The UAE corporate environment is conducive to business growth and expansion. The UAE government has made the business incorporation process uncomplicated. If the documents are in place, the incorporation process would be much smoother. Therefore, the UAE has become a business destination for many. Online business also has grown considerably here. With the present scenario of a global pandemic, the business world had faced a setback. However, the online platforms have greatly supported businesses to stay on track. Businesses through online platforms like Amazon and Noon are very popular here. Selling the products on Amazon have great benefits. However, the owner has to ensure proper company setup. Moreover, the owner has to know the requirements to setup online trading. Trading in Amazon UAE requires Amazon Business license. Once the Amazon business license is in hand, you are free to setup accounts on Amazon and open your store.
Statistics on E-commerce in UAE
According to a joint study by Dubai Economy and Visa, e-commerce transactions will grow around 23% on an average between 2018 and 2022. The average size of e-commerce transactions in the UAE in the year 2018-19 was USD 144 billion.
- Revenue in the E-Commerce market is projected to reach US$7,456m in 2021.
- Revenue is expected to show an annual growth rate (CAGR 2021-2025) of 10.30%, resulting in a projected market volume of US$11,034m by 2025.
- The market’s largest segment is Fashion with a projected market volume of US$2,221m in 2021.
- User penetration will be 69.4% in 2021 and is expected to hit 66.1% by 2025.
- The average revenue per user (ARPU) is expected to amount to US$1,075.81.
E-commerce and e-trading sites are available. On e-commerce sites like amazon.com, there are many suppliers from whom you can choose the products. Whereas, in e-trading sites, you can choose the products from the sole supplier, running a retail or wholesale outlet.
Benefits of Amazon Trading in UAE
- Amazon trading maximizes visibility of the product
- It is one of the most visited sites with millions of users, therefore increasing product reach.
- No need for your own infrastructure
- No need to hire a huge workforce
Do we need a trade license to sell products on Amazon?
Yes, we need a license to conduct online business activity in UAE. A non-resident or a person from another country can register an account on Amazon. ae. An individual can register in Amazon. ae to sell products. The individual requires to submit a scanned copy of his passport or bank statement for registration. However, a business corporate requires a business license, registration papers, an ID of the owner, and credit card copy. In 2-3 days, the approval or rejection mail(citing the reasons), of the registration, will reach you. After that, one can start selling the products on Amazon. ae.
Process to get Amazon Business License in UAE
- Initially, for a business to trade online, the owner has to select the marketplace. Amazon. ae is the marketplace in the UAE. Similarly, there are other market places in different countries.
- Secondly, choose your business activity. Amazon has a list of accepted countries. If the business is registered in the accepted countries, no need for a license and you can register using your credentials. However, if the owner is from a country other than the accepted countries, then the owner has to submit a business license. There is also a list of accepted currencies for trading. If the owner does not trade in any of the accepted currencies, then he can open a trading account but not a bank account. In such a case, he can use a third-party service for money transfer.
- Thirdly, the owner has to select the category in which trading has to be done. Amazon provides a list of accepted categories. This ensures that only legitimate products are sold on the platform.
- Now, the owner has to register the business on amazon. ae site by providing the required information and details.
- The only account that is available in amazon. ae is the Professional account.
- If the paperwork is error-free, Amazon approves the registration in 2-3 days and the trader gets an amazon trading license in UAE.
- Business name, address, and contact information
- Valid bank account and billing address
- If the registration is done by the owner, he has to submit the trade license. However, if the registration is done by the legal representative, then he has to submit the power of attorney.
Cost of Amazon Business License
The cost involved in setting up online trading is:
- Inventory cost: The inventory cost is the cost of the product along with the storage cost.
- Shipping cost: The cost of the product generally includes the shipping cost
- Branding cost: Branding cost includes the cost of logo designing and package designing.
- Product image cost: The owner has to post enticing pictures of the product. For this, the owner can hire professional photographers. This involves cost.
- Advertising: Advertising the product is very important. The advertisement makes the product viewed and noticed among its competitors.
Trading on Amazon. ae involves the above-mentioned costs. However, registering in Amazon. ae, in the Professional account( only account available in the Amazon. ae), is absolutely free of cost. The rules are different in different countries. Once you start selling on Amazon, you have to make payments.
Is Product Selling Online through Social Media Sites Legal in UAE?
The UAE government has taken strict measures to stop fraudulent activities online. It is a cost effective platform, that has a wide reach. The UAE government wants to safeguard its people from malpractices. In 2018, authorities shut down unauthorized e-commerce sites and social media pages. This was to prohibit illegal trades and allow only standard trading. In 2019, the government passed Electronic Media Regulation 2019. This made the requirement of an online trading license in the UAE necessary. The government charges a fine of AED 500000 for parties selling online without a license. This is also applicable to home businesses like online catering, tailoring, beauty business, and apparel business.
In short, trading on amazon has many benefits. Besides, it has a wide reach and is cost-effective. However, before starting an online business one has to be aware of its requirements and legalities.