I have been approached by a company, new to the UAE, to sell its health products directly to consumers. I don't have a trade licence but they tell me I don't need one as I just sell directly to the public and take a cut as my income would be on a commission only basis. Is this legal? I have read that to operate a business you need a licence. My husband works for a government entity, so I do not want to break the law for a bit of extra money. How do I go about this? EG, Dubai
In the majority of cases operating in this way would be illegal and subject to heavy penalties. The exception, however, is if a company is registered with the UAE’s Direct Selling Association. This permits salespeople to work for it on a commission-only basis without having to have a personal trade licence as sellers operate under their master licence. There are, however, only eight companies registered with the DSA-UAE, which is a member of the World Federation of Direct Selling Associations. Any company has to be vetted before approval is granted and then both the company and their sales force must adhere to a code of practice.
Any business taking on direct sellers in the way the company mentioned appears to be doing, without DSA approval, is breaking the law, as are their representatives. The company in question is not listed on the DSA site and does not currently have approval to trade in this way, so EG is right to be cautious and would be advised to avoid the company until it is approved, or unless she wishes to arrange a suitable trade licence. Further information can be found on the Direct Selling Association website, dsauae.ae
Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only.
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