Selling on social media has turned into a big business in this post-pandemic era. From housewives to students, everyone is into a profitable stay-at-home business. Social media makes selling and buying easier by giving access to massive markets. It is a cost-effective platform for budding business ventures. Selling clothes, accessories, electronics, sports goods, homemade food, used cars etc. through social media platforms is quite demanding in the UAE and this is why you need a social media license.
There is no difference between trading online and land trading. Both economic activities require a government-issued trade license. Even though social media platforms make trading more economical through lower investment and effort, it is also a place for fraudulent and illegal activities. For this reason, the UAE government has made it mandatory to have a trade license in Dubai for selling on social media. Owing to the boom of unauthorized selling and online frauds, the Electronic Media Regulations law was launched in March 2019, stating that online activities carried out for commercial purposes must have a trade license in Dubai. The trade license in Dubai is sanctioned by the Department of Economic Development (DED) and the National Media Council (NMC). The law includes the selling of products and services or any other commercial activity through social media. Commercial use of social media by sellers, vloggers, as well as influencers is also a part of the law.
Advantages of selling on social media
- 100% ownership of your business. That is, you won’t need a local sponsor for your business.
- The online business license helps you register at the Dubai Chamber of Commerce.
- Online promotion of the products provides a larger customer base and access to a massive market.
- You can easily open a bank account with an e-Commerce license.
Types of licenses for selling on social media
There are two major types of licenses for selling on social media.
1. E-Trader/Social Media Influencer License:
This is for entrepreneurs selling services through social media. The entrepreneur must be a single shareholder or freelancer working from home and is not allowed to hire staff, rent space, or open a physical shop.
2. E-commerce License
This license is for selling items on social media. Here are the steps to attain an e-commerce license in the UAE for social media selling.
- Partner with Trade License Zone
- Decide over the business structure
- Register your business name
- Notarize your Company’s Documents
- Submit your Business License Application
- Grab your trade license and visa
Documents required for obtaining an e-commerce license
- Proof of ID and address for directors and shareholders
- Passport copies for shareholders and directors
- Copy of trade name confirmation from the Registry Office
- Copy of license application forms
- Proof of initial activity approval from Dubai’s management agencies
- Notarized Memorandum of Association (MOA)
- Notarized Articles of Association (AOA)
- Copy of the lease or property agreement of the company’s physical address
- Payment for a specific trade license
What is the penalty for selling on social media without a license?
UAE citizens and residents may be penalized up to AED 500,000 for selling products or services online without a trade license. In the UAE, social media channels are recurrently monitored by the authorities. Facebook, Instagram, and WhatsApp are the major social media platform used for commercial purposes. Any other platform including these will be strictly monitored for promoting fair trade and preventing illegal deeds and frauds.
To know more
We are always happy to help you at any stage of your business. Frequent delays and rejections may haunt you at the very beginning of your business. But, we make the initial documentation and legalities of your business smooth and hassle-free. Contact us for more details and book your free consultation now!