There are two licenses that you can choose from when deciding to start an online business in the UAE. They are the E-Trader License vs E-Commerce License. Both of these licenses have their own perks.
Additionally, both of them allow different kinds of business activities. This means that different types of online businesses will require a different type of online business trade license. That is why today we are going to look at the difference between E-Trader License and E-Commerce License.
What is the E-Trader License in Dubai?
The E-Trader License in Dubai was released for small home-based online businesses. This means that it was initially meant for stay-at-home moms and small entrepreneurs who want to sell their crafts online.
However, since the E-Trader license allows you to sell your products through social media platforms, other businesses started to pick it up as well. Additionally, the E-Trader license gave online businesses the credibility they needed to gain the trust of their customers.
Here are the business activities allowed by the E Trader license Dubai:
- IT consultation
- Online services
- Selling homemade goods online
- Social Media Marketing and promotion.
- Online event management, etc.
You do not need a physical office space to start a business with the E-Trader license in Dubai.
What is the E-Commerce License in Dubai?
On the other hand, the E-Commerce license in Dubai was released for bigger businesses that wanted to run an E-Commerce in the country. This means that the E-Commerce license allowed all the business activities from the storage and transportation of products to online advertisement and transactions.
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On top of this, the E-Commerce sector really kicked off during the COVID-19 pandemic and the lockdowns. This is because the lockdowns forced people to get their essentials online through E-Commerce websites.
Here are the business activities allowed by the E-Commerce license in Dubai:
- Starting an E-Commerce website.
- Storing physical goods.
- Transportation of goods.
- Advertising your products online.
- Selling products online.
- Selling digital goods.
- Machine parts, spare parts, etc.
- Sports goods, etc.
- Delivering products to customers.
- Accepting online payments.
The E-Commerce license in Dubai offers a larger scope than the E-Trader license. However, you need to have a bigger starting capital with a lot of helping hands to fully utilize the E-Commerce license in Dubai.
Difference Between E-Trader License vs E-Commerce License
You might have already caught on that the main difference between the two licenses is that the E-Trader license is meant for small businesses while the E-Commerce license is meant for bigger businesses.
Besides this fundamental difference, there are other factors that set these two licenses apart. Furthermore, learning these differences will help you decide which license you will need for your business.
Here are the differences between the E-Trader license vs E-Commerce license in Dubai:
1. Size of business
As we have mentioned before, the E-Commerce license is for big businesses while the E-Trader license is for smaller businesses. To clarify how big the difference in size actually is, businesses with the E-Commerce license need a wide array of departments that will take care of different operations like sales, delivery, storage, etc.
While businesses with the E-Trader license can essentially be a solo operation running from someone’s basement. However, if a business with the E-Trader license grows and wants to expand its operations, it can apply for the E-Commerce license whenever they want.
2. Business Activities
The business activities allowed by each of these licenses are what dictate the size of the business that these licenses cater to. For example, the E-Commerce license requires you to have an office space for your business.
So, if you want to run your business from the comfort of your own home then you cannot accomplish this with an E-Commerce license in Dubai.
Additionally, the E-Trader license allows you to start a business with a limited starting capital, while the E-Commerce license requires businesses with bigger budgets.
3. License Registration Process
The process of obtaining the E-Trader license in Dubai is easier than the process of obtaining the E-Commerce license in Dubai. This is because the E-Trader license allows far less complicated business activities than the E-Commerce license.
Additionally, you need to obtain an office space when applying for the E-Commerce license while you can work from your home with the E-Trader license in Dubai. However, the similarity between both of these licenses is that both of them are issued by the Department of Economic Development in Dubai.
Lastly, the registration process should not be the deciding factor for which license you want to get because the Company Setup experts can obtain it for you easily.
4. Cost of Obtaining the License
Last but not the least, the cost of obtaining these licenses differs as well. This is because of two main reasons. Firstly, the business activities allowed by the E-Commerce license make it more expensive.
Secondly, the additional cost of obtaining an office space for the E-Commerce license drives up its overall expense. However, even if it costs more, the E-Commerce license is more powerful if utilized correctly. That is why it is suggested that you go for the E-Commerce license only if you have the resources to fully utilize its potential.
To clarify, the price of the E-Trader license is only AED 4,050 while the e commerce license Dubai cost is 8,050.
Limitations of the E-Trader License
If the E-Trader license is easier and cheaper to get, then we should get that one, right? Here are the reasons why the E-Trader license can limit the potential of bigger businesses:
- Less flexibility
- Fewer business activities
- Limited hiring capabilities
- Business can be owned by a maximum of 3 people
- Only valid in the Emirate it is issued in
How can Company Setup Consultants help you?
If you want to obtain either the E-Trader license or the E-Commerce license in Dubai, but you do not know where to get started, then you are in the right place.
Additionally, if you are confused about which license you need to get for your particular business, feel free to contact the experts at Company Setup Consultancy. Our professionals have started various online businesses all over the UAE. Contact us today and hit the ground running.
To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at [email protected].
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