A trade license is one of the most important requirements for doing business in Dubai. Getting a business license renewed involves a lot of documents processed. Also, renewing a business trade license could be a long process if you are not familiar with it. Delay in filing a trade license renewal levies penalty, or worse, a ban to the business license, freezing all the business activities. There are three kinds of licenses issued by the Department of Economic Development Dubai.
- The commercial license
- The industrial license
- Professional license
Below are the steps to renew a trade license in Dubai:
Step 1 – Have a valid tenancy contract
The first thing one needs to ensure is that the firm’s tenancy contract should have a validity of at least 1 month and it should be attested by ejari. If the tenancy contract does not have a validity of at least a month, the associated license cannot be applied for renewal.
Step 2 – Apply for license renewal
Doing business in Dubai needs approval from concerned authorities in order to renewed their business license. Apply for license renewal at the DED, along with all the required documents. Here is a list of all the documents required for the purpose of trade license renewal:
- A typed BR/1 form
- Ejari Registration Certificate and a photocopy of Tenancy Contract
- Photocopy of the current business trade license
- Passport photocopies of all the business partners
Step 3 – Make the payment
After submitting the application, the DED shall allot a payment voucher. Once you receive the voucher, proceed to the payment procedure. Immediately after making the payment you will receive your renewed license from the channel.
Penalties imposed if you fail to renew the Trade License
- Monetary Penalties
When a licensed business expires the Department of Economic Development in Dubai can impose a business with several forfeits. A business practicing without a license could be penalized with AED 5000, while failure to renew a license within the specified time-limit could cost AED 250/month, also an additional office for an existing license without permission fines the entity with AED 2000.
An expired business license can lead your company to being fined. Any delay in payment can also result in penalties to the concerned business. Companies can be imposed a monthly fine as mentioned earlier. The fines start accumulating right after the expiry date. Continuation of business without renewing the trade license can lead to the company being blacklisted by the respective authority. In such a case, the company must seize all transactions and the visas and sponsors listed under the company name can be made null & void. The expansion of the business can also be restricted if the license renewal is not done within the stipulated time frame.
- Black Listing of Company
When the business continues its business activities without renewing their trade licenses it is possible that the company could be blacklisted and would stop all the activities the company is dealing with. They can nullify the visas and sponsors under the company.
- Restriction on the Expansion of Business
The companies with expired licenses are not allowed to expand under these circumstances. It is essential for companies to have a clean record if there are plans for expansion.
There is a lot to think about when you start a business. You have to focus on finding clients and customers and making sure you provide them with what they need, but you also have a lot of administrative work to do in the background. Even if you are organized at the very beginning, chances are there will be things that get missed in a year or two as the work builds up.
- An expired business license could ruin the company
Make sure you know the expiry date and work in the time to get it renewed, if possible, before the deadline. Authorize someone in the company you trust to get it done or work with an external partner who can take the responsibility off your shoulders. Either way, keep your license valid or your business will inevitably suffer and you could be at risk of losing everything.
Business consultancy agencies are abundant in Dubai. Such agencies offer A-Z company formation solutions which include everything from trade license registration and on-time annual renewals with timely reminders, so you, the business owner, can focus on your business. You may have to address your questions to professionals on processing the requirements for running a business.
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Dubai has made efforts to ease obtaining and renewing a trade license, but sometimes handling these procedures of acquiring and renewing a trade license in a timely fashion in Dubai can prove cumbersome for entrepreneurs. If you have any doubts about how to get or renew a trading license or for any Pro services in Dubai, get in touch with us.