31 e-commerce licenses issued since last year

Business News

More are expected to be issued in the coming years with the launch of e-commerce guidelines

The Department of Trade has issued 31 e-commerce licenses to operate online based businesses since last year. The department started issuing the licenses from July last year after launching e-commerce policy guidelines.

The Department of Cottage and Small Industry (DCSI) in absence of e-commerce guidelines had issued 18 licenses before the launch of the guidelines. The remaining were issued by Trade Regulation and Monitoring Division under Department of Trade.

E-commerce, standing for electronic commerce, is the process of a customer shopping online and processing their payment. An e-Commerce website allows a visitor to find their product(s), add them to their «cart» and securely enter their payment information to complete the purchase.

These license holders can operate different business across the country using either their websites or the social media platforms.         

Rapid development of internet connectivity and powerful online tools has transformed conventional methods of operating business. E-commerce, over the years has gained popularity among netizens. The businesses are being operated targeting different groups and classes of customers.

The applicant needs to submit a proposal about the type of business to start for the license with the required documents similar to applying for other trade license. However, location is not so important as the license is for a web-based business. The RMA provides clearances to provide payment gateways for the applicants. So far, there is no pending application for the licenses.

The common e-commerce business trending in the country is service and retail online business. It is categorized into Platform Operator, Operator on platform and other operators. Platform operator provides cyber space, virtual places of business, transaction matching, information distribution and other services to the parties of ecommerce transaction to carry out independent e-commerce activities.

Operator on Platform sells goods or provides services to customers through e-commerce platform operated by Platform Operators.

Other Operators refers to e-commerce operators that sell their own goods or provide their own services through self established websites.                 

Digitization of business has evolved globally for both goods and services and it has become a dominant mode of operating businesses replacing conventional mode. Even the Royal Monetary Authority (RMA) has begun implementing payment gateway platform to support the inbound international payment particularly in the tourism sector and provide avenue for domestic e-commerce merchants to expand their global reach.

With emphasis on Cottage and small scale industries, the RMA also started facilitating establishment of international e-commerce platforms to take local products into the international market.     

Chief Trade Officer, Rinchen Lhazom said that awareness is still required for citizens to abide by the e-commerce policies and guidelines if they are doing big online business. The department however does not have any procedures to track such business operators but the Department of Revenue and Customs is mandated to inspect the goods before entering the country as the products are only then sold.   

However, there are people selling goods through social media platforms without e-commerce license. But it is possible and allowed with just a micro trade license which has to be registered with the department. It has become quite difficult to monitor the sale of goods through online platforms. However, the retailers selling the goods have already completed the customs formalities before launching in the market. “There might be fewer cases where the sellers go abroad and buy stuff in bulk and try to sell through online platforms which is negligible,” Rinchen Lhazom said. Also, people selling their home made products including hand-woven garments from home are also possible through online platforms.  

The applications for e-commerce license are expected to rise in the future. Around two licenses are issued monthly. “It’s slowly picking up. Since the guidelines are new, people will be aware and interested to apply,” Rinchen Lhazom said.  

Krishna Ghalley from Phuentsholing

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