Starting a business in Dubai requires a business license. Without holding or renewing the license, you cannot conduct your business operations in Dubai, UAE. The rules and regulations on business licensing are extremely strict in the Emirates. If you are a business owner or an entrepreneur running your company in Dubai and your business license is expired, you should renew it ASAP. If you fail to do so, you may face different penalties on an expired business license in Dubai. This piece of writing explains what punishments government imposes on people running businesses with an expired business license.
3 Major Penalties on Expired Business License in Dubai, UAE
1- Restriction on Expanding Business
Small and medium-sized enterprises, or SMEs, are extremely vulnerable to penalties for the failure of license renewal. It is more challenging to maintain a small business on short notice because an annual license renewal is required.
A small company may not be permitted to grow its operations in the future if it does not renew its business license within the given deadline. This could lead to insolvency and force the company into involuntary or voluntary liquidation. Any SME looking to develop and thrive in Dubai must continue to adhere strictly to DED’s (Department of Economic Development) license renewal rules and regulations.
2- Fines on Companies
According to DED laws, a company that conducts its business without a valid business license will face a fine of AED 5000 and an additional AED 250 if the license is not renewed before it is expired. In the same way, an investor may be subject to an AED 2000 fine for the establishment of a rogue office that overlaps an active business license.
The Department of Economic Development (DED) is the legislative body in charge of regulating the registration of companies and licensing of businesses in mainland Dubai. It also keeps an eye on the existing legality of the registrants.
DED provides a number of channels to enable a business to renew its trade license in no time. For this purpose, a business can get in touch with professional consultants or PRO services provider in Dubai, UAE that is not under contract with any business entity.
You will have to answer questions about your situation in addition to parting with your hard-earned money. Why would you allow your company to get to the point of being fined due to an expired business license?
This is particularly a serious problem if you report to investors and shareholders, as letting your license expire and risking financial penalties will almost certainly make you look like an irresponsible, immature, and unprofessional person. In addition to putting the business at risk, you will put yourself at risk as well.
3- Company May Get Blacklisted
The last and the most severe penalty that can be given for failure to renew a business permit in Dubai is moving a company into the blacklist. In other cases, a business that doesn’t stop violating the law by operating without a business license and refuses to follow laws set by DED’s licensing authority will be found guilty and placed on a blacklist.
By being added to the Blacklist, a business’s visas will be revoked, the capacity to make transactions will be prohibited, and sponsors will be cut off. It will also increase the chances of the owner, shareholders, directors, restrictions on travel, and management being deported from the Emirates.
The positive thing is that there can be a certain time or you can say grace period that will allow you to organize your affairs in the right way, renew your business license and complete the business registration process. However, you will have a very tough time moving forward if you continue to ignore the demands of the government. Your company and you yourself will ultimately end up on the blacklist. Therefore, the ideal move is to fully fulfill your valid responsibilities in Dubai, and the rest of the Emirates. You should also make sure to remember to renew your company license in Dubai, United Arab Emirates.
2018’s Relaxation on Dubai’s Company Renewal Terms
In order to keep Dubai’s reputation as a business-friendly city, the UAE government implemented a number of measures in Q2 of 2018 that offered benefits for companies in need of legal and financial support, guidance, and assistance. One of its rulings focused on easing the burden on entrepreneurs and business owners by exempting their startups and companies from all types of fines.
This development regarding expired business licenses in Dubai would be a huge relief, especially for Small and Medium Enterprises. It is so because it will make it easier to renew business licenses by the end of 2018 in Dubai. The Director-General of the Department of Economic Development (DED) in Dubai, UAE advised business owners and fresh entrepreneurs with financial backlogs to take advantage of this opportunity and file for business license renewal to resume their business activities as the business community applauded this decision.
How to Avoid Penalties Regarding Your Business License
Every year, you must have your official documents ready. In order to renew your business license, instantly submit all the paperwork and fees needed to complete the process.
The necessary paperwork is as follows:
- Passport photocopies for each business partner or investor
- Typed Form BR/1 (Registration and Licensing Application Form)
- A copy of your most recent trade license
- A copy of the tenancy certificate and the Ejari Registration Certificate
In order to avoid any delays and penalties regarding your business license, it is better to hire a specialized agency that would do the process for you and save you the hassle. Riz & Mona Consultancy offers renewal services to all types of documents whether it’s trade licenses or visas etc.
Contact us and let us get all your documents done.
Conclusion
We are aware of the challenges involved in starting and successfully expanding a business in Dubai, UAE. It requires a great amount of money, effort, and many hours of your precious time. Why then put your new or well-established company in danger by expiring your business license?
Ensure that you are aware of the expiry date of your business license and give yourself enough time to renew it before the deadline. Collaborate with a third party who can assume the burden off your shoulders or Choose a member of your company who you can trust to fulfill this job. In either case, maintain the validity of your business license. Otherwise, your company will ultimately suffer to a huge extent and there is a high possibility that your business may move toward being bankrupt.
It has never been simpler to launch your own company in Dubai, UAE. Riz and Mona handle everything including the business setup process so you can concentrate on what matters the most, which is expanding your company operations in all of the UAE. For further details and information about how we can help you in setting up your company in Dubai, UAE right away, please send an email to us at info@rizmona.com or Whatsapp us at +971 54 582 1012 at any time.
