Selling on social media has become a lucrative business opportunity, attracting a wide range of individuals, including stay-at-home parents, students, and graduates. Platforms like Facebook, Twitter, Instagram, Amazon, WhatsApp, forums, websites, and blogs provide sellers with access to vast markets. In the United Arab Emirates, popular items for sale include clothing, accessories, electronics, sports goods, homemade food, and used cars. However, to ensure customer and goods protection, it is essential to obtain a trade license.
In Dubai selling online is no different than selling in a brick-and-mortar shop. Both are considered business activities here, so you need a business trade license to perform them.
Social media engagement has made it easier than ever to connect with customers and sell products. Regardless of the size of your business or the pricing of your products, it is legally required to have a trade license to sell on social media platforms in Dubai and the rest of the UAE.
This article aims to explain the importance of obtaining a trade license, guide you in selecting the appropriate license type, provide information on updating your visa status, and offer insights into starting an e-commerce business in Dubai, UAE. To begin your selling journey and establish your new business, you can contact our team of specialists at Company Setup Consultants.
By ensuring compliance with trade license regulations, you can confidently sell on social media and capitalize on the thriving e-commerce market in Dubai and the UAE.
To formally recognize themselves as legitimate businesses, online businesses that are looking to sell on various social media sites will have to apply for the E-commerce license in Dubai.
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Selling on Social Media as an e-Commerce Business
Selling on social media as an e-commerce business offers significant opportunities for profitability and growth, with minimal overhead costs. Social media platforms enable sellers to connect directly with customers, establish their online brand, reach wider audiences, and drive traffic to their product store, blog, or website, ultimately leading to increased sales.
In the United Arab Emirates, it is legal to sell on social media and online platforms, given that you have the appropriate trade license and visa in place. To combat issues like counterfeit goods and illegal transactions, the UAE government has the authority to shut down unlawful websites and online shops, imposing substantial penalties of up to AED 500,000 for offenders.
Compliance with the law requires obtaining a relevant trade license, establishing a company, and ensuring the appropriate visa status for engaging in social selling activities. For foreign nationals, there are two types of trade licenses applicable to online shopping business setups: the e-Commerce License and the e-Trader/Social Media Influencer License.
#1. e-Commerce License:
The e-Commerce License allows businesses to operate as online retailers, conducting sales transactions through their website or social media platforms.
#2. e-Trader/Social Media Influencer License:
the e-Trader/Social Media Influencer License is suitable for individuals who engage in social selling or influencer marketing activities on social media platforms.
Steps to Obtain a Trade License to Sell on Social Media
In the digital age, setting up an online shopping platform or engaging in social selling requires compliance with business laws and regulations. Dubai and the United Arab Emirates are unlikely to change their policies regarding e-commerce and social selling. However, obtaining a trade license and establishing a company in compliance with the existing regulations is a straightforward process. Here are the steps involved:
Step 1: Choose a Business Structure
Select a suitable business structure, considering Free Zones that cater to e-commerce businesses. Free Zones offer benefits like tax incentives, business support services, and access to infrastructure, clients, skilled workers, and customers.
Step 2: Choose and Register a Business Name
Trade License Zone can assist you in selecting an appropriate name for your online business. Ensure the name adheres to the guidelines set by Dubai’s Registry Office, avoiding offensive language or references to Islam or Allah. Foreign investors can include their full name in the company name.
Step 3: Notarize Company Documents
Apply for notarization of your company’s Memorandum of Association (MOA) and Articles of Association (AOA) with the Dubai Department of Economic Development (DED).
Step 4: Submit the Business License Application
Submit your notarized documents, completed application forms, business plan, and other required documents to the DED (and the Department of Tourism and Commerce Marketing for Tourism Licenses). These documents typically include proof of identification and address for directors and shareholders, passport copies, trade name confirmation, lease agreement, and payment for the trade license.
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Step 5: Obtain the Trade License
Once approved, the DED will issue your company the relevant trade license. The process usually takes around 2 weeks, but COVID-19 restrictions may extend the timeframe.
Step 6: Visa Process
Comply with the UAE’s visa regulations to trade legally. If you are sponsored on a Family Visa or another type of visa, your sponsor should apply for a new visa for you from the Federal Authority for Identity and Citizenship (ICA) and the General Directorate of Residency and Foreign Affairs (GDRFA) in the respective zone.
