E-commerce Company Formation.
In online retail, the suitable country is decided by the collection channel, the marketplace account, the route of the goods and VAT. A comparison of the three countries follows below.
E-commerce Formation Decided by Four Criteria.
Customers can come from any country; the company's address is decided by the country through which collection, the marketplace and the goods pass.
Card collection accountStripe, PayPal and Shopify Payments look to the country where the company is formed, not to the customer's country.
Every store that accepts card payments has a collection account, and that account is opened in the company's country. Stripe and PayPal work with a Dubai or UK company, and do not work with a Northern Cyprus company. Shopify Payments requires a UK bank account in the United Kingdom. Before the country is chosen, we assess whether the channel to be used accepts a company in that country.
Marketplace accountOn Amazon and Etsy, a seller account can be opened if the company's country is on the seller list.
Amazon UK and Etsy accept a UK company as a seller; Northern Cyprus is on neither seller country list. Payments from the marketplace are transferred to the company account periodically, so the bank account is part of the same formation plan.
Route of the goodsThe route of the goods determines customs and VAT obligations, and therefore the suitable structure.
For digital products the effect of this factor is limited. For physical goods, the countries the goods leave and enter determine customs and VAT obligations. Profit on goods leaving the Northern Cyprus Free Port for abroad is exempt from tax and customs duty; goods going to the Northern Cyprus domestic market are subject to customs duty and VAT. A company that brings goods into or out of Great Britain needs an EORI number.
VAT registration obligationOnce the sales threshold is exceeded, VAT registration becomes mandatory; the threshold varies by country.
In Dubai, VAT registration is mandatory if taxable supplies exceed AED 375,000 in the last 12 months; the rate is 5%. In the UK, the threshold is annual turnover of £90,000; if the company is in practice managed from another country, whether the threshold applies is assessed separately. A Northern Cyprus Free Port company is not a VAT payer; VAT is paid on goods going to the domestic market. Sales approaching the threshold are monitored in the monthly accounting cycle.
The Same Criteria, Three Countries, Three Different Outcomes.
A summary first: the country matching your situation is indicated below. A comparison of the three countries follows.
Card collection is your main income
Stripe and PayPal work with a company in these two countries; in Northern Cyprus only a local virtual POS is available.
You will sell on Amazon UK or Etsy
Both accept a UK company as a seller; Northern Cyprus is on neither seller list.
You sell to the Gulf and the Middle East
A local company provides trust with local customers and ease of payment.
Your goods leave the Free Port for abroad
Profit on goods leaving the Free Port for abroad is exempt from tax and customs duty.
| Criterion | Dubai | United Kingdom | Northern Cyprus |
|---|---|---|---|
| CollectionCollection by card and through platforms |
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|
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| Structure and formation | Free zone or mainlandThe activity code determines the trade licence class; the e-commerce activity is registered on the licence with the correct class at formation. | Limited · Companies HouseThe activity is converted into a SIC code and defined in the registration file; a company that brings goods into or out of Great Britain needs an EORI number. | Free Port · limitedAt least two partners; one visit to Northern Cyprus is required for signatures and the bank account, and the foreign partner's share capital is blocked at the bank. |
| Residence / visa for the team | Residence visa through the company | Company formation does not provide residence | Company formation does not provide residence |
| Tax framework | 0% up to AED 375,000, 9% aboveOn net profit; free zone companies included. | 19-25%, depending on profit19% up to £50,000, 25% above £250,000; a gradual transition in between. | 0% on business outside Northern CyprusFor a Free Port company; sales to companies within the Free Port are also exempt. Normal tax rules apply to sales to a local company within Northern Cyprus. |
| Setting up an e-commerce company in Dubai | Setting up an e-commerce company in the UK | Setting up an e-commerce company in Northern Cyprus |
The collection row is based on the payment infrastructure table; the provider itself is the body that opens the channel, and approval is not guaranteed. The tax cells are a general framework, not a personal opinion.
Formation cost, typical timeline and bank channels are not included in this table: as they do not depend on the industry, they are presented in the full comparison of the three countries. Compare the Three Countries by Criteria
If your situation does not fully match any of these, you can send us your product, your sales channel and the route of your goods; the suitable country is assessed together.
Request an AssessmentCollection open, close to the Gulf
Setting up an e-commerce company in Dubai
If your customers are outside the UAE, you can operate with a free zone licence and use all collection channels. If you sell to the Gulf, a local company provides trust with customers and ease of payment.
