Are you planning to set up a business in Dubai? Or have you just set up a company in Dubai? Are you in the up with the administrative work to obtain a company license in Dubai? In any case, you would never want to fail business sustenance on the grounds of penalties you never knew about.
It is like two sides of the same coin — the ease of getting a Dubai trade license and enormous penalties if you fail to sustain it.
To save your pockets from such unwelcome expenses, Business Link lists the penalties
The penalty of Wrong Dubai Trade License
Getting the right business license is the initial step for setting up a company in Dubai. It requires you to present an appropriate business structure, else, you will end up obtaining the wrong business license. Now, to obtain a valid license, choosing the appropriate company structure is a must.
Penalty for expired Company License in Dubai
Varying as per investors’ requirements, different business licenses are allocated in Dubai. These licenses pertain to specific business activities. Now, an expired business license can attract penalties for your business. Thus, renewing your business license would save you largely from types of penalties:
- Monetary Fines: The Department of Economic Development, Dubai functions as the monitoring authority for licenses issued to companies. Catching up with the fast pace of digitization, the authority offers hi-tech services to renew business licenses online. As a result, the process has become hassle-free and saves a ton of time.
- Blocklisting of Businesses: On several occasions, companies continue to operate without renewing licenses. This can increase the chances of the company getting blacklisting in Dubai. Such an action can have drastic effects on the company’s transactional capabilities. Other impacts may include the Visa getting revoked or in some cases deportation of the executives in the company. Even sponsors may choose to disassociate themselves leaving the company in muddy waters.
- Curb on business expansion: Putting it simply, if the company fails to renew its business license, it can be a major hindrance for business operations and expansion. In such circumstances, a penalty can mean a big blow to the company’s reputation and even its growth in the long term. Sometimes, it can even translate to insolvency making matters worse for investors and employees.
Penalty for faulty agreements or contracts with loopholes:
Trust and mutual agreements on Terms and Conditions lay the foundation of businesses. At times, these commitments may communicate verbally. Thus, the absence of a written contract without clearly specifying the agreed-upon terms can attract a penalty in Dubai. These contracts can be especially useful during arbitration processes while resolving disputes. There, only a written and sign contract consider valid and also enforceable between two contending parties.
Penalty for failing to register Intellectual property
As the culture of innovations and technology is sweeping the globe, Intellectual property is a valued intangible asset. If a company in Dubai, is found guilty of intellectual property theft, very strict actions are taken. This includes heavy fine imposition, seizure of the stolen property, and in grave cases, even imprisonment. So, companies ought to be very careful while handling intellectual property and ensure that require permissions are taken.
Penalty for violation of fiscal records and VAT registration:
Companies should certainly ensure that they are VAT complaints in Dubai. In addition to that, the financial records should also be kept in compliance with the UAE tax laws. Failing to do so, can make a cause for attracting huge and harsh penalties.
Penalty for carrying out business activity at an unregistered location:
When it comes to setting up a business in Dubai, location is a vital factor that has to be taken care of. The Department of Economic Development in Dubai restricts business activities at some unregistered locations. Such a mistake can cost you a penalty of AED 1000. Hence, before setting up business in Dubai, ensure that the location is registered.
Penalty for making amends in business activity without authoritative permission:
An estimated 2,000 activities allow in Dubai by the Department of Economic Development (DED). However, adding or even changing the business activities are not permits, without prior permission, under UAE laws. If any company wants to change or apply for any activity, it can do so by using an amendment under DED. Whereas, failure to do so can attract huge monetary penalties.
Penalty for not complying with a work-hour permit:
There are specific hours per week for which the companies can work in Dubai. For instance, Private companies can operate for 8 hours per day or 48 hours a week. Companies can run for additional hours too, but they need to take permission from DED. Whereas working for additional hours without permission can cause the authority to impose fines.
Penalty for failing to assess risky scenarios:
Inherent risk can be a characteristic of some types of business. These can include dealing with toxic chemicals, harmful gases, dangerous equipment, etc. A company dealing with these should assess the worst-case scenarios and identify the risks associated. Many times unfortunate incidents happen and the people working in such places can bear the brunt too harshly. Thus, insurance of the workers following the risk is important.
Penalty for operating a business in Dubai while being employed somewhere else:
As per the UAE employment agreements and tax laws, consider is illegal for a legal employe citizen to start a business in Dubai. This action would require exclusive written permission from the employer.
Penalty for operating a business in DED closed establishments:
Sometimes businesses can carry out economic activities in DED closed establishments. This will require the establishments to shell out a certain penalty to DED.
We understand the hardships of setting up a business and making it grow at a substantial rate. It requires an enormous amount of hard work, financial investments, and long hours of work to make it through. The process of registering property or business in Dubai seems an easy job on paper. However, many regulations and compliances can hinder the process. Sometimes organizations aren’t even aware of actions that can attract penalties. To solve this, you would require the services of one of the best business setup consultants in Dubai– Business Link UAE.
At Business Link UAE, we ensure that the hard work and investment you put in don’t go to waste. This could be by letting your business license expire or the various minefields of regulations. With our extensive Business Setup Services, we’ll make sure the process is smooth and efficient for you. We offer services related to Renewal Company License in Dubai, VAT registrations in Dubai. Avail our consulting services for company formation, registration, and most importantly, averting penalties in Dubai.
✉ firstname.lastname@example.org | www.businesslinkuae.com | +971-556070118 | ☎+971-43215227