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Is it illegal to sell on social media in the UAE?

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UAE residents who sell anything online without a license may face stiff penalties up to AED500,000 – that was what news reports say. This includes stay-at-home moms who are operating online food catering, tailoring, beauty businesses, and apparel, among others.

Does this include selling on Facebook and WhatsApp?

Two years ago, the UAE Ministry of Economy had teamed up with the Telecommunications Regulatory Authority to shut down unauthorized e-commerce websites and social media pages.

In the UAE, residents are required to have a trade license in order to carry out any commercial activities online, including Facebook, Instagram, etc. Sellers in Amazon need a license to be eligible to sell too.

But it is pandemic, is this law not relaxed?

The number of people selling on social media in the UAE has drastically increased in the last 3-4 months. Most of the new sellers are those who have been laid off from their jobs. During these difficult times, online selling is the most available opportunity to stay afloat.

Unfortunately, in the UAE, it is not legally acknowledged. Every type of business needs to abide by certain compliance in order to operate. Food businesses need to comply with health and sanitation standards; beauty products need to be governed by cosmetics regulations; online selling needs quality assurance and security, etc. These standards are required to protect consumers. Especially during this pandemic, it is highly advised that transactions between businesses and consumers go through rigid disinfection and sanitization measures.

If there’s money involve, it must be done legally

According to a report by The National, “if you are doing any kind of activity that involves money, then you are bound to register yourself with the relevant authorities”

In a chat with Atty. Barney Almazar of Gulf Law, he said, “the minimum requirement is an e-Commerce license. Food business though needs more than a license. They need to undergo inspection and obtain clearance.”

Asked if there can be any ‘humanitarian consideration’ especially during these times, he said, “Food safety is very important. The licensed businesses are under strict compliance rules, so it is unlikely that the government will not be imposing stricter measures against those who are not licensed.”

Rightly so. If customers face food poisoning and other health issues, these unlicensed businesses could face stiffer sanctions and penalties.

How about the buying customers?

I must admit, I indirectly bought from one seller recently, and the conviction settled in only after realizing that I played a role in tolerating the activity. It is actually between tolerance and support. My consciousness that time was toward supporting that someone in need and not in the guilt of tolerating their activities.

If the person was a friend, I would advise him to do it the legal way than to succumb to regretful and conscientious consequences later.

What are the consequences?

We are all facing tough situations. Employees are losing jobs, and so are legit companies closing businesses.

The regulations around doing such small-scale businesses are usually taken for granted because cottage-industries are so common and acceptable in our home countries.

Yes, you may not be harming people…

But, it is not fair to those people who duly comply with the regulations and pay for a license to do certain online business activities.

What if a customer would want to return an accessory? What if the virus gets transmitted through the exchange of commercial goods? What if food poisoning happens? Who will protect who?

In addition to putting themselves at risk of incurring hefty fines and possible criminal sanctions, the guilt and conviction of doing something not legal will always be there to cloud your thoughts.

Atty. Barney Almazar suggests that those who want to sell on social media better partner with someone who is licensed.

Do we see the landscape changing?

If it’s only a matter of making both ends meet, and not really about pursuing a business, will there be any special considerations? UAE, being a pro-consumer and pro-business country, may not have such a resolution at the moment. The authorities would always ensure that it is fair to both businesses and consumers.

But can authorities look at providing more affordable permits for a limited period – just to help people get by? Can authorities offer the same stringent compliance measures for wanna-be online traders at a lower rate?

For sellers, would you be willing to cooperate with the government and secure the right permit? Would you be willing to comply with health and sanitation standards? Would you, at least, be willing to put expiration dates and storage information in your food packages?

Would you be willing to uphold consumer protection with high regard as you do business?

Until the answer is yes to the questions above, I would advise you not to take the risk, especially in times when people are going contactless and being extra cautious about what they buy.

I wish I could encourage you to keep going because I’m an advocate of entrepreneurship myself – and I would do the same had the regulations not been in place. But I would go to what the legal counsel suggests – find partners that may help share the cost of a license with you. That could be one of the best and practical options to consider.

 

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