Where I’d start
Get the licence first. The law makes it a condition of selling online, and the TDRA certificate and the payment setup both lean on it. Then write the pages the law expects, your terms, your returns policy and a contact page with your licence details, before you spend time on the design.
If you’d like me to build the store for you, that’s work I take on. You can hire me here.