How to Start Your Business in Dubai with the E Trader License
23rd June 2020 Updated 12th September 2023
There was a lot of excitement when the Dubai Economy (DED) opened up its E Trader License to Dubai expats after it was previously only available to Emirati and GCC nationals. The excitement for the license was from Dubai expats wanting a cheap trade license to operate a home business. However, the E Trader License has also raised some confusion.
History of the E Trader license
The e trader license was initially only available to Emiratis and GCC nationals living in Dubai. It was a cost-effective license which enabled them to have a home business and promote their goods and services via websites and social media.
E Trader License or Trader License?
The terms seem to be interchangeable and that is where some confusion has arisen. The E Trader License is an initiative to license business activities on social networking sites. However, nowadays it is referred to as 'DED Trader' or 'Trader License'. The actual license is called a 'Merchant License'.
To add further confusion, when the license was made available to Dubai expats, other than GCC nationals, the excitement generated was due to the anticipation that they would be able to sell online and via social media sites. Unfortunately, whilst there are thousands of business activities available to be selected for these licenses, the 'trading', or 'selling' activities are not available to the non-GCC expats in Dubai.
E Trader license activities for Dubai expats
Non-GCC expats in Dubai can get E Trader licenses for professional services, e.g. a make up artist and hairstylist; but, as mentioned above, the license doesn't enable them to import and sell goods. Some activities are restricted by nationality, so its essential to check in advance.
Up to a maximum of 10 activities can be on one license, providing they are 'related' as per the DED's list of activities. Multiple activities on the e trader license doesn't increase the cost.
Who is the Dubai E Trader license suitable for?
The E-Trader license is ideal for the Dubai expats who:
Want to run a small business from home
Want to own their business 100%
Want to set up a side business whilst continuing their job
Want to test their entrepreneurial skills
Want to test the market for their business services
Stay-at-home spouses
What are the requirements for a Dubai E Trader license?
The applicant must be a resident with a Makani number in Dubai
The applicant must have a valid Emirates ID
The applicant must be over 18 years old
What are the advantages of the Dubai E Trader license for expats?
Here are the great things about Dubai's E-Trader license for expats:
Cheapest license available in Dubai. The license is renewable annually and therefore the fees are payable annually too.
100% ownership - no need for an Emirati local sponsor
Individual ownership - ideal for an individual starting a business
Quick & easy to set up online
Enables the provision of activities throughout Dubai (If you wanted to provide your services in another Emirate, then it would be necessary to obtain a trade license in the respective Emirate and Gateway Group can help you with this too.)
Can have multiple activities on the license
Can have a company name rather than just the individual's name, e.g. 'Speedy Musical Instrument Repair and Maintenance' rather than just 'John Doe', which looks more professional
Can have a corporate bank account (this is subject to the bank's own account opening requirements)
Will have a trade license and therefore be operating legally, thus increasing consumer confidence in your business.
What are the restrictions of the Dubai E Trader license for expats?
The Dubai E Trader license for expats (non Emirati national and non GCC national) does have some downsides to be aware of:
Does not provide the expat with a residence visa
Does not enable the expat to employ staff - effectively, the individual is a sole trader working on their own
Does not enable the expat to lease commercial premises e.g. office space, workshop or commercial kitchen
Does not enable the expat to sell goods, either retail of wholesale (however, do note that Emirati nationals and GCC nationals can sell goods with the E trader license)
Restrictions on activities by nationality - check in advance!
Individual ownership - so friends and family can't collaborate on a new business idea.
Who ISN'T the Dubai E Trader license suitable for?
The E Trader license isn't suitable for everyone. It is not suitable for people in the following circumstances:
Applicants who do not live in Dubai
Applicants who need the license to provide them with a visa and Emirates ID
Applicants who need to lease and work from a commercial premise, such as a shop, garage or office
Applicants who intend to scale up their business and employ staff
Applicants wanting to do their business outside of Dubai e.g. in Abu Dhabi.
Business licenses are unique to their owner - one size doesn't fit all. In this instance, you might not meet the criteria for having an e trader license, it might not enable you to carry out the activities you want; or, it may be too restrictive for your business strategy.
What business license can you have if the E Trader license isn't suitable?
As you will understand from what you have read above, there are various criteria which may make this E Trader license unsuitable for your individual situation and future plans. This is the same with all types of business licenses in Dubai. But, don't worry, if the E-Trader license isn't the right fit for you, there are a number of other license types which you can explore and this is where Gateway Group can really add value to you starting your business by ensuring you get the right license to fit your needs.
How Gateway Group helps start-ups in Dubai
Gateway Group is the authority on company formation in Dubai. We cut through the red tape and the jargon to focus on YOU as an individual, your actual requirements for starting a business and your goals. Once we know you and understand your circumstances, we can present the trade license option(s) suitable for you - along with the pros and cons for each based upon your situation, so that you can make an informed decision on how to setup your business. We appreciate that you are an expert in your field and don't necessarily know how to select the right business license when you are bombarded with advertising, so we make it simple - like the information provided above - so you can clearly see the right business license for you. Then, Gateway's on-the-ground team will organize your trade license for you. Let's get started together.
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Written by Jenny Hunt
Founder, Gateway Group, Abu Dhabi & Dubai, United Arab Emirates
FORBES' Top 100 Most Influential Women in the Middle East
