e-Trader (e-Commerce license) in Dubai
An e-Trader license is meant for home-grounded individualities or entrepreneurs who vend products and services via social media platforms like Instagram. Department of Economic Development (DED) introduced the E-trader license in Dubai to regulate the deals of online goods vented via social media websites. This regulation helps to check the deals of fake goods and goods over social media. The licensing also serves as a confidence supporter for the guests or buyers who engage in online purchase via colorful social media platforms. By getting an e-trader license in Dubai, you can engage in immolation products or services for trade on social platforms.
What exactly is e-Commerce and why is it important?
If you are planning to work from home using social media platforms and don’t want to hire an office, then an e-trader license in Dubai is the ideal solution to flourish your business. While the Dubai e-trader license allows you to do online business in Dubai, to sell your products or services in other Emirates, you need to get separate approval from the respective DED authorities.
How to setup an e-Commerce in the UAE Free Zones?
E-trading is a lucrative business in the UAE, which is the fastest growing e-trading market in the MENA region. Several free zones in the United Arab Emirates offer a profitable business setup environment to start an e-trading business. With an e-trading license in the free zones, companies cannot trade directly with consumers on the mainland. However, e-trading companies can sell the products to providers already available in the market.
High digital penetration, a digital-savvy population, a rise in mobile wallets, and proactive government policies make the United Arab Emirates one of the best places to start an e-trading business. However, the COVID-19 pandemic has turned out to be a blessing in disguise for online platforms because 184 countries, including the United Arab Emirates, have implemented lockdown measures where people can only could go out to buy essentials.
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Restrictions to mitigate the spread of the coronavirus have led to a major shift in consumer behavior in the UAE, where people have started shopping through online platforms and most offices were working from home and schools have started classes online. There has been an increase in the number of online orders and the number of new users has also increased. The new trend has added to the profitability of e-trading businesses in the UAE, including e-learning and e-training.
The United Arab Emirates has a vibrant e-commerce market that is forecast to reach $27.1 billion by 2022, according to a recent report in Gulf Today. In terms of size, the UAE e-commerce market ranks 33rd in the world. It is also estimated that over 80% of the UAE population is actively shopping online. The growth of e-commerce platforms such as Namshi, Noon, and Amazon.ae (formerly Souq.com), Careem Cab indicate the growing importance of e-commerce companies and increased competition in the market. The uncertainty over COVID 19 also brightens the business prospects for e-commerce platforms.
Key aspects to consider before starting an e-Commerce busines in the UAE Free Zones
The Free Zone Authority of the respective free zones is the competent authority that issues business licenses for e-trading companies. After obtaining an e-trader license, entrepreneurs have an online platform for buying and selling products. The following things should be considered before setting up an e-commerce business in the UAE Free Zones:
A) Sale of the Products
In Free Zones, companies cannot sell products directly to customers. However, companies reach an agreement with suppliers whose products are already available on the market. Free zone businesses may list such products for sale on their shopping website. The need for a local distributor or agent is not required under the free zone e-commerce license because the companies are selling the suppliers’ products.
B) Warehouse requirements
The e-trader license can be obtained with the Flexi desk facility in the Free zones and therefore the warehouse or office space requirement is not mandatory. Suppliers with whom the company has an agreement will store the goods if the company deals with consumer products. Since there is no warehouse requirement, the operating cost of the e-trader license will be lower.
C) Registration of Products and Customs duties
E-trader companies are not responsible for products registered with the local authorities concerned, such as municipalities and health authorities. This is because the companies will deal with the products that are already registered and the supplier does the registration of the products. Similarly, the supplier already pays customs duties, and the e-commerce company does not need to pay 5% customs duties.
Benefits of establishing an e-Commerce company in the UAE Free Zones
- Ability to repatriate profits and capital
- No warehouse requirements responsible for product registration (provider will take care of it)
- Zero Currency Restrictions
- No sponsorship requirement and 100% ownership benefits
- Zero Corporate Tax
- Operating costs are minimal
- Exemption from import duties on e-commerce licenses
Free Zones in the UAE
In the whole UAE there are 51 Free Zones and 7 Economic Departments. Some of them I mentioned for you below:
- Dubai Multi Commodities Center (DMCC)
- Jebel Ali Free Zone (JAFZA)
- Dubai Airport Free Zone (DAFZA)
- Ras Al Khaimah Free Zone
- Sharjah Media City
- Ajman Media City
- Fujairah Creative City
Entrepreneurs who want to set up a business in one of the 51 free zones in the UAE need to be aware of the different regulations. Each free zone is governed by different authorities with a comparatively different set of regulations designed for companies operating within the free zones. The Mainland business setup requires a completely different set of requirements. The pace of company formation depends on how effectively entrepreneurs can execute business setup processes. However, it is almost impossible for foreign entrepreneurs to understand all the laws and regulations, especially if it is their first business venture.
Masar Al Ameen professionals can assist you in obtaining your E-trading License in Dubai. They will handle your paperwork and ensure it is in the appropriate format. They will also assist with obtaining extra permissions and ensure you don’t overpay for your license. Just get in touch with them, and they will take care of the rest.
This is their link.
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