Over the last two decades, Dubai has seen tremendous growth in the field of business setup. Along with this growth, Dubai has developed a strong regulatory framework under which businesses can work. The framework sets the rules and regulations for running a business in Dubai, and one of the most important regulations is that all businesses operating in Dubai must have a valid trade license.
In the absence of a valid trade license in Dubai, you are supposed to be lie under looming threats of fines, penalties and even blacklisting. Therefore, your business license must be renewed before its expiry for smooth and uninterrupted functions in Dubai. In this article, we describe all the possible aspects of trade license renewal in Dubai. In the end, you will be clear about what benefits you can achieve while renewing your trade license with the support of Now Consultant.
Why Trade License Renewal Is Important In Dubai
The following points highlight the importance of renewing your trade license in Dubai:
Legal Obligation:
A trade license is the legal obligation in Dubai for both mainland and Free Zone businesses. This legal requirement is strictly enforced by the Department of Economic Development (DED) and the relevant Free Zone Authority. Due to this legal requirement, a trade license is important in Dubai.
Maintain Business Continuity:
A valid trade license is very important for maintaining business functions like signing contracts, invoicing, and importing goods. Without a valid trade license, even routine tasks become legally restricted or impossible to complete.
Avoid Legal Issues:
An expired trade license may cause financial penalties, ranging from AED 250 per month to AED 5,000. If the non-renewal continues, it can lead to blacklisting and complex legal issues. In order to avoid legal issues for your business in Dubai, a trade license has great importance.
Compliance with Visa and Labor Laws:
Your trade license is directly linked to your ability to manage employee and investor visas. Without renewal, you cannot issue new visas or renew existing ones. In addition to this, a valid trade license is required for a company to comply with labour laws, which is mandatory according to UAE regulations.
When You Should Renew Your Trade License In Dubai – Key Reasons
Annual Renewal Requirement
The following is the timeline for trade license renewal in Dubai:
Renewal Timeline:
Mostly, a trade license in Dubai is valid for one year, and you need to renew your license before the end of the validity period.
Grace Period:
In Dubai, businesses are provided with a grace period of 30 days even after the end of the validity of a trade license. However, it is considered a very sensitive time in which you may be under looming threats of legal and financial restrictions if further delayed.
Reasons for License Renewal In Abu Dhabi:
The following are the reasons that force business owners to renew the trade license of their businesses in Dubai:
Legal Compliance:
It is mandatory that your business license be valid in accordance with the legal requirements of Dubai regulations. If your business fails to comply with the trade license regulations, it may face penalties or legal actions by the concerned authorities.
Business Continuity:
In order to continue your business operations in Dubai, your trade license must be valid and renewed before the end of the expiry date. Hence, the timely renewal of your license will allow your business to continue its operations without disruptions.
Access to Government Services:
A valid trade license is necessary to access key government services. These include visa applications, municipality approvals, and other official processes. Without renewal, all such services may be delayed or denied.
Banking Operations:
Banks require an active license to maintain or open business accounts. Financial transactions like payments and loans are only processed if your trade license is valid. If you want to continue uninterrupted banking operations, you must renew your trade license.
Build Trust:
Clients, partners, and suppliers require your trade license to be up to date and hold its validity. It is necessary to build trust in the business in the market, which attracts investments and clients for your business in Dubai.
Tender Participation:
To bid on government or private tenders, companies must have a valid trade license. This is the basic eligibility requirement for participation in any tender in Dubai. So, the renewal of your license allows you to seize new business opportunities without restrictions.
Requirements of Dubai Trade License Renewal:
The following requirements must be fulfilled for renewing your trade license in Dubai:
Ejari Registration: A valid Ejari certificate confirms your mandatory tenancy contract. The tenancy contract must be valid while renewing your trade license.
BR/1 Form: This is the official license renewal form, requiring signatures from all business partners.
Copy of Existing Trade License: A copy of your existing trade license is needed for reference.
Passport Copies: Photocopies of the passports of all business partners are also required
External Approvals: You may need external approvals from the relevant authorities, depending on your business activities.
