Difference between Free zone Trading and free zone E-Commerce License
Are you looking for selling products online through Free zone Company but don’t know which license to apply for?
If you are in dilemma which license will be suitable for your business activity then following difference between Trading License or E-Commerce license has been penned down to put more light.
| Basis | Trading in Free zone | E-Commerce in Free zone |
| Definition | You can import and export of particular or any number of products in the country with Trading license. | E-Commerce License provides online platform for buying and selling of products of Suppliers or third party whose products are already registered / available in UAE. |
| Business Operations | You can sell your products in local market through local distributor or agent Under Trading License. You cannot sell products directly to customer in main land. | You cannot sell your products to client with direct interaction under this license. You have to be in agreement with Suppliers for selling their products which are already available in local market through online website. |
| Local Distributor | You have to appoint local distributor or agent for selling your products in local market in UAE under Trading License. | There is no need of local distributor or agent Under this license, You will be selling products of Suppliers which are already available in UAE. |
| Payment Gateway | You will not get payment gateway facility under trading license through bank directly. | You will have added advantage of payment gateway facility directly by the banks. |
| Office Requirement | Under this license, you might have to lease office or warehouse for storing goods. | There is no requirement of warehouse or office space for this license. With flexi desk facility, you can have this license and products will be store by suppliers. |
| Custom Duty | You have to pay 5% custom duty for importing goods if taken out of free zone. | You don’t have to pay said 5% custom duty as it’s already paid by supplier. |
| Operation Cost | The operation cost of this license will be expensive as client has to lease warehouse or use third party logistics services if required. | The operation cost of this license will be cost effective as there is no need of office or warehouse. |
| Product Registration | Product need to be registered with concerned Municipality if imported. | No Need to register products as it is already registered and traded in local market. Supplier has to have product registration. |
With aforementioned difference, queries related to Trading and E-Commerce has been addressed to larger extent. In case you have any further queries or clarifications, kindly feel free to contact Mr. Pravin, (pravin [at] flyingcolour [dot] com) working as a Senior Business Consultant at flyingcolour business setup services
