Free Zone trading vs Free zone ecommerce license
When you are going to start a trading business in a free zone, you always get confused between licenses. It’s vital to have a UAE trade license to continue doing business. And thereby you need to identify the right license because this license highlights all the business activities you can conduct. So, you need to acquire a proper license as per your business.
When you check types of free zone trade licenses, you come across two options, one is ecommerce and second is general trading license. So, you need to make a difference between freezone trading and free zone ecommerce licenses. Once you know the main distinction, it will become easier for you to pick the right kind of trade license in UAE.
So, let’s begin and uncover:
Difference between free zone trading and ecommerce license
Here is everything you need to know about both kinds of trade license Dubai:
Basic concept
When you have a free zone trading license, it permits you to continue doing import and export of specific quantity and number of products within your free zone.
On the other hand, when you own an ecommerce trading license then it allows you to conduct an ecommerce business. You can acquire and sell products through online platforms. You can only sell those products whose suppliers are available in the country.
Don’t forget to explore types of trade licenses in Dubai
Business operations
With an e-trading license, you can sell products only in the freezone whose license you get. However, you won’t be allowed to sell products directly to customers in the mainland. If you plan to sell products in the mainland, then you need to partner with local distributors and agents.
As far as an ecommerce license is concerned, your business won’t have any direct physical contact with the customers. All transactions happen online. Also learn about what is the cheapest trade license in UAE?
Local distributor
There is a need to have a local distributor or agent for every business with trading license. You won’t need a local distributor for an ecommerce license. Learn about how to get a trade license in Dubai without a local sponsor?
Payment gateway
Every ecommerce business in freezone can make the most of direct payment gateway provided by banks. However, when you have a general trading license in Dubai, you won’t get a direct payment gateway from banks.
Office requirement
You can’t acquire a general trade license in a free zone unless you have an office. It’s important to acquire an office where you run business operations or a warehouse where you store the goods. However, if you apply for an ecommerce trade license in UAE, you don’t need to have a physical office space. It’s because your complete business is online and a virtual office is enough.
Custom duty
If any imported goods are taken out of the freezone, the trade license owner needs to pay 5% custom duty. However, when you have an ecommerce license, all your goods are handled by a supplier. Thereby, no custom important is levied. Must read: How to get Sharjah trade license
Operation cost
The cost of running a general trade business is more than an ecommerce business. It’s because you need to have an office and run business operations either in a warehouse and office. On the flip side, the cost of business with ecommerce trade license in the UAE is low. It’s because you won’t have to lease a warehouse or office. Learn why Dubai is best place for trading business.
Product registration
When you have a general trade license Dubai, you need to register your products with the relevant municipality in the free zone. But an e-commerce trade license holder doesn’t have to register any product because product registration matters are already handled by the supplier.
Wrap up
Finally, you know the main difference between freezone trading license and freezone ecommerce license in UAE. You might have some other questions related to both licenses. So, whatever question you have in mind, you can get a clear answer from business consultants at Prospr. Although we have clarified the main difference but still you have some ambiguity and confusion regarding any type of business license, you can book a consultation with us and get answers to all the questions.
