A Guide on Trade License Renewal in UAE
UAE has successfully emerged as a business hub over the last couple of years. The advantages of setting up a company in UAE are many; the strategic location, minimal tax and favorable policies are few among them. While fulfilling your dream of setting up a company here, one should be aware of the various rules, regulations and polices pertaining to it.
Trade license and its timely renewal is a mandatory requirement when it comes to setting up your business in UAE. According to The DED (Department of Economic Development) “trade license is a legal certificate that allows a business owner or an investor to indulge in activities which are mentioned in the license.”
Types of License
DED issues three kinds of licenses mainly;
- The commercial license: This license includes all types of trading activity.
- The industrial license: This is required if you plan to start industrial or manufacturing activity.
- Professional license: Businesses looking to involve in service-oriented activities and skilled individuals can apply for this license.
Ensuring the validity of Tenancy Contract
The primary step is to ensure the validity of tenancy contract. The contract should have a validity of minimum one month and this must be attested by Ejari. Cases wherein the contract doesn’t have a validity of at least one month, the renewal process will not be possible.
Applying for trade license renewal
The application of license renewal must be made to DED along with all the supporting documents. Below we have enlisted the documents required for the process;
- A typed BR/1 form
- Ejari Registration Certificate and a photocopy of Tenancy Contract
- Photocopy of the current business trade license
- Passport photocopies of all the business partners
Initiating the payment
The DED will allot a payment voucher following the application of license renewal. Upon receiving the voucher, the payment can be made and one will get the renewed license.
Trade License Renewal for a Free Zone Company
The procedure for renewing trade license in dubai may not be the same for all the free zones; the rules vary from one free zone to another. Below we have listed certain documents that are required by most of the free zones to renew their license;
- Original trade license document or a copy of it depending on the free zone
- An audit report
- P.O. box confirmation renewal
- Passport copy of the shareholder
In case, the shareholder is another corporate or a foreign company, then the renewed trade license of the parent company will have to be submitted.
Consequences of non-renewal of trade license
Non-renewal of licenses will attract huge penalties and can even lead to black-listing of the company. Business that continue their operations without a license and businesses that do not renew the license within the given time period, will be penalized. Also, companies with expired licenses are not allowed to expand their operations under any circumstance.
One puts in a lot of effort, money and time in starting a business; a minor mistake shouldn’t ruin the reputation of the entire company. Hence it is