How to Renew a Trade License in Dubai?
The following is the step-by-step process to renew a trade license in Dubai:
Step 1: Verify Your Tenancy Contract
In the first step, you need to verify that your office space or workspace has a valid tenancy contract. The contract must be valid for at least one month at the time of renewal. For businesses in Dubai, this tenancy must be registered and attested through Ejari, which is Dubai’s official rental registration system.
Step 2: Collect All Required Documents
In the second step, you have to gather all the necessary documents needed for the renewal process. The required documents are listed above. You need to ensure all the documents are accurate to prevent delays during submission.
Step 3: Submit Your Renewal Application
In the third step, you must submit your application to the relevant authority. For mainland businesses, you are required to submit your trade license renewal request through the DED online portal or by visiting a DED service center. For Free Zone businesses, you can submit the application through the relevant Free Zone Authority.
Step 4: Pay Fee Voucher
In the fourth step, once your application is reviewed and approved by the relevant authority, you will receive a payment voucher. This voucher includes the total fee you need to pay for the trade license renewal. You can pay the renewal license fee either online or in person.
Step 6: Obtain Renewal License
In the final step, after successful payment, your renewed trade license will be issued. You can download it either from the DED portal or collect it in person from the nearest DED service center or the Free Zone Authority.
Dubai Trade License Renewal Fees:
The cost to renew a Dubai trade license typically ranges from AED 8,000 to AED 18,000, depending on factors such as the business type, jurisdiction (Mainland or Free Zone), and office setup. Mainland license renewals usually cost between AED 10,000 to AED 15,000, while Free Zone renewals vary by authority.
The cost also depends on your jurisdiction (mainland or Free Zone), business activity, and license type (professional, commercial, or industrial). There may be an addition to the total cost if your business needs necessary approvals from the authorities. It is better to consult with business setup experts in Dubai for the exact estimate of the cost for the renewal of your trade license.
Get Expert Help to Renew Your Trade License In Dubai!
At Now Consultant, our business setup experts made it easy to renew a trade license in Dubai. Whether you are running a business on the mainland or in a Free Zone, we complete the renewal process from verifying your Ejari registration to getting final approval from the relevant authority.
We ensure your tenancy contract is valid and help you gather and verify all the necessary documents in compliance with the regulatory authorities. With our support, you can save significant costs that you may have to pay in the form of fines, penalties, or disruption of your business operations.
FAQs:
Can I Renew My Dubai Trade License Without an Ejari Tenancy Contract?
No, you cannot renew your Dubai trade license without a valid Ejari tenancy contract. The Dubai Department of Economic Development (DED) requires proof of a registered business address through Ejari as part of the license renewal process. It must be attested by the Real Estate Regulatory Authority (RERA), and without it, your application will be rejected.
How Long Does It Take To Renew a Trade License In Dubai?
It takes around 3 to 7 working days to renew a trade license in Dubai, depending on the completion of all the required documents. If there are any errors or additional approvals needed, the process may take more time.
What Is The Grace Period After My Trade License Expires In Dubai?
Dubai offers a 30-day grace period after your trade license expires, allowing you time to complete the renewal without paying late fines. During this period, your business is at risk, so you are advised to renew the license before starting the grace period.
What Happens If I Don’t Renew My Trade License On Time In Dubai?
If you miss the renewal deadline and the grace period of 30 days for your trade license in Dubai, your business will face penalties. The penalties start at AED 250 per month, and if the delay persists, it goes to AED 5,000. It may also cause the suspension of your business operations and even blacklisting.
Can I Renew My Dubai Trade License If There Are Outstanding Fines?
No, it is not possible; first, you must clear all outstanding fines before you can successfully renew your Dubai trade license. The renewal application will not be processed until all dues are paid.
Can I Update My Business Name or Activity During The Renewal Process?
Yes, you can change your business name or change its activities while renewing your trade license in Dubai. However, some changes may need additional documentation and approvals from relevant authorities.
