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Abu Dhabi, UAESunday 16 December 2018

'Can I sell homemade items from my villa in Dubai?'

The UAE resident wants clarity on whether she needs a licence to sell her paintings

Shoppers at a flea market held at Safa Park in Dubai. Pawan Singh / The National
Shoppers at a flea market held at Safa Park in Dubai. Pawan Singh / The National

Many residents offer homemade items for sale, but they do not seem to have a proper business or a shop. They advertise on Facebook and ask people to collect from their homes. Do they have some kind of exemption? When I asked about selling my paintings I was told I had to have a proper licence. Am I not allowed to sell from my villa? AW, Dubai

The law regarding selling of goods, and indeed operating any kind of business, in the UAE is clear: it is illegal to operate any business without the proper documentation and licences. Small home businesses without their own trade licence are permitted to sell via specific markets, whether in person or via a website, provided the organisation behind it is properly licenced. This allows some small businesses to sell under the licence of an online store or market, but only via those routes. While they can promote themselves online, they can only sell via online platforms or markets that have the kind of licence that includes vendors - but this is for the specific market days only. Expats are not permitted to sell from their homes, although there is a special licence available for UAE and GCC nationals to do so.

Any business, even small hobby businesses, that operate without the proper permissions, could incur fines of up to Dh50,000, or even imprisonment, for operating a business illegally including from a residential property.

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I moved to the UAE from Europe and signed a limited contract at the time. Within four months of signing, however, I realised I needed to leave due to the company being unprofessional. The employer tried to make me pay back the visa costs, medical costs, agency recruitment costs, apartment and vehicle costs, which were included in the package for coming to work in Dubai. I now know that the employer must absorb these costs, not the employee. I’m also now aware that I could have potentially had to compensate the previous employer for 45 days salary. However, it never reached that stage and my previous employer decided to cancel my visa to allow my new employer to sponsor me. Lastly, my previous employer suggested I stay in the current apartment until the tenancy contract was up for renewal and pay them the remaining balance on the tenancy agreement, but the tenancy agreement and Ejari are not in my name and nor is the apartment. Can I leave anytime (obviously paying the bills accrued before leaving), as I don’t want my previous employer in my life? Or am I legally required to pay him back for the remaining months on the tenancy agreement? Can my previous employer do anything to me if he has cancelled my visa? Am I bound to him in any way or do I have any legal obligations? ES, Abu Dhabi

ES is correct in saying the cost of employing someone must be borne by the employer. This has been made clear by the UAE Authorities and Ministerial Decrees have been issued to this effect. It is also true that if an employee breaks a limited contract, they are liable to pay a penalty to the employer. This is per Article 116 of UAE Labour Law, which states: "Should the contract be rescinded by the worker … the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract."

Under UAE Labour Law, where an employee is in accommodation provided by their employer, the standard guidance is that the employee should move out no later than 30 days after their visa is cancelled as clarified in Article 131 which states: "In the event where the employer provides the worker with accommodation, the worker shall vacate the accommodation within thirty days from the date of termination of the employment thereof." It is unusual to permit an ex-employee to stay in accommodation provided by the employer but it seems that in this case ES is paying his way. In such a situation I recommend having the terms set out in writing so there is no ambiguity over liabilities. If there is no written agreement, and the tenancy and utilities are in the employer’s name, I see no reason why ES cannot vacate the property. Once an employment visa has been cancelled with his former employer, there is no further liability or obligation to the employer, assuming all dues have been paid in full.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 25 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