Do You Need a Trade License in Dubai to Sell on Social Media?

Selling on social media is just similar to trading on land as both are economic activities that require a government-issued trade license. Social media is a simple and cost-effective platform for small businesses and independent entrepreneurs. They require minimum effort and investment but have a greater reach. This blog sums up whether a trade license is needed in Dubai to sell on social media.

With social media, the entrepreneur can scale it up for lucrative rewards and profits with very little overhead no matter what they are looking to sell or the size of their business. Including engaging with customers on a one-to-one basis, social media allows sellers to build an online brand and market to a wider audience. For higher sales figures, social media boosts traffic to their product store, blog, or website. 

Social media has become a playground for many illegal and deceitful activities. The UAE government has made it mandatory to have a trade license in Dubai to safeguard online consumers and entrepreneurs. The UAE commercial law applies to Whatsapp, Facebook, Instagram, and other social media channels as these are the most popular channels used to sell products and services. For selling products or services online without a trade license, UAE citizens and residents may be penalized up to AED 500,000. 

Trade License for Selling on Social Media

For the social selling of items, it is a legal requirement to have a trade license, company, and relevant visa status. An e-commerce license and an e-trader license are the two types of trade licenses applicable to online shopping business setups for foreign nationals. 

E-Trader or Social Media Influencer License 

Business activity in the UAE is deemed by a brand ambassador or social media influencer. It is aimed at individuals selling services on social media and it is a single shareholder or freelancer working from home. Staff or rented space are not hired by this form of the company nor do they open a physical shop.

E-Commerce License 

An e-commerce license entitles an individual to sell items on social media in a regulated fashion for buyer protection and seller protection and is issued by the Ministry of Economy and the Telecommunications Regulatory Authority. 

To obtain a trade license and set up a company, the entrepreneur first needs to partner with a  business setup consultants in Dubai. They will need to follow a strict business structure and formation regulations to benefit from the legal structures of operating with a trade license. They should then select their business activities to get external approvals based on the business activity they mean to perform. 

Entrepreneurs should register a trading name for their business. There are certain criteria for selecting the name for their business. They should not include any offensive language, not any references to Islam according to Dubai's Registry Office. They should also check if their selected name is available to register. The business owner should apply for the notarization of their company's documents during the process for their online business company and visa. 

Entrepreneur should submit their business plan to the Department of Economic Development in Dubai once their documents are notarized and their application forms are completed for their e-commerce license. The Dubai Department of Economic Development issued the company with a relevant trade license once their documents are approved and the process may usually take up to 2 weeks. 

To trade legally, the entrepreneur needs to comply with the UAE's visa regulations. The entrepreneur can then start trading as an online business once their visa application has been processed and the updated details affixed to their passport with their new Emirates ID. 

Advantages of Selling Through Social Media 

In the current business world, selling through social media has a lot of benefits. It is necessary to have a presence online for businesses in certain sectors. Because they could not make the move online, many businesses that previously were very big are out of business. Entrepreneurs get access to a very big audience that translates to a wider customer base when they build a presence on social media. 

Selling through an online medium has its perks specifically in Dubai. An E-commerce trade license or online business license is released by the government of UAE. Various benefits and perks are gained by businesses with e-commerce licenses from the government. To sell through social media sites in Dubai, the e-commerce license facilitates businesses in their efforts. 

The advantages of selling through social media in Dubai include 100% ownership of the entrepreneur's business. This means that to help them start a business in Dubai, they do not need to search for local sponsors in Dubai. They can easily import and export from the country as the online business license helps them register at the Dubai Chamber of Commerce. With an e-commerce license, they can easily open a bank account there and can promote their products online, and gain a large customer base. 

To trade legally in the UAE, an entrepreneur requires an e-commerce license. To get the license without delays, it is better to partner with a company formation specialist. To guide them on their company's license and setup based on their needs and budget, it is always advisable to sign up for the services of a UAE business setup company.