How to Renew a Business License in Dubai

Renewing your business license is one of the most necessary and unavoidable tasks any company working in Dubai must take into account. Your level of business, be it a startup or a large corporation doesn’t change what is mandatory, which is compliance with the local regulations. There is just no way around it and you need to take care of it so that your business can go on operating trouble free, not to mention those huge and unnecessary fines. Of course, no one can deny Dubai’s friendly attitude towards business and very tempting financial motives, but keeping your license up to date is vital to your long-term success.

And although the whole process of renewing your business license might look complicated at first, it is in fact very simple if you know exactly what to do and are prepared for it. We will now guide you through every step for renewing your business license in Dubai and point out the most common mistakes you need to avoid. We also have some insider tips to make this process as easy and smooth as possible for you.

What is a Dubai License?

The license or commercial permit to operate any form of business in Dubai is an essential instrument. In brief, this is a legal permission by the Government of Dubai that grants validity to your business activities. This license, a business license in Dubai, must be renewed on yearly basis, as it’s only valid for a year.

Note that Dubai enforces the rule of law applicable to all and the penalty that will be issued for failing to renew a business license can be heavy(more on that later). But before discussing how exactly you can renew a business license in Dubai, let’s explore what and how many types of business licenses there are first.

Types of Business Licenses in Dubai

As it is our purpose to discuss applying or renewing a business license in Dubai, you should know that there are four types of business licenses in Dubai. Investor need to obtain a license for the exact type of business they wants to operate in Dubai. For instance, a restaurant needs a restaurant license, while trading requires a trade license.

If you are into manufacturing goods, you need a license for manufacturing. Also, if your business involves several products, you will have to obtain a general trading license in Dubai. The following sections outline the features of each type for starting a business:

Professional License

This is one of the most popular options for those who work in a field that requires particular expertise, such as accounting, healthcare, or technology. This license, offered by the UAE authorities, allows you to conduct your business and provide services in the region. Basic requirements for professional license business registration include; local Emirati sponsor, higher education qualification, and a minimum of one investor. The cost of getting a professional license in Dubai ranges from AED 15,310 to AED 28,500, including various fees such as professional license fees, trade name fees and service agent fees.

Examples of industries that are under the category of a professional license in Dubai include the following:

• Design and Architecture Consulting
• Legal and Advocacy Services
• Medical Services
• Financial and Accounting Consulting
• Educational Services
• Handicrafts
• Publishing and Printing Services
• Management Consulting
• Information Technology Services
• Beauty Salons
• Internet Services
• Business Consulting

Industrial License

Another major category of license includes an industrial license. Companies dealing in the production of goods, such as oil and gas, food items, industrial materials, pharmaceuticals, wood, and other factory-made products derived from wood require this license.

This license caters to manufacturing, producing, and processing activities. Unlike the other license types, you cannot open a virtual company with an Industrial License in Dubai; you are required to have a physical office or factory present in town. The overall cost is around AED 25,000, for an industrial license in Dubai

Commercial License

This license is required for businesses that import and export goods such as gold and precious metals, clothes, automotive equipment, chemicals, and other commodities. A commercial license also permits you to purchase and sell property in the UAE. A commercial license is also required for the registration of a virtual business in Dubai.

Ownership, in this structure, is usually distributed in a way that 51% belongs to a local Emirati sponsor and 49% belongs to you. Still, 100% ownership is also available in some cases, with no local sponsor required. The commercial license costs AED 15,000 to AED 28,500 but you also need to add the costs of extra registrations, visas, premises, and other expenses, adding up to AED 30,000 or more.

Tourism License

Since Dubai is among the most visited cities in the world, having millions of tourists every year, this license is provided for those businesses involved in the operation of boat rentals, hotels, tour camps, guesthouses, travel agencies, restaurants, and more. You can get this one by the approval of Department of Economy and Tourism (DET) thorough submitting the necessary documents and business plans. The average cost of getting your tourism license in Dubai starts from AED 14,999, but it can go higher depending on factors like your license type, company structure, office space and more.

