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2021/02/21

Rules and Regulations that Influencers in UAE should know

Tanvi Fal Dessai

There is a lot of buzz about influencers in the UAE right now, representing the global trend. Many regional and foreign influencers easily accomplish a significant involvement and follow-up within the UAE. The UAE public is constantly plugging into social media to keep on top of what’s new, whether health, fashion, lifestyle, beauty, or other consumer products.

Social media influencers are changing the branding, advertisement, and content development industry in the UAE and worldwide. With the announcement late last year that Dubai will open a new club for social media influencers and some local influencers now officially earning up to USD 5,000 per post, businesses have noticed the incredible ability to create brand recognition and visibility influencers. They are gradually moving to incorporate influencers in their marketing budgets.

There is no overarching global solution in terms of the unique legal complexities of becoming an influencer or a supporter in this sense since the influencer phenomenon has occurred too rapidly. However, failure to meet the related legal concerns may have adverse effects, both in terms of market management and development, for both influencers and sponsors pursuing their services.

Set-up

Influencers are actually running a business, whether they know it or not. That means they will need a business license/permit, according to the laws of the UAE. In general terms, without an appropriate commercial license, a provider can not be invoiced for any services in the UAE. For instance, if influencer costs” per Instagram post,” they will have to enter into a contract and then invoice for their services. This should be achieved, as opposed to in a personal capacity, by a UAE-approved company. This should be done through a UAE licensed company, as opposed to in an individual capacity. While this can appear troublesome for the influencer, it should be remembered that this still lets influencers control their legal liabilities and, if necessary, if they are not paid, take civil action against a sponsor.

Although this may not have been strictly applied until now, it is possible that as influencers’ usage increases and becomes more common, having the required organizational structure in place would become more necessary for an influencer. Furthermore, any sponsor who secures an influencer’s services must be confident that they will enter into an enforceable contractual arrangement with the influencer.

3 Types an Influencer can get Licensing Options for Social Media 

1. Apply for an individual license as well as a business license for commercial sales activities in the UAE

2. Request a license for a collaboration (a small group of influencers-friends or family). Get on behalf of the organization an NMC special e-media license and a trade license

3. Signup with an NMC-certified official influencer agency. (Can only work with the signed up agency)

Influencers that fail to comply with the new law can risk having their account shut down and levied a fine of Dh 5000.

In-Depth

Instead of a more traditional form of paid advertising, one of the key differences with a sponsor using an influencer to promote a product is that the audience does not necessarily know if an influencer is expressing a genuine opinion or if it is a sponsored post. On a global scale, this point has been the subject of much discussion. Laws and regulations have been initiated by different countries to control this matter. Although the UAE does not actually have explicit regulations in force on this issue, we acknowledge that Resolution 35 of 2012 of the Federal National Media Council, the National Media Council (” NMC “) Resolution on Advertisement Requirements, does contain the following:

”The advertising identity shall be clearly determined, and it shall appear as unique and separate from other editorial or media material, and there shall be limits separating the advertisement from any other material in addition to time lapses in case of radio or television broadcasting.”

In its requirement that editorial content is differentiated from commercial content, this statute is not vague. However, it is not clear if the NMC will deem a violation of this rule to incorporate, for example, one undisclosed commercial into the editorial content feed. Despite not being labeled as an advertisement, it can also be deemed to be ” unique and separate. ” However, it is possible that the advertiser would not be ” clearly determined ” even though it is perceived to be unique and distinct.

We have not yet seen the NMC extend this law to an influencer. Since we agree that if they want to do so, there is space within this law for it to be enforced, we highly advise that both the sponsor and the influencer discuss this factor before entering into their contract.

Also, without this legislation being debated, there has been a lot of discussion about increasing the transparency of influencers’ role as paying officials and whether express notification should be necessary. For now, it would be incredibly prudent to ensure that whatever the parties agree on this issue, i.e. if the influencer needs to use ” #sponsored “‘,”#ad,” or a related hashtag on their tweets, it should be explicitly included in the sponsor-influencer arrangement.

In any deal, maintaining their brand is still a crucial concern for influencers, since it can be possible to lose the public’s confidence or trust. In the complexities of the brand/influencer relationship, however, the influencer would undoubtedly find that giving up too much power over the production of content to a sponsor will result in a lack of credibility since it is typically the artistic edge of the person that makes people famous, and thus an influencer, in the first place. Please email us if you need help with your corporate set-up, negotiating, or entering into a deal with an influencer, investor, or agency, or want to know how to secure your name.

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