Selling on Social Media is big business. From stay-at-home moms and dads to students and graduates looking to earn an income, Social Media makes it easy to buy and sell items. Across many platforms, such as Facebook, Twitter, Instagram, Amazon, WhatsApp, forums, websites, blogs, and more, sellers have access to massive markets. Selling clothes, accessories, electronics, sports goods, homemade food, used cars is popular in the United Arab Emirates – and that is why you need a trade license for customer protection and goods protection.
Today, it is far easier to sell to customers thanks to the engagement of Social Media. No matter how big your business is, the price of your products, you need a trade license to legally be allowed to sell on Social Media in Dubai and the rest of the United Arab Emirates.
In this article, we’ll show you why you need a trade license, which trade license to get, how to update your visa status, and how to operate an e-Commerce business in Dubai, UAE. Start selling with your new business by contacting our specialists at Trade License Zone.
Selling on Social Media as an e-Commerce Business
No matter what you’re looking to sell or the size of your business aims, with Social Media you can scale it up for lucrative rewards and profits with very little overheads. Social Media allows sellers to engage with customers on a one-to-one basis, build an online brand, market to wider audiences, and Social Media boosts traffic to your product store, blog, or website for higher sales figures.
It is legal to sell on Social Media and online in the United Arab Emirates – so long as you have a relevant trade license and visa in place. With the rise of counterfeit goods and other illegal transactions on Social Media and online platforms, the UAE government has the authority to shut down any illegal websites and online shops – with stiff penalties of up to AED 500,000 for lawbreakers.
As we’ve mentioned, it is a legal requirement to have a trade license, company, and relevant visa status for the social selling of items. There are two types of trade licenses applicable to online shopping business setup for foreign nationals: an e-Commerce License and an e-Trader/Social Media Influencer License.
Which is the Best Trade License for Selling on Social Media?
The two most common types of trade licenses for selling on Social Media are the e-Commerce License and the e-Trader/Social Media Influencer License.
#1: e-Trader/Social Media Influencer License:
The e-Trader/Social Media Influencer License is aimed at individuals selling services on Social Media. A Brand Ambassador or Social Media Influencer is deemed a business activity in the UAE. The Electronics Media Regulation Law of 2019 established the e-Trader License and defined its functions and scope: it is a single shareholder or freelancer working from home. This type of company may not hire staff, rent space, or open a physical shop.
#2: e-Commerce License:
An e-Commerce License issued by the Ministry of Economy and the Telecommunications Regulatory Authority entitles an individual to sell items on Social Media in a regulated fashion – for buyer protection and seller protections, too.
With a few simple steps, you can start your own e-commerce company. If you’re not familiar with trade licenses needed for an online business, Trade License Zone is here to help, By contacting our team of experts, we’ll guide you through choosing the right trade license, setting up your new company, liaising with government agencies, assisting with your visa and work permit, and getting you trading as quickly as possible in the UAE.
Steps to Obtain a Trade License to Sell on Social Media
The digital age doesn’t mean a free-for-all in terms of setup up an online shopping platform or business activity. Will Dubai (and the United Arab Emirates) change its policies regarding e-Commerce and social selling? It is unlikely. It is straightforward to obtain a trade license and set up a company. These steps will help you get up and run in compliance with the business laws of the UAE.
Step 1: Partner with Trade License Zone
Partnering with a local business setup agency such as Trade License Zone is the first step to opening any type of business in Dubai, UAE – and we have vast experience in dealing with ecommerce business and the ecommerce sector. To benefit from the legal structures of operating with a trade license, you will need to follow a strict business structure and formation regulations. Our specialists at Trade License Zone will manage all aspects of your company formation process and guide you on the various governmental and municipal trade regulations for operating in the UAE. We will also guide you in the additional documents required for the visas, entry permits, and other such visa services.
Step 2: Choose a Business Structure
Free Zones are special economic zones for dedicated industries, such as e-commerce businesses and e-commerce sales. The different Free Zones offer various benefits, such as tax incentives and business support services designed for each industry. Free Zones not only offer trade licenses to businesses but also access to first-class infrastructure, business clients, skilled workers, and a high volume of customers. A free zone company allows you access to the local market and the world market.
Step 3: Choosing and Registering a Business Name
Trade License Zone will help you select the right name for your online business and e-commerce license. According to Dubai’s Registry Office, the business setup name may not include any offensive or blasphemous language, nor any references to Islam or Allah. As foreign investors, you may include your name in your company name for the UAE market and Dubai economy, but you must use it in full rather than just your surname or initials. We’ll then check if the name is available to be registered.
Step 4: Notarize your Company’s Documents
During this process for your online business’ company and visa, you’ll also need to apply for the notarization of your company’s documents. Once the Registry Office has approved your company’s name, you can have the business’ Memorandum of Association (MOA) and Articles of Association (AOA) notarized with the Dubai Department of Economic Development (DED).
Step 5: Submit your Business License Application
Once your documents are notarized and your application forms are completed for your e-commerce license, we will submit them along with your business plan to the Department of Economic Development (DED) in Dubai (and the Department of Tourism and Commerce Marketing for Tourism Licenses). The list of documents required for e-commerce companies for a successful approval are:
- 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
Step 6: Getting your Trade License
Once approved, the DED will issue your company with a relevant trade license. This process usually takes 2 weeks, but because of the limitations of COVID-19 restrictions, this may take up to 4 weeks.
Step 7: Your Visa
Whether you’re sponsored on a Family Visa or other type of visa, you’ll need to comply with the UAE’s visa regulations to trade legally. You’ll need the sponsor of your visa to 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 zone in which they live.
Step 8: Getting your Visa
Once your visa application has been processed and the updated details affixed to your passport with your new Emirates ID, you can start trading as an online business.
Conclusion
Starting your own online business means you’ll need an e-commerce license to trade legally in the UAE. Partnering with a company formation specialist such as Trade License Zone will enable you to get started without delays.
While the trade license process has been streamlined and simplified by the government, it still takes some hard work and in-depth knowledge of the region, its markets, its many customs and regulations to make the right decisions.
That’s why it’s always advisable to sign up for the services of a UAE business setup company to guide you on your company’s license and setup based on your needs and budget.
When you work with Trade License Zone’s professional consultants, we’ll guide and manage the entire incorporation process for you, and guide you through the latest government regulations regarding your trade license application and business needs. Get in touch today for a personalised quote and competitive advantage.
We’ll give you peace of mind that your trade license and visa applications are free from errors and omissions – both of which can lead to delays and rejection. All you need to provide is some basic documentation and some information about your company. Then, sit back and let the experts take care of the rest – managing your license and visa applications, communicating with all relevant government departments and authorities, and reporting back when you’re ready to trade. It is that simple