Eligibility for Business License Renewal in Dubai

Before renewing a business license in Dubai, your company should meet some key eligibility criteria. The business should be with a valid EJARI-approved lease agreement, have no fines, and be compliant with tax and regulatory requirements. It is also important to ensure that your lease agreement has at least one month of validity remaining.

Shareholders’ information should be updated, and any change in the structure of the company should be registered. In the case of free zone companies, you may require certain specific approvals from relevant authorities. The fulfillment of all these conditions is quite necessary to avoid delays or rejections during the renewal process. Being proactive regarding eligibility can ensure the process is smooth and continuous, with no glitches in business operations for compliance issues or penalties.

Steps to Register a Business License in Dubai

You need to eenew your business license in Dubai every year. Your application will be processed by the Government of Dubai through DED or the concerned free zone authority. A licensed entity proves that your business holds legal permission to operate and, at the same time, verifies that it meets the required standards of regulation. The following are the steps usually involved in renewing a license:

Verification of Documents

You’ll need to submit all the required documents and identification details to the DED. The paperwork of course depends on your business type and activities. As we mentioned, prepare everything to avoid delays. The DED will process your application and send a reply within a few days. Here are the documents you need to sent to the DED:

• A completed application form for business license renewal
• A valid tenancy contract or Ejari certificate
• A copy of the current business license
• A copy of the business owner’s passport and residence visa
• A copy of the Emirates ID of the business owner
• A valid copy of the company’s Memorandum of Association (MOA)
• A copy of the company’s Commercial Register (CR)

Payment of Fees

Once the DED has approved your renewal application, it will be sent to a payment voucher. Then it’s time to pay the renewal fees. Your renewal fee for a business license in Dubai is usually the same as the initial registration fee. The exact amount varies based on your license type and business category.

Receiving the New License

After payment, DED will issue your renewed license, which is valid for the next 12 months.

On-time renewal is highly essential. The delay will lead to heavy fines، which can range from 10% to 50% of the renewal fee, business restrictions, or even closure. We suggest renewing your license in advance before its expired. That’s how you’ll avoid unnecessary distress and penalties.

Keep in mind that this is not a mere formality; this is an important process that keeps your business legally protected and running smoothly.

Common Mistakes to Avoid During Business License Renewal

Many business owners face avoidable setbacks when renewing their licenses in Dubai. Common mistakes include failing to check the lease agreement’s expiration and submitting incomplete documents. Others miscalculate the renewal fees or fail to get required approvals for certain business activities. Such mistakes lead to delays, penalties, or even rejection of applications. To avoid issues, prepare a checklist of what needs to be submitted, ensure accuracy of all information provided, and begin the process early. You can also consult with experts in business setup to work your way through complicated renewals. This is essential as apart from the fines, there are grave consequences for not renewing your business license in Dubai and include but are not limited to:

• Inability to operate the business legally
• A ban to conduct trade and commercial transactions
• The company to be included in the blacklist
• Deportation of the members of the company in certain cases

Dubai Company License Renewal Cost

The very major expense you’ll encounter During Business License Renewal is for the valid tenancy contract, which is a major requirement for renewal. You have to provide a new Ejari (tenancy agreement) and the cost of renting office space in Dubai varies a lot depending on location and season. Generally, prices range from 1,500 to 5,000 AED per square meter, with even higher rates realized during those cooler months when demand peaks. The cost for renewing your company license in Dubai is highly based on your type of businesses and will differ with many other factors affecting the result as well. They include:

• The workers’ count
• The annual office, store, warehouse, and any other premise’ annually rented
• The jurisdiction and economy where the company is located

The price of a Dubai company license renewal in 2024 however, is around AED 8,000 to AED 15,000 (around $2,180 and $4,084 USD, respectively).

Additional Cost of Renewing your Company License in Dubai

The cost of renewing a business license in Dubai does not just stop at the standard fees. Depending on the activities one undertakes, businesses may require external approvals. For example, food businesses have to obtain permits from the health authority, while construction firms need approvals from the municipality.

