E-Trader Licence in Dubai
The government of Dubai has set its focus on becoming a leading e-commerce hub and has rolled out a number of initiatives to improve economic activity. One of these initiatives is targeted at making it easier for entrepreneurs to swiftly acquire the e-trader licence, which allows them to sell products and services online or through social media.
Many people ask the questions “What licence do I need to sell online in the UAE?” and “Is it legal to sell through Instagram and other social media platforms if you don’t have the correct licence?”. Many people do not realise that it is illegal in the UAE to sell products and deliver services without the appropriate licence.
The e-Trader Licence is designed to bridge that gap to allow an affordable, quick, uncomplicated licence set up for UAE residents or citizens.
What is the Dubai e-Trader Licence?
The e-Trader Licence in Dubai (also just called the ‘Trader Licence’) was originally launched in 2017 and is designed to help entrepreneurs sell services and products, both on social media and other online platforms.
The e-Trader Licence was introduced and is managed by the Dubai Department of Economic Development (DED). The new licence was launched by the DED following efforts to crackdown on counterfeit and fake products being sold on social media platforms like Instagram, Facebook and other online market places. The licence aims to regulate the sale of products and services conducted through social media in Dubai. The initiative continues to enhance transparency and customer confidence in online shopping. While online shopping becomes more secure with the e-Trader License, it also protects the trade name and enables the licence owner to reach out to customers across exhibitions and conferences.
For individuals living in Dubai, who already have Dubai residency or UAE Citizens who wish to start a small business from home or using social media and other online market places, this licence is a low cost and straightforward way to set up a licence to compliantly sell products and services in the UAE.
What are the requirements to obtain an e-trader licence?
The e-Trader Licence allows UAE residents and UAE citizens to obtain a licence without the requirement of a Local Sponsor or National Service Agent and at a significantly reduced cost.
This is a new development and an ideal cost-effective solution for individual business owners looking to acquire a licence to sell professional services and products via social media.
The e-Trader Licence does not require an office space, meaning business owners can work from home to promote and sell products and services through their social media accounts or on a personal website. The licence owner can also reach out to customers across exhibitions and conferences and market places.
There are however, some limitations with regards to trading of physical products and goods. Commercial trading activities using the e-Trader Licence are only available to GCC nationals. Non GCC nationals can only sell professional services with the e-Trader Licence, for example marketing services, management services, consultancy services, web design and advertising services can all be undertaken.
Key benefits of the e-Trader Licence:
- You own the company 100% yourself – this is a ‘sole trader’ or ‘sole establishment’ structure, so the company is full owned and not distinct from the individual. This is not a limited liability company structure.
- No Local Sponsor, Local Partner or National Service Agent is required for this licence.
- No office space is required.
- You can obtain up to 3 employment visas if required.
Key limitations of the e-Trader Licence:
- The Licence offers a variety of activities. However, commercial trading related activities (for example selling physical goods or products) are available for GCC nationals only.
- The individual owner must already have a Dubai resident visa and Emirates ID. This licence does not provide an investor visa for the owner.
- A maximum of 3 employment visas are available with this licence.
- This licence does not allow the owner to open a physical shop or commercial unit.
- You can only sell products or services within Dubai. If you wish to sell in Abu Dhabi, you will have obtain a separate e-Trader Licence in Abu Dhabi. In Abu Dhabi this is called the Tajer Licence. See our article [here] for more information on setting up an e-Trader licence or Tajer licence in Abu Dhabi.
- The owner must be able to provide an Ejari and Makani number to show they live in the Emirate of Dubai.
What are the requirements to get an e-trader licence?
The licence is available for UAE & GCC nationals and foreign nationals. There are two main types of e-trader licence, both types have a wide variety of activities available:
- Commercial licence
- Professional licence
UAE Nationals and GCC Nationals can obtain either a professional or commercial license but, foreign national expats can only obtain a professional license.
The e-Trader is still subject to VAT and if the annual turnover of the company reaches the minimum threshold, then the company must register for VAT and charge VAT as with any other company in the UAE.
The e-Trader owner must meet the following requirements to set up an e-trader Licence:
- Be based in Dubai and hold a valid Emirates ID
- Must be aged 21 or above
- Reserve a trade name
- Pay the required fees within 24 hours of licence issuance
- Renew the licence annually within a month of the expiry date. If licensee fails to do so, the licence will be automatically cancelled
- Must complete the registration process with the Dubai DED
PRO Partner Group can assist you to ascertain the correct licence type and activities for your business and can assist you with all relevant steps to set up the e-Trader Licence. Please contact us below for more information and assistance.
What are the required documents for the e-Trader Licence?
- Registration process through Dubai DED
- Passport, UAE resident visa and Emirates ID
- Trade name reservation
- Dubai based Ejari
What are the costs and time frame to set up an e-trader licence?
The current application processing fee from Dubai DED is AED 1,200.
There will be additional fees for a commercial activity.
Licence fees can be paid up to 24 hours from the issuance of the payment voucher at Dubai DED.
The licence will need to be renewed annually – annual renewal fees will apply.
The Dubai e-Trader Licence normally takes around 5-10 working days to set up.
How can PRO Partner Group help?
PRO Partner Group can assist you with advice on whether the e-Trader Licence is right for your business and can assist to set up the licence correctly and obtain the relevant activities for the company. If you need assistance on this or any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.