Differences between E-Trader License and E-Commerce License?

If you are planning to start an online business in the United Arab Emirates, you can choose from either of the two licenses such as an e-Trader License or an e-Commerce License. Both these licenses allow different types of business activities and have their own benefits. Since both licenses allow different types of business activities, different types of online businesses will require different types of online business trade licenses. And that is why we will discuss the Difference between E-Trader License vs E-Commerce License to choose what’s best for your online business. 

Also read How to Start an Ecommerce Business in Dubai, UAE

E-Trading Business in Dubai

Investors and entrepreneurs prefer starting a business in the UAE due to its well-defined laws given for all types of business activities. In the UAE, you can get a legal license to sell products online via platforms like Facebook, Instagram, Twitter, Snapchat, etc. This license is called the e-trader license and is issued by the Department of Economic Development (DED). 

You need not have a sponsor or a national service agent to run your e-trading business. The day-to-day activities of an e-trading business involve selling products or services over several social media platforms. Therefore, it is important to note that non-GCC expats are only allowed to offer professional services in their social media business. 

E-Trader License in Dubai

The e-trader license in Dubai is an online trading business license released for small home-based online businesses. This meant that it was initially meant for small entrepreneurs and stay-at-home moms who wanted to sell their crafts online. 

Since the e-trader license allowed people to sell products through social media, other businesses started to register for it as well. The e-trader license also gave online businesses the credibility they needed to gain and build the trust of their customers. 

Listed below are the business activities allowed by the e-trader business license:

• Online services
• IT consultation
• Social media marketing and promotion
• Selling homemade products online
• Online event management

A physical office or space is not required when you are working with an e-trader business license. 

Requirements to Obtain an E-Trader Business License

• Must have a valid EID
• The applicant must be based in UAE with a minimum age of 21 years
• Must have a present Eijari and Makani number

After you are done with the paperwork, you will need to:

• Reserve a trading name for your business
• Pay the fee associated within 24 hours of license issuance
• Ensure the annual renewal of your license, failure to renew will result in the auto cancellation of your license
• Successful completion of the registration process with the Department of Economic Development

Also read How Can I Renew my Trade License Online in the UAE

E-Commerce Business in Dubai

Online shopping has become an integral part of everyone’s day-to-day life. It is affordable, convenient, and provides you with tons of choices that you can choose to your liking. An e-commerce business involves selling products or services to the general public and it requires you to secure an e-commerce business license. Therefore, you can make use of social media channels and other online selling platforms. 

E-Commerce License in Dubai

The e-commerce license in Dubai was released for the purpose of running bigger businesses that wanted to run e-commerce in the country. This precisely means that an e-commerce license allowed everything from the storage and transportation of products to online transactions and advertisements. 

Listed below are some of the business activities allowed with an e-commerce business license: 

• To start an e-commerce business
• Store physical business goods
• Transportation of goods
• Sell products online
• Advertise products online
• Sell digital goods
• Spare parts, machine parts, etc.
• Deliver products to customers
• Accept online payments

The e-commerce license in Dubai offers a huge scope than the e-trader license. However, you will need a bigger starting capital and a lot of helping hands to completely utilize the e-commerce business license. 

Requirements to Obtain an E-Commerce Business License

• Formation of a sole proprietorship or LLC company under the Company Commercial Law 2015
• VAT registration with the Federal Tax Authority
• A registered office for business documentation and legal billing

After you are ready with the above-mentioned requirements, you will need to apply for a license with the concerned economic department with:

• A legal trading name for your business
• Registration with any of the UAE’s customs and ports authorities for import and export activities
• Apply for an initial approval certificate, which is valid for six months
• Open a corporate bank account that will suit your business needs

Also read How to Open a Business Bank Account in the UAE for Entrepreneurs 

Difference between E-Trader License vs E-Commerce License

As it is clear from the above-mentioned details, the main difference between an e-trader license and an e-commerce business license is that the former is used for small businesses while the latter is for bigger businesses.

Apart from this fundamental difference, there are several other factors that set these two apart. Learning about the differences will help you understand which license suits your business. 

Here are some of the other differences between the e-trader license and the e-commerce license:

1. Size of Business
2. Business activities
3. License registration process
4. Cost of obtaining the license

Read How Business Setup consultants in Dubai can help you with your business.

A&A Associate, one of the best business setup consultants in Dubai, can help you decide which type of business license would suit your online business. We can help you set up your business while you sit back and relax knowing your business is in safe hands. 

Contact us today to take full advantage of our consultations!