You must also add to your calculation your EJARI attestation fee, applicable for your trade license renewal and any other Dubai economy activity. EJARI fee for 2024 is AED 175. In case an applicant has a residential EJARI license, a discount can be applied to their license fee for renewal. Once your payment is processed, you will receive the updated license, allowing your business to continue operations legally.

Although, for free zone companies, the process is slightly different. Some free zones may require additional approvals, financial audits, or third-party clearances before issuing a renewed license.

Renewal of Free Zone License vs. Mainland License

Free zone and mainland business licenses have different ways through which their renewal can be processed in Dubai. The license renewal of mainland companies, as we explained above, is done through the DED and must have a valid Ejari tenancy contract, as well as other relevant approvals. Companies in the Free zone in Dubai, however, renew their licenses with the pertinent free zone authority. That generally requires shareholder documents and annual reports. Facility lease agreements, not necessarily Ejari, might be required for free zone renewals. Of course, fees, timelines, and required documents will also differ between the two. It’s wise of you to consult your zone’s authority or business consultant for guidance tailored to your setup.

Online vs. Offline Renewal Process

Business license renewal in Dubai can be done either online or offline. Online renewal through several portals we will introduce below is convenient and fast. The businesses upload the documents, pay the fees electronically, and get the license within days. Offline renewal involves visiting the DED service centers and submitting the paperwork in person. This method is preferable for those needing assistance with complex renewals or approvals. Both require updated documents and the payment of fees. Here are some of the portals allowing you to get your license renewal in Dubai:

• Dubai e-Government Portal: The official government portal for all services that are responsible for license renewal in Dubai.
• DED e-Services Portal: The Department of Economic Development’s dedicated portal for all services that are business-related.
• Dubai Now App: The Dubai Now App is a one-stop application for all government services in Dubai.

For most businesses, online renewal saves time; offline renewal offers personalized support. Choose the method that suits your business and comfort best.

Advantages of Company Setup in Dubai

The benefits of registering your company in Dubai are endless, this is a very attractive destination for entrepreneurs and investors for the reasons below:

• Investment-Friendly Environment: Dubai has one of the most advanced economies in the region, we all know about their business-friendly environment and policies promoting foreign investment. You can even get UAE residency by investment. Their modern infrastructure and supportive government initiatives are recognised globally and need no introduction.
• High Level of Security: Dubai is famous for its exceptional safety standards for both private citizens and companies. This environment allows you to focus on growing your businesses with confidence, being sure of its sustainability.
• Shopping Capital of the Middle East: Dubai’s diverse and vibrant markets have earned it a reputation as the shopping capital of the region. Retail, trade, and commerce are among several advantages that make Dubai one of the first preferences in regard to company registration.

Required Documents for Dubai Company License Renewal

Before discussing the documents for a renewal, it is important to ensure compliance. Make sure you settle all outstanding fines, taxes, and penalties to avoid renewal delays. When that is done, it’s time to gather documents. They are the same documents, whether you choose to go about this in person or even online and they include:

• A current Dubai trade license copy
• A leased premise agreement copy
• A leased premise agreement attested Ejari copy
• Copies of a shareholder and manager’s passports and visas
• A certificate of taxes and insurances
• A BR/1 form for a renewed chamber of commerce, completed and signed by all its partners.

Free zone companies may need additional documents, such as financial audits or NOCs (No Objection Certificates) from regulatory bodies.

After collecting all that is needed, you must file your renewal request online via the DED website or through the respective free zone authority.

Penalties for Not Renewing a Dubai Company License

As we mentioned briefly, ignoring to renew your Dubai company license in a timely manner can have catastrophic effects on your business and your visa status. If you have got your Dubai residency through company registration, you must pay extra attention in such circumstances.

The penalties for not renewing your Dubai company license include:

Monetary Penalties

A failure to timely renew a company license will first lead to monetary penalties. Such penalties are either monthly (usually starting at AED 250) or in a single payment (an average of around AED 5,000). They’ll also add to the overall cost of renewal. The bank accounts linked to the company could also be affected. This can disrupt cash flow, payroll processing, and supplier payments.