Step 7: Obtain the Visa
Once your visa application is processed, and the updated details are affixed to your passport along with the new Emirates ID, you can begin trading as an online business.
By following these steps, you can establish your online business and engage in e-commerce activities in compliance with the laws and regulations of the United Arab Emirates.
What is Social Media License Dubai?
Dubai sits at the heart of the booming global social media commerce market, which is estimated to be worth billions of dollars. As the influencer capital of the world, Dubai attracts businesses and individuals who leverage social media channels to sell products, services, and advertisements.
To regulate this evolving industry and align it with other sectors in the UAE, licensing requirements have been introduced. One such license is the social media license, which is issued by the National Media Council (NMC). This license allows holders to engage in direct selling on social media platforms using their own accounts or by partnering with brands and agencies. With the assistance of Company Setup Consultants, obtaining a social media license becomes a seamless process.
Who needs a Social Media License in Dubai?
In Dubai, individuals and businesses engaged in selling products, services, or advertisements directly on social media platforms need to obtain a social media license. This requirement applies to influencers, online retailers, brand ambassadors, and anyone involved in commercial activities on social media channels.
The license is necessary to ensure compliance with the regulations set by the National Media Council (NMC) and bring this sector in line with other industries in the UAE. By obtaining a social media license, individuals and businesses can operate legally and maintain transparency in their social media commerce activities.
To apply for a social media license in Dubai, you must be:
- Over 25
- Of good reputation
- Not currently a member of the NMC
What is the Cost of a Social Media License in Dubai?
The cost of obtaining a social media license in Dubai through Company Setup starts at AED 5,750. This fee covers the application process and also includes access to professional coworking facilities and business support services provided by Company Setup.
To make it more convenient for applicants, Company Setup Consultants offers the option to pay the fee through their banking partners on a 0% flexible installment plan, allowing you to spread the cost over time without requiring a down payment.
Additionally, there is an annual membership fee of AED 2,775 payable to the National Media Council (NMC). This fee is required to maintain your membership with the NMC, which is responsible for regulating and overseeing social media activities in Dubai.
Advantages of Selling through Social Media in Dubai
Selling through social media has a lot of benefits in the current business world. For businesses in certain sectors, it is a necessity to have a presence online. Many businesses that previously were very big are out of business now because they could not make the move online.
When you build a presence in social media, you get access to a very big audience that translates to a wider customer base. Selling through an online medium in Dubai specifically has its own perks.
For example, the government has released the online business license or the Ecommerce trade license. Businesses with the Ecommerce license will gain various benefits and perks from the government. The Ecommerce license facilitates businesses in their efforts to sell through social media sites in Dubai.
Here are the advantages of selling through social media in Dubai:
- You can own 100% of your business. That means you do not need to search for local sponsors in Dubai to help you start a business in Dubai.
- The online business license helps you register at the Dubai Chamber of Commerce, so you can easily import and export from the country.
- You can promote your products online and gain a larger customer base.
- You can easily open a bank account here with an Ecommerce license.
What is the penalty for selling on social media without a license?
Engaging in online sales without a trade license on popular social media channels like Facebook, Instagram, and WhatsApp can lead to significant penalties in the UAE. Violators, including citizens and residents, may face fines up to AED 500,000. UAE authorities vigilantly monitor these platforms to ensure fair trade practices and protect consumers from potential online frauds.
Do you need a trade license to sell online in UAE?
Certainly! Selling online in the UAE requires a valid trade license. Operating without the necessary permit is against the law and can lead to severe penalties, with fines reaching up to AED 500,000. Stay compliant and protect your business by obtaining the required license before conducting any online sales.
Do I need a license to sell on Facebook in UAE?
Certainly! To sell on Facebook in the UAE, it is essential to have the correct license. Operating a business without the necessary license is illegal in the UAE. Specifically, for selling from a website, you will need an ecommerce license. Stay compliant and ensure you have the appropriate license before engaging in any online sales on Facebook or any other platform.
How We can Help You?
Looking to kickstart your social media business or obtain a trade license for selling in Dubai? Reach out to Company Setup Consultants now and secure a FREE consultation. Take the first step towards your online success! Contact us today and hit the ground running.
To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.
