E-Commerce License vs. E-Trader License in UAE: Which is suitable for your business?

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Technology has created a lot of opportunities to make life easier in general, including the way businesses are conducted. Thanks to these innovations, it is easier for entrepreneurs or business owners to grow their business, catering to both local and international clients. If you own an online business and you are considering UAE Freezone company formation, first you must look at acquiring a license that is appropriate to your business.

If you are planning on setting up a business in Dubai that focuses on offering services and products online, you may need to apply for an e-commerce license or e-trader license. While there are similarities, each type of license covers a different scope.

What is an e-commerce license?

An e-commerce license is issued to those that are working in the e-commerce field. This license is meant for those who want to start business in Dubai by setting up an online store while delivering goods to the clients who place their orders online. Over the years, e-commerce has become a growing domain and its popularity has continued to grow amidst the COVID-19 pandemic.

An e-commerce license can grant access to various kinds of activities. One can invest in selling items that would include:

  • Accessories
  • Clothes
  • Electronics and gadgets
  • Jewelry and precious stones
  • Household items, home accessories, and decor
  • Machine parts and spare parts
  • Sports goods and equipment
  • Transportation goods

Who Can Avail of An E-Commerce License?

Anyone holding an Emirate ID, or a resident of the Emirates can avail of an e-commerce license, as long as they are 18 years and above. Recruitment under the license isn’t allowed. If you seek to recruit employees, you must have the company registered with the Department of Economic Development or DED. You will also need trademark registration. If you are not familiar with these processes, you may seek help from service providers offering the best PRO services in Dubai to accomplish these tasks without delay.

What is an e-trader license?

An e-trader license is like an e-commerce license, but it is only offered to individuals or entrepreneurs that are running a small home-based business. This business can include professional services such as plumbing, mechanic services, or selling handmade goods.

The sellers may use social media to attract and sell their services and goods. The license is issued by the DED and aimed to ensure that only those with the license are allowed to offer such services to minimize the risk of scams and counterfeit products.

Based on the idea that an e-trader license is for businesses operating from homes, the following activities are allowed for owners to proceed with:

  • Professional services, including small-scale IT consultation, plumbing, and maintenance.
  • Selling handmade goods
  • Social media account promotion
  • Event management
  • Photography services
  • Who can avail of the e-trader license?

People residing in the UAE and GCC as well as foreign nationals are eligible for getting the e-trader license. However, the limitations of the e-trader license apply to foreign nationals in terms of the type of activity they can include in the license.

What is the difference?

The primary difference is the size of the business. Brands or companies holding an e-commerce license are already running a full-scale business via a website, and various social media handles, and are already dealing with international clients.

On the other hand, the e-trader license is only issued to small businesses. It allows entrepreneurs to operate on a home-based setup while investing in a minimal supply of goods. When the small business becomes successful and ready to cater to a larger market, you will have to apply for an e-commerce license.

If you need professional advice or legal services to secure the appropriate license for your business or know the business setup in Dubai costAustria Business Center offers a range of business solutions and office spaces for rent to meet all your business needs. You may also book serviced offices if you need a meeting room to meet with clients or conduct interviews.


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