More and more people are using social media to set up and generate sales for their small businesses. Whether it is individuals selling custom garments or jewellery, or services such as social media management, social channels are now a vast marketplace. So vast, in fact, that some 90 million small businesses currently operate on Facebook alone – that’s before considering Instagram, Twitter and the rest.
The Dubai authorities recently spotted this growing trend and introduced a license designed specifically for social sellers. Called the e-trader license, it was introduced in 2017 in order to officially permit UAE and GCC nationals and expats residing in the UAE to practice their business activities via social media networks.
If you are in this field, or planning to join it any time soon, there are few things you’ll need to know before applying for your e-trader license.
What is the e-trader license in Dubai?
Dubai’s Department of Economic Development (DED) defines the e-trader license as the following:
‘The eTrader licence from Dubai Economy (DED) allows UAE nationals and GCC nationals residing in Dubai to practise business activities through various social media networks. The eTrader licence can be registered under the name of a single owner only. The eTrader cannot open a shop or issue visas and in case of a legal dispute, the licensee alone will be held responsible.’
The license is aimed at home entrepreneurs that do business primarily via social media. The intention of the license is to make it easier for traders to do business and to give confidence to consumers that they are buying from a legitimate, licensed, social-selling business.
E-trader license eligibility requirements
If you are an individual that sells goods or services through social media accounts and a personal website, then you are required to have an e-trader license in order to trade in Dubai.
You are eligible for the Dubai e-trader license if you sell from home and do not have or require the use of office space or warehouse premises.
You must also be over the age of 21 and be a UAE or GCC national, or an expat with an Emirates ID. To check your eligibility, it is best to seek the advice of a company formation expert.
To secure your license you must also reserve a trade name for your business and pay the required fees within 24 hours of your license being issued.
Benefits of UAE’s e-trader license
As the holder of a UAE e-trader license you are permitted to sell and promote goods and services via your social media accounts and a personal website.
You are also permitted to sell through permitted online marketplaces such as Amazon.ae. As well as legitimising your business in the eyes of consumers, the e-trader license can also help to protect your brand and trade name.
One important point to note is that the Dubai e-trader license only permits the sale of goods and services within Dubai. If you wish to sell to other emirates, you must seek approval from the local Department of Economic Development or Municipality in that emirate.
How to apply for a Dubai e-trader license
There are two ways to apply for your Dubai e-trader license. The first is the DIY route. Here you make your application directly to the DED via its DED Trader website.
To do this, you must first register, providing information about yourself, your business and your active social media accounts.
As well as allowing you to apply for a Dubai e-trader license, registering on the DED Trader portal allows you to benefit from trade name protection and access exclusive banking offers and training workshops.
Alternatively, you can work with a company formation agent who can take care of the application on your behalf. In this case, you simply provide the agent with your details and then wait for confirmation that your license has been approved.
You should expect to receive your license within three to five working days.
E-trader license costs
E-trading is a very low-cost business as it involves no premises, employees or costly overheads. The only real costs are for the goods you intend to sell and the license itself.
The Dubai e-trader license costs in the region of AED 1,000-1,400 and must be renewed every year. It is important that you renew your license within one month of the expiry date. Failure to do so will result in automatic cancellation.
If you apply for your license with the help of a company setup agent, we can also take care of your renewal, to ensure you are always permitted to trade.
Are you ready to start your e-trader business in Dubai?
Hopefully this guide has made it clear that if you’re armed with the right knowledge, setting up an e-trader business in Dubai doesn’t have to be overly complex.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you to ensure that this is the case, it’s a good idea to work with a company formation specialist in Dubai such as Business Incorporation Zone (BIZ) when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.