Trade License Renewal is Necessary for a Smooth Business Operations
Posted: Apr 03, 2021
Setting up a business in any part of the world needs some basic legal procedures for smooth operations. Every country has a set of rules and regulations for investors and entrepreneurs. UAE too has its own. Investors in Dubai also required to follow every rule that the government has set for investors and issuance and renewal of trade license on time is one of them.
Trade license renewal is a procedure that is a must for all business entities in Dubai. Therefore, ensure when you plan to continue your business in Dubai then you have renewed your existing license before the date of expiry. We will first try to understand the basic things about the renewal of the trade license. Renewal of trade license is an essential formality similar to obtaining a new trade license. It is compulsory for the holder of the license to renew it before it expires. And if one fails to renew it on time, then it may attract financial penalties or even impact the operations of an entity negatively.
How to Renew the Trade License in Dubai UAE?
People who are new in business or investors who are new in Dubai are not aware of the rules related to trade licenses. Through this article, we will try to shed light upon the formalities of trade license renewal. Here, you will find instructions to follow, and if you find it confusing, then you have the option to hire a business setup consultant for guidance and assistance. Professional business advisors and business setup agencies are aware of all the rules and regulation of company formation in Dubai and other related services that also include acquiring and renewal of trade licenses that are helpful for investors and businesses in matters of business setup in Dubai and other emirates of UAE. If you find yourself in mess, it is always better you hire an expert while both acquiring and renewal of trade licenses.
Trade Licenses Types Issued in Dubai
Obtaining a valid trade license is one of the most necessary requirements to do business in Dubai and other emirates of UAE. It enables a business owner to legally run business activities in UAE specified in their license. Engaging in any type of business activity without a valid license is seen as illegal and may invite penalties.
Listed below are the three main types of trade licenses issued in Dubai:-
- Commercial License (issued for trading)
- Professional License (issued to professionals who are skilled in various areas of services)
- Industrial License (issued for industrial activities, manufacture or production)
The Department of Economic Development (DED) is a government body in UAE that is responsible for the issuance of trade licenses in Dubai.
Steps to Follow for Trade License Renewal in Dubai?
Check Validity of the Tenancy Agreement
Minimum validity of 3 months of your tenancy agreement is necessary to apply for license renewal. If the tenancy agreement has exceeded this minimum validity period, you will not be allowed to apply for license renewal. Attestation by EJARI is also necessary for the tenancy agreement. Therefore, it is suggested not to delay the renewal process till the last day approaches.
Acquire the Approval
You are expected to obtain all necessary consent from all the government and other concerned bodies, before filing the license renewal application. For example, a medical company will require approval from the authorities in the medicine department and various other government bodies.
Necessary Documents for the Renewal of Business License in Dubai
The list of documents required for license renewal:-
- Certificate of Ejari Registration
- Tenancy agreement
- BR/1 form (typed)
- Business partner’s passport. (copy)
- Existing trade license (copy)
- Apply for license renewal
- Apply for license renewal at the Department of Economic Development in Dubai.
- Hand over the Tenancy an agreement, Ejari attestation, business partner’s passport, duly filled application form and all other supporting documents to DED.
Take the Payment Voucher
Once your license renewal application and all other documents that you have submitted are verified, the Department of Economic Development (DED) issues a payment voucher. Take that voucher.
Payment for License Renewal
You can connect the payment with the trade license renewal using the payment voucher. Once your payment is confirmed, the DED issues the renewed license. You can either visit the registered service centres or choose a mobile application for this process.
What If You Fail to Renew Your Trade License On Time?
At the beginning of this article, it is mentioned, failure to renew your trade license within the stipulated time can invite penalties and even complete shutdown of your business operations. Many other complications can also affect the reputation of your business establishment. Major penalties are listed below:-
- The Department of Economic Development (DED), Dubai and in the other Emirates of UAE has the jurisdiction to impose fines on the business entities that run without a valid trade license.
- Failure to renew the business license and if a company continues to operate with the expired license can put the company under the "blacklisted" category. It can result in a complete shutdown of business operations.
- Business establishments that function without renewing the trade license also lead to obstructions in the future expansion of business plans.
What are the Different Modes of Renewing a Trade License?
A company in Dubai or any other emirate of UAE can renew the trade license in 3 different modes.
- Offline process
- Online platform.
- The automatic renewal procedure
The documentation of license renewal and the whole process of applying could be challenging for a first-timer or somebody who is new in the business. The procedure is not only strictly time-bound but as necessary formalities, which needs to be taken care of well. Therefore, it is always advisable you hire a professional business setup agent to assist you in the entire process. It will make everything easier and hassle-free for you.
OBK Business Centre representatives are highly skilled in assisting you with the process of setting up your business in Dubai and trade license, providing an office for rent, virtual offices and serviced offices.