Blacklisting

Companies that delay renewal for a period of a few months can be blacklisted by the DED (Department of Economic Development).

They can face permanent revocation of the business license. Furthermore, foreign companies not renewing licenses can forgo the opportunity to have branches in Dubai or anywhere else in the UAE.

On the other hand, a discount in renewal fee is granted for timely renewal of licenses by companies, issued by the DED. To escape penalties, it is best to start processing for renewal at least 10 days in advance of when the current license will expire.

Impact of License Expiry on Visas

A business license and its linked visas are interconnected. If the company license expires:

• Employee and investor residency visas may become invalid.
• New visa applications will be blocked until the renewal is complete.
• Fines may be imposed on visa holders who remain in the UAE under an expired company license.

Renewal Grace Period: Does Dubai Offer One?

Some jurisdictions provide a grace period after the license expiration date before imposing fines. In Dubai, businesses may get a short grace period, but it is not guaranteed. To ensure compliance, it is best to renew before the deadline.

Duration for Dubai’s Yearly License Renewal

The general duration for completing the company license renewal will vary between 1 and 2 weeks.

The actual processing duration, nevertheless, is contingent on factors such as:

• The kind of business
• Taxation requirements and compliance with laws
• The efficiency of processing in government

To make processing a success, preparing documents at least a month in advance of when the current license will run out is advisable. Unexpected delays or missing paperwork can sometimes extend your process, leading to fines or temporary business suspension. Staying ahead of these kinds of deadlines ensures a smooth renewal and uninterrupted operations.

To avert potential complications and penalties, companies can rely on the expertise of business consultants in or outside of Dubai’s. Experienced consultants can simplify processing and mitigate risks. They can also save companies time and money in terms of license renewal.

Can I Freeze My Company License Instead of Renewing?

Freezation of a company license means temporarily putting operations in stand-by state. It is normally performed for cutting down operational expenses when a company doesn’t have to be active.

If you’re in a situation where you don’t wish to conduct business in Dubai temporarily, you don’t have to renew your license either. Instead, you can freeze your company license under DED provisions.

Reasons for Freezing a Dubai Company

Company owners can freeze their company license anytime. This is normally in case of:

• Short-term Business Inactivity: For instance, a tourism company can have slow demand during Dubai’s off-season (e.g., summer holidays).
• To save unnecessary expenses: the company can suspend operations and let go of the employees for a few months without having to worry about the monthly salary of a worker in the UAE and resume during peak demand times.
• Saving On Operating Cost During Certain Periods: A food processing firm, for instance, might face increased raw material and shipping expenses and choose to freeze for a while.

In such a scenario, shareholders can choose to suspend operations for a few months to save high operational cost. The company can use such a period for:

• Optimizing its processes
• Seeking alternative suppliers at a reduced price
• A manufacturing firm can move its factory to a new premise or introduce new machines, and therefore, it can suspend operations for a while.

To allow for a convenient transition, such a company can suspend operations for 6 months and then reopen under an enhanced business structure.

Freezing a Dubai License: Rules & Cost

The DED permits a one-year freeze for a license.

The company cannot conduct any kind of business during such a period.

All financial and legal requirements, including Ejari tenancies, must still be fulfilled.

Advantages of license freezing a firm in Dubai include avoiding accumulation of penalties for license expiry.

Plus, the owner/shareholder can re-open a new establishment in the UAE and apply for a new trading permit with DED. Following freezings of licenses, companies will be able to manage financial risks, save expenses, and re-commence operations when desired. In most cases, when a Dubai company wishes to freeze its operations for a duration of one year, its administration and government fee can range between 2,000 and 6,000 AED. For each additional month that is added over and above that one year, an additional 210 AED fee will have to be incurred.

Final Words

Renewing a business license in Dubai keeps your operations current and saves you from costly penalties. You can easily take advantage of business growth in this vibrant market, simply by following the proper steps and planning in advance.

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