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Facebook traders 'breaking UAE law'

DUBAI // Housewives are risking fines and even jail by selling clothes, beauty products, home accessories and other items on social media without securing approval or a licence from authorities.

The women, from India and Pakistan, are using sites such as Facebook and Instagram to sell their wares, which they either make themselves or bring from their home countries.

This form of cottage industry is common on the subcontinent but is in breach of UAE trading rules.

“If you are doing any kind of activity that involves money and financial transactions and commitments, then you are bound to register yourself with the relevant authorities,” said Yamini Rajesh, a lawyer. “Any offence would be liable to legal procedure under local laws. Social media can be a source of reaching customers, but it cannot be your shop to do trading without legal permission.”

A simple search on social media raised dozens of pages advertising all kinds of goods, Ms Rajesh said, adding that the women entrepreneurs were unaware of the serious consequences.

The Department of Economic Development issues a basic e-commerce licence for Dh22,000 a year – which is beyond the means of these entrepreneurs. SP said she used social media as a quick and cheap way to sell traditional dresses and accessories to help pay for her family’s expenses.

“Through social media, one can start the initiative with the least investment and you can get thousands of potential clients,” said the Indian housewife, 32.

S P launched her business with Dh5,000, with which she used to buy cushion covers and dresses during her annual trip back home. She then sold them for a profit, with cash changing hands on delivery.

S P joined the Facebook page UAE Ladies Market to reach more customers. She is one of its 18,716 members, almost all living in Dubai and offering a range of goods for sale.

Facebook allows users to sell items using its Store and Marketplace app as well as advertising goods on community pages. Spamming of other users is not permitted.

Ahmad Khan, general manager of How2UAE, a company in Dubai that helps entrepreneurs to set up businesses, said it was illegal to trade in the UAE without the proper documents.

“Even those who don’t want to invest much in permit issuance at least should have a business-specific licence from a free zone,” he said.

“This licence, however, does not allow any direct trading or selling. The product needs to be given to an onshore distributor or logistics services providers for the sale.”

Despite their business being small in scale, online traders run the risk of incurring fines and having their stock confiscated. Serious offenders could even face jail time.

“In most cases we found expat housewives willing to carry out such small business with the intention to earn extra money for the household,” said Mr Khan. “These businesswomen are perhaps not aware of the serious repercussions of breaching regulations in the UAE. This is usually taken for granted because it is acceptable in their home countries to conduct cottage-industry business without permits. Also, cost is a major factor that discourages them from getting a permit for a small setup”.

S P said she planned to apply for a trade licence after saving enough money through online sales. “I have done well with my social media business and found my clientele and saved enough money to apply for the trade licence,” she said.

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The National