If you are a business owner in the UAE, you must already know how important a Dubai business license is. Considered to be one of the most vital documents in the process of business formation, your business license is what allows you to legally operate within the UAE. Likewise, the renewal of your business license is equally important.
The timely renewal of your business license allows you to continue your operations without any obstacles such as penalties, forceful shutdowns, and more. Since the rules governing the validity of such documents are quite stern – it is best to avoid slacking in these processes.
Let us understand the specifics that go into renewing your Dubai business license.
What is a Business License in Dubai?
A business license is a document that specifies the activities a business will carry out. The license also states who the involved parties are and what the legal entity of the business is. In the UAE, there are four types of business licenses that entrepreneurs can obtain. These are:
However, regardless of what license you obtain, or the jurisdiction you operate from – by law, you must renew the license to avoid penalties after the defined expiration date.
What Documents are Required for your Dubai Business License Renewal?
You do not have to submit any documents that are difficult to obtain or are time-consuming to put together. This process is relatively quick and simple to undertake. The documents required are:
A Completed BR/1 Form
A BR/1 form is an exclusive form for all trade license renewals. When submitting this form, it is crucial to obtain signatures from all existing shareholders or partners involved. This is an important step for your form to be accepted.
Valid Tenancy Contract
Before applying for a Dubai business license renewal, you must ensure your tenancy contract has a validity of one month or more. Along with this, it is also important for your tenancy contract to be attested and registered with Ejari.
Photocopy of Current Trade License
For the renewal of your trade license, you are required to submit a copy of your existing trade license for internal purposes. Failure to submit this photocopy may result in your application being rejected.
Passport Copies of all Shareholders and Partners
Along with their signatures on the BR/1 form, passport copies of all shareholders and partners are also required for the renewal of your Dubai business license.
What is the Process of Dubai Business License Renewal?
- Your first step is to ensure your tenancy contract is valid for at least one month. In the case that it is not, you could face the rejection of your license renewal.
- Next, submit all your documents, including your filled BR/1 form, to the Department of Economic Development or the DED.
- Once the DED has received and assessed all your documents, they will issue you a payment voucher to clear the payment for the same.
- Upon making the payment, you will receive your business license.
Penalties for Failing to Renew your Business License
The government of Dubai functions in a stern manner to ensure that there is law and order maintained across the city. To create a sense of responsibility among entrepreneurs owning businesses in Dubai, the government has imposed various penalties.
As per the Department of Economic Development’s laws, businesses operating without a business license will receive a fine of AED 5000.
Additionally, those who fail to renew their business license on time will face an AED 250 fine per month, for as long as they operate without renewing their license. The fine period will start 30-days after your license expires. The 30-day period is given to you as a grace period, during which you may either renew your cancel your license to avoid the fine.
Furthermore, if you operate from an additional office space under an existing business license without prior approval, you could face a fine of AED 2000.
Restrictions on Expanding your Business Presence
Whether on purpose or by accident, failure to renew your business license leaves a bad taste and affects your record. Businesses whose licenses expire may face rejection in their business expansion requests in the future.
The Business may be Blacklisted
If your business is operating with an expired business license, you risk the chance of your business being blacklisted. This is, by far, the most serious penalty imposed on businesses. As a result, the DED will prohibit your company from running. Along with this, the government will cancel all visas associated with your business. Consequently, shareholders and partners may have to leave the company.
Not renewing a business license does worse for the business than one can imagine. The easiest solution is to hire reliable business consultants who can manage these tasks on your behalf. Count on Business Link to take the stress of such issues off your shoulders.
Get in touch with one of our star consultants to find out more.