The facts about Dubai’s e-trader license and how it can save you money
With many jobs disappearing due to the COVID-19 crisis it does not come as a surprise that more and more people are seeking out alternatives and looking at creating their own business.
During these times, especially one trade license is rising in demand – the DED e-trader license.
A big driver for the e-trader license's success is that it is now the most cost-efficient trade license Dubai has to offer for expats wanting to start a single-owner business or freelance from home.
At an annual cost of just AED 1,070 it is priced significantly lower than alternative licenses that are being offered by freezones or in other emirates which can easily cost you multiples of that amount. Originally only open to Emiratis and GCC Nationals the e-trade license is now open to expats too.
The e-trader covers a long list of permitted business activity groups. These have recently been expanded to meet the rise in demand and offer a wide range of activities, such as photography, marketing services, project management and much more.
A single license can cover up to ten permitted activities which can be chosen upon registering. Do your research beforehand and see if your planned activities are a match. The whole list of available activities can be found on the website of the Department of Economic Activity (DED).
e-trader license – the facts
Such a cost-efficient license is naturally set to disrupt the usual and higher priced licensing business in Dubai. Therefore, it is no surprise that we have a fair share of confusion and misinformation floating on social media about the license costs, license renewal process and its restrictions. So here is the latest:
The annual fee of AED 1,070 for the license is payable upon registration.
The standard license fee is due again when renewing, there are no extra fees or hidden price hikes.
There are also no unexpected fees if you decide not to renew the license after it lapses. Also, there are no “exit costs” imposed by the government.
Some activities are restricted by nationality which you can address during the registration.
Be aware, if you get support registering via an agency (of which there are many in Dubai) they will charge you an additional fee for that service. This can be several hundreds of dirhams, so check what you are due to pay before you action anything.
But is the e-trader license right for you?
Clearly, the e-trader license is not the right fit for every new business as there are criteria that need to be met, including:
Work as a single entrepreneur or a freelancer
Your work is based from your home
Mainly promote and sell your products and services through social media, website or via an online marketplace
You are a resident with a Dubai address code, called Makani
Have a valid Emirates ID
Are over 21 years
This license allows 100% ownership of the business without a local sponsor. You can register your business with a trade name instead of your given first and last name. Not every business license gives you this freedom, offering you more options in terms of branding your business and highlighting its uniqueness.
Opening a bank account under the business’ name is also allowed under this license but is subject to agreement with your bank.
What are the restrictions of an e-trader license?
Does not provide a residence visa – so you will need a separate sponsor
Hiring and sponsoring staff is not allowed
Does not enable to lease commercial premises, e.g. office space
Does not allow to import & sell goods - you will need a different license to carry this out
How to get your license?
While there are more than enough agencies offering to handle the registration process for you – some with a more, others with a less hefty fee – my recommended route would be to visit the DED Café located in Jumeriah. It is an authorized DED service centre. There are no hidden fees or mark-ups for obtaining your license through them. It is fast and efficient, and you can ask all the questions you may have.
Don’t forget to bring your Emirates ID, your Makani number and a credit card as you will be paying the fees on the spot. All in all, you should be able to get the process and paperwork for your license completed in less an hour.
Alternatively, if you know exactly what you are looking for and are happy to do everything yourself, you can apply for your license online and directly with the Dubai government.
Your license will be active more or less immediately and you are able to get your business started right away!