Trade licenses fall among the basic requirements for doing business in the UAE. At the same time, business owners also need to ensure that their company remains legally compliant and stays clear of legal or financial risks. Hence, to secure this success, business owners must renew their trade licenses timely in accordance with the UAE decree. Company License Renewals in Dubai are typically done every year with the respective authorities who manage and oversee the licensing activities in the particular jurisdiction.
The license renewal could be a long process involving a lot of paperwork. At UAE Expansion, customers can get their license renewed on time, without fail. Their experts thoroughly avoid any delay in the process and send out gentle reminders to avoid last-minute panics and penalties.
Types of Company Licenses in Dubai
There are three main and commonly used licenses in Dubai.
- Professional license – Granted to individuals or organizations with specialized skills, knowledge, or experience in a particular field such as medicine, law, accountancy, etc.
- Commercial license – Businesses involved in the trade of goods and services, including import and export activities, can acquire a commercial license.
- Industrial license – Ideal for organizations engaged in manufacturing, production, packaging, and other industrial activities.
Importance of Company License Renewals in Dubai
There are several reasons why license renewal should be given greater significance:
- Ensure legal compliance – Renewing a trade license would ensure that the business remains compliant with local laws and regulations. Any violation may lead to legal consequences or financial penalties as per Dubai’s commercial law.
- Maintaining business credibility – A valid business license reflects the company’s reputation in a positive way and helps maintain customer’s faith in its services. While, with a lapsed license, customers can have doubts about the legitimacy of the company.
- Keeping banking smooth – Businesses that want to set up a corporate account in Dubai have to submit proof of their updated licenses to avail smooth banking services and facilities.
- Fulfilling visa requirements – To apply for employee visas or keep the existing visas current, you have to maintain a valid license.
- Keeping up with regulatory changes – In order to meet new requirements and maintain business operations smoothly, companies must be abreast of the latest local regulations.
- Avoiding hidden cancellation charges – If trade licenses are not renewed timely, the DED may cancel the business without giving any prior notice. This, again, can lead to expensive cancellation fees that you will have to pay before applying for a new trade license.
Requirements for Company License Renewals in Dubai
There are a few eligibility requirements you have to comply with before submitting your renewal application to the DED –
- Your company must be established and registered in Dubai.
- There must not be any outstanding fines or dues payable to the government from your business.
- All taxes must be paid up to the date.
Once you have confirmed your business is eligible for license renewal, go through the required document checklist and gather them accordingly. The list includes the following papers –
A valid tenancy contract
If your business requires physical space, then you must prepare a valid tenancy contract that is in the company’s name and has been registered with the Real Estate Regulatory Authority (RERA) of Dubai.
The Ejari system was introduced in the UAE to regulate the real estate market. Under this system, businesses are required to register their tenancy contracts with the Dubai Land Department (DLD) before using them for official purposes.
A BR/1 form
A standard application template needs to be filled out by the companies while applying for trade license renewal.
Documents of all partners and shareholders
The documents that need to be submitted for each partner and shareholder include a copy of the passport, a valid UAE residence visa, and an Emirates ID.
Existing trade license copy
Submitting a copy of the existing trade license to the DED will verify that the business is eligible for renewal.
NOC from external authorities
The renewal requirements also include approvals and permissions from certain government bodies, such as the Ministry of Health and Prevention, Knowledge, Human Resources, and Development Authority(KHDA), Dubai Municipality, etc.
Proof of payment
This will evident the payment for the renewal fee.
Step-by-step process for Company License Renewals in Dubai
Renewing the trade license in Dubai is actually a straightforward process, however, seeking expert help can with a smooth process. The overall procedure comprises the following steps:-
- Validate the tenancy contract – Before getting into the core process, make sure your tenancy contract is valid and up-to-date. Also, confirm whether it has been registered in Dubai.
- Gathering required documents – The application process is quick as well as easy if all the necessary documents are well-arranged beforehand. Also, check the validity and availability of the documents before filling out the application form. In addition, if the process requires permission from the relevant authorities, make sure to provide all the necessary paperwork.
- Submitting application – The license renewal process can be done online or offline, depending on the applicant’s preference. You can carry out this process through any of the available means such as DED Service Centres located across the Emirate, DED SMS Channels, and DED online service portal.
- Pay the trade license renewal fee – Once you have submitted your application and documents, the authorities will review it for further procedures. Later, they will issue an electronic payment voucher for the applicable renewal fees. The amount of the fee will depend on the type of business you are operating. Usually, the LLC license renewal cost in Dubai is usually the same as the issuance fees.
Penalties for Violation
The following penalties could be imposed if you fail to renew the license:-
- Monetary penalties – If any business fails to renew its license on time, then the DED has the right to impose it with several forfeits. For example, if a business is operating with an expired license, the DED can penalize them with a fine of AED 5000. For any further delay in renewal, they can impose a monthly fine of AED 250.
- Black listing – If a business continues its operations without renewing its business license, it can lead to being blacklisted and it would be prohibited from functioning in the UAE. The consequences may further involve the cancellation of employee visas and sponsorships, the termination of transactions, and the nullification of residence visas.
- Restriction on business expansion – With expired licenses, businesses are restricted from expansion. To avoid such circumstances, companies must ensure to have a clean record.
- Closure of Company – The DED even has the right to shut down a business if it is found operating with an expired license. In many cases, the banished companies are not permitted to establish their operations again in the country.
UAE Expansion is here to help!
There is a lot to consider when it comes to operating a business in the UAE. The better way is to authorize someone who can take the responsibility off your shoulders so that you can focus completely on your core business activities and organizational goals.
UAE Expansion is one of the leading business consultancy firms in the UAE that offers A-Z company formation solutions to entities across various industries. From license registration to Company License Renewals in Dubai, UAE Expansion will address every concern of your enterprise and timely process each requirement that is mandatory for the smooth functioning of your business.
To learn more about business licenses and their renewal procedures in Dubai, get in touch with the business experts.