One needs to have a license to proceed legally with all economic activities. Rather than face-to-face interaction, more individuals and businesses prefer online modes of transactions and sales and this change has caused many to start online businesses with e-trader and e-commerce licenses. For those who are interested to conduct online activities legally, these licenses are a crucial and mandatory requirement within the borders of the UAE. This blog sums up the main differences between an e-trader license and an e-commerce license.
When deciding to start an online business in the UAE, the entrepreneur can choose between e-commerce and an e-trader license. Both of these licenses allow different kinds of business activities and have their perks. A different type of online business trade license is required by the different types of online business setup in Dubai.
What is an E-commerce License?
Provided by the government of UAE, an e-commerce license is a license that allows its owners to administer business activities relating to the purchase and maintenance of product inventories as well as valid permission that facilitates the business to distribute said inventories as well. For this license to apply to the business, all of this should be done through the means of an online platform like websites or social media channels.
Bigger businesses that want to run e-commerce in the country were issued e-commerce licenses. All the business activities from the storage and transportation of products to online advertisement and transactions are allowed by the e-commerce license. However, to fully utilize the e-commerce license in Dubai, the entrepreneurs need to have a bigger starting capital before considering a company setup in dubai.
The business activities such as starting an e-commerce website, storing physical goods, transporting goods, advertising their products online, and selling products online are allowed by the e-commerce license in Dubai. Additionally, they are also allowed to sell digital goods, machine parts, spare parts, and sports goods and also deliver products to customers, and accept online payments.
What is an E-trader License?
The holders of e-trader licenses are allowed to carry out online transactions and it is a relatively new form of license introduced by the government. For small home-based online businesses, an e-trader license in Dubai was released. This was initially meant for small entrepreneurs who wished to sell their products online.
However, other businesses started to pick it up as well since the e-trader license allows them to sell their products through social media platforms. To start a business with an e-trader license in Dubai, the entrepreneur does not need a physical office space. IT consultation, online services, selling homemade goods online, social media marketing and promotion, and online event management are the business activities allowed by the e-trader license in Dubai.
The Major Differences Between E-commerce and E-trader Licenses
Certain characteristics differentiate an e-commerce license from an e-trader license though both seem similar at first. E-commerce licenses apply to foreign individuals as well while e-trader licenses are only applicable to UAE or GCC nationals. E-trader licenses are only issued for residential sites and do not provide as many business activities as that as e-commerce licenses.
The following are some other differences between an e-trader and an e-commerce license in Dubai:
Size of the Business
For people looking for small businesses, an e-trader license is suitable while e-commerce licenses are for big businesses. A wide array of departments that will take care of different operations like sales, delivery, storage, etc are needed for businesses with e-commerce licenses. While businesses such as a solo operation running from someone’s basement can be done with an e-trader license. However, e-trader licenses can apply for the e-commerce license whenever they want if a business with it wants to grow and expand its operations.
The size of the business that these licenses cater to is dictated by the business activities allowed by each of these licenses. An individual cannot accomplish running their business from the comfort of their home without an e-commerce license in Dubai. They are required to have an office space for their business with e-commerce licenses. An E-commerce license requires businesses with bigger budgets while the e-trader license allows an entrepreneur to start a business with a limited starting capital.
License Registration Process
In the process of obtaining an e-commerce license in Dubai, it is easier for the entrepreneur to acquire an e-trader license. It is because, unlike the e-commerce license, the e-trader license allows far less complicated business activities. Additionally, people can work from their homes with an e-trader license in Dubai while they need to get an office space while applying for the e-commerce license.
Cost of Obtaining the License
The cost of obtaining an e-commerce license and an e-trader license has great differences. Firstly, it is because the business activities make it more expensive as allowed by the e-commerce license. Secondly, an e-commerce license drives up its overall expense by the additional cost of obtaining an office space. However, an e-commerce license is more powerful if it is utilized correctly even if it costs more. Only if the individual has the resources to fully utilize their potential, can they opt for an e-commerce license.
The business setup consultant helps the entrepreneurs to obtain either the e-trader or e-commerce license according to their requirements. According to the budget of the business owners, they aid in setting up the business. They would help the entrepreneur with the license application and approval process at the best price in a limited time.