E-trading versus e-commerce business in Dubai

When it comes to business, the digital business model is a breath of fresh air that opens up new opportunities for a wide range of activities. Entrepreneurs and small and medium-sized businesses (SMBs) with limited resources may now take use of the internet media. So you can now start up an e-trading and online commerce business in Dubai at a reasonable cost and then improve your business model after you have achieved financial stability and are profitable.

If you want to operate as a single owner of your small company across various social media platforms, you may get an e-trader licence. The e-commerce licence in Dubai is specifically designed for businesses who wish to engage in the online selling of tangible goods, such as clothing.

Continue reading to learn more about the main distinctions between these two businesses:

What exactly is an e-trading enterprise?

Investors and company owners choose to start their operations in the United Arab Emirates because the government has created clear regulations for all commercial activity. You get a legal licence that allows you to conduct your online company via social media platforms such as Facebook, Twitter, Instagram, Snapchat, and other similar sites. It is referred to as an e-trader licence, and it is granted by the Department of Economic Development (Department of Economic Development).

To operate an e-trading firm, you do not need the services of a local sponsor or a national service agent. Daily activities include marketing and selling your goods and services on various social media sites, such as Facebook and Twitter. As a result, it is essential to highlight that expatriates from countries other than the GCC (Gulf Cooperation Council) are only permitted to provide professional services (and not goods) via their social media company.

Who should be the one to start this company?

The e-trading business model in Dubai should be preferred by new-age investors, individuals who wish to run their businesses from their homes, and those who want to start a company on a tight budget. By default, the e-trader licence does not allow you to sell your products outside of Dubai. You may, however, get permission for the same from the relevant economic department of the United Arab Emirates.

The greatest e-commerce businesses are those having a main target market of residents in the greater Dubai area as their core customer base. However, under the conditions of an e-trading licence, you are not permitted to establish a physical shop or commercial unit. Be sure to keep all of these considerations in mind before beginning an e-trading company in Dubai. If you find yourself in a bind and need more clarification on how this company model operates, contact with business professionals in the United Arab Emirates.

How would you go about doing such a company in Dubai?

You are not permitted to sell goods in Dubai unless you have a valid licence. With an e-trader licence, you may legally sell your goods on social media and other digital channels like as websites and apps. It improves system transparency and reduces the possibility of fraudulent product sales, as well as other types of malpractice.

The following are the prerequisites for obtaining an e-trader licence in Dubai:

The applicant must be located in Dubai (in order to offer both goods and services) and have a minimum age of 21 years to be considered.
It is necessary to provide the Makani and Eljari numbers.
Should be in possession of a valid EID
After you have completed the papers, you will need to do the following:

Make a reservation for a trade name.
Payment of the related fees must be made within 24 hours of the licence being issued.
Ensure that the licence is renewed on an annual basis, failing which the licence will be automatically terminated.
Completion of the registration procedure with the Dubai Department of Economic Development (DED).

What exactly is an e-commerce enterprise?

Online shopping has become a necessary component of almost everyone’s daily routine. In addition to being easy and reasonably priced, it provides an enormous number of choices to select from. An e-commerce company includes selling to the general public, and in order to do so, you must first get an e-commerce licence from the appropriate authority. As a result, you may operate your e-commerce company in the United Arab Emirates via social media networks and many other online selling platforms.

The e-commerce industry in the United Arab Emirates is expected to be valued about $27.1 billion by 2022. In other words, if you want to participate in Dubai’s flourishing digital economy, now is the time to do so. There are several various kinds of e-commerce licences available, each of which caters to a particular target group.

Who should be the one to start this company?

The application process for an e-commerce licence should be undertaken by those who are prepared to maintain inventory levels, secure office space, and distribute to a larger customer base. Billing and paperwork for your company are handled at the registered office location, so be sure to purchase or rent office space.

The Department of Economic Development (DED) will need you to acquire a trade licence if your e-commerce company is located in one of the free zones in order to sell goods outside of the free zone.

An e-commerce licence in Dubai will cost you between 12,000 and 15,000 AED, depending on your location. As a result, if you want to experiment with your online company, you should consider purchasing an e-trading licence, which will cost you about 1,500 AED. Once you’ve established a reliable customer base, you may apply for an e-commerce trading licence.

How would you go about doing such a company in Dubai?

E-commerce companies in Dubai are classified into the following categories:

B2C (Business to Consumer) refers to the practise of selling your goods directly to consumers via digital media platforms such as the internet.
The term “business to business” refers to an internet transaction that takes place between two commercial organisations (you sell a product or service to another business)
C2C (Consumer to Consumer) is an abbreviation for Consumer to Consumer. A kind of e-commerce company in which a customer sells to another consumer via the internet.
C2B (Customer to Commercial) refers to a business transaction in which an organisation obtains services or goods from an individual consumer.
You will need to meet the following criteria in order to acquire the licence once you have completed your e-commerce company layout:

The Companies Commercial Law 2015 allows for the formation of a limited liability company (LLC) or a single proprietorship business.
It serves as a registered office for the purpose of legal billing and commercial paperwork.
Registration with the Federal Tax Authority for VAT purposes is required.
If you meet these criteria, you may submit an application to the relevant economic department with the following information:

A legally recognised business name
Registration with any of the UAE’s ports and customs agencies for the purpose of importing or exporting goods is required.
Fill out an application for a first approval certificate (valid for six months)
Open a corporate bank account that is tailored to your company’s requirements.