- What matters is who you sell to: a free zone if your customers are outside the UAE, mainland if you sell to customers inside the UAE.
- Stripe, PayPal and wamo can be set up with a Dubai company.
- If the warehouse or the team is in Dubai, partner and employee visas are obtained during the process; the quota depends on the licence package.
Restrictions to note for Dubai3 items
- Presence in the UAE is required for the visa and biometrics; this step cannot be carried out by proxy.
- In addition to formation, a licence renewal cost arises every year. The second-year renewal should be planned from the start.
- VAT registration is mandatory once taxable supplies exceed AED 375,000; registration is made within 30 days.
Marketplaces and card collection open
Setting up an e-commerce company in the UK
Amazon UK, Etsy, Stripe, PayPal and Shopify Payments work with a UK company, and the whole formation is carried out remotely. On the other hand, profit is subject to corporation tax.
- Amazon UK and Etsy accept a UK company as a seller.
- Shopify Payments is opened with a company registered in the UK and a UK bank account.
- No travel to the UK is required at any step of formation.
Restrictions to note for United Kingdom3 items
- Company formation does not provide a right of residence. Immigration is a separate process.
- Stripe and Shopify Payments require a physical bank account in the UK; the account plan is made together with formation. The approval rate at traditional banks is low for non-resident partners; in practice, we start with a payment institution account.
- If the company is in practice managed from your country of residence, tax liability may arise there, and dividends may also have to be declared there.
Marketplaces and global payment providers closed
Setting up an e-commerce company in Northern Cyprus
If your goods leave the Free Port for abroad, the profit is exempt from tax and customs duty. If Amazon, Etsy or Stripe is your main channel, Northern Cyprus is not a suitable option; card collection is possible only through a local virtual POS.
- In transit trade and exports, profit in the Free Port is exempt from tax and customs duty.
- If your operations are based in Turkey, the time zone is the same and the journey takes a day.
- The company can operate without renting an office, through an address and representative agreement made with an accounting office.
Restrictions to note for Northern Cyprus3 items
- Northern Cyprus is not on the country lists of Stripe, PayPal, Amazon, Etsy and Shopify Payments; if marketplace sales or global card collection is your main channel, Dubai or the UK should be considered.
- Sales to a local company within Northern Cyprus fall outside the exemption: normal tax rules apply.
- It is not an EU member and is not the same country as Southern Cyprus.
Our Services for E-commerce Companies
The criteria above decide the matter; the services below cover putting that decision into effect. All of them are services we currently provide.
- Company formationOnce the product sold and the target market are communicated to us, we enter the licence class and the activity definition in the formation file.
- Accounting and reportingMarketplace payments, card collections and refunds are recorded in the accounts each month; the VAT threshold is monitored in the same cycle.
- Banking and payment systemsWe prepare the corporate account application file and manage the process; whether card collection and marketplace payments work with your company is assessed before the country is chosen.
- Visa and residenceIf the warehouse or the team is in Dubai, partner and employee visas, the medical test and identity steps are included in the formation plan.
The scope, timeline and fee of the service vary by country; details are on the relevant country page.
Frequently Asked Questions.
What decides is your collection channel. If you sell by card and through marketplaces, Dubai or the UK; if your goods leave the Free Port for abroad and payment is collected by bank transfer, Northern Cyprus may be suitable. The comparison is in the second section of this page.
Both work with a Dubai or UK company and do not work with a Northern Cyprus company. The decision to open an account rests with the provider and approval is not guaranteed; we prepare the application file.
Yes, with a UK company: Amazon UK and Etsy accept a UK company as a seller. Northern Cyprus is on neither seller country list.
In Dubai, it is mandatory when taxable supplies exceed AED 375,000 in the last 12 months; the rate is 5%. In the UK, the threshold is annual turnover of £90,000. A Northern Cyprus Free Port company is not a VAT payer; normal tax rules apply to sales to a local company within Northern Cyprus.
In the UK, no travel is required at any step. In Dubai, you need to be in the UAE once for the visa and biometrics. In Northern Cyprus, you need to come once for signing documents and the bank account.
Yes. Marketplace payments, card collections and refunds are recorded in the monthly accounts, and filings are made in the same cycle. The scope and fee vary by country.