To engage in any commercial activity lawfully, one must first get a license. However, there are certain circumstances where a person is not involved in a full-fledged business and just works from a tiny office or from home. However, in order to conduct business in Dubai, this structure also necessitates the acquisition of a license. This is referred to as an e-trader license.
People frequently mix up an e-trader license and an e-commerce license. Let's take a closer look at what these two licenses are all about:
What exactly is an E-commerce license?
The e-commerce license is given to persons who operate in the e-commerce industry. This entails creating an online store and delivering items to customers who purchase them online. E-commerce is a rising industry that has captured the attention of many, particularly during the epidemic.
What exactly is an E trader license?
The e-trader business license, on the other hand, is similar to the e-commerce business license. It differs, however, in that it is available to those who run a small home-based business. This business can include professional services such as plumbing and mechanic services, as well as the sale of handmade goods. Sellers may use both direct marketing and social media to attract and sell their services and goods. The Department of Economic Development DED issues it, and the DED assures that only those holding the license are permitted to serve in order to reduce and eliminate the possibility of scams and counterfeit items entering the market.
What Is the Difference Between an E-Trader and an E-Commerce License?
Several examples may be used to explain the differences between the two licenses. Despite the fact that both permits are given by the Department of Economic Development DED, the implications are distinct.
For begin, the size of the company demonstrates the fundamental distinction. With an e-commerce license, you may already run a full-fledged business with a website, numerous social network handles, and foreign clientele.
The e-trader license, on the other hand, is utilized by small firms. It enables businesses to work from home while investing in a limited quantity of goods. However, if this becomes a successful business, it will lead to the creation of an e-commerce firm or others of its like, as it is no longer a small scale business.
Activities Permitted by an E-Commerce License
An e-commerce license, like other e-commerce enterprises, can offer access to a variety of activities. One might invest in selling products such as:
- Jewelry, valuable stones, and so on.
- Electronics, gadgets, and so on.
- Clothes, accessories, and so forth.
- Household, home remodeling, interior design, and so forth.
- Machine components, spare parts, and so forth.
Sports equipment, for example.
Goods transportation, etc.
Activities Permitted by an E-Trader License
Based on the premise that an e-trader license is for firms that operate from home, owners are permitted to engage in the following activities:
- Professional services such as small-scale IT consultancy, plumbing, and maintenance, among others.
- Selling handcrafted items
- Promotion of social media accounts
- Event administration
- Services for photography
If you are unsure if the services you are providing belong within the e-trader license category, you can contact the DED.
What Are the Restrictions on Obtaining an E-Trader License?
Even while the e-trader license is an excellent tool to legally establish small size footings, it does have certain limits, which are as follows:
Only GCC or UAE residents are permitted to sell items. This implies that anyone utilizing the e-trader license cannot open a physical store or begin selling commercially.
The license does not include a visa for an investor. The e-trader license applicant must have an Emirates ID or a Dubai residency visa.
Only a business with three employees can profit from the license.
The e-trader license is only valid in the state in which it was issued.
If you want to sell in other states, you must first obtain permission from those states and then apply to the DED.
A Makani or Ejari number is required.
Who Is Eligible for an E-Commerce License?
Anyone with an Emirate ID or who lives in the UAE can obtain an e-commerce license. To obtain the license, people must be at least 18 years old. Furthermore, recruiting under the license is not permitted.
If one want to hire people, the firm must be registered with the DED. Furthermore, as a result of business formation, the corporation would require trademark registration.
Who Is Eligible for an E-Trader License?
Residents of the UAE and the GCC, as well as international citizens, are eligible to get an e-trader license. However, foreign nationals are subject to the constraints of the e-trader license in terms of the sort of activity that can be included in the license.
E-Commerce and E-Trader License Fees
The following is the cost of an e-trader license:
AED 1,070 for a general e-trader license
AED 1,370 for a business e-trader license (includes AED 300 fee for membership into Dubai Chamber of Commerce)
The cost of an e-commerce license in Dubai is determined by a number of variables. This covers the size of the business one is going to start, the total number of investors, the zone in which the firm will be located, and so on.
Because of the low-cost installations, most individuals prefer to establish their e-commerce firm in a freezone. E-commerce licenses start at AED 5750, depending on business requirements.
Do not hesitate to contact us if you need more detail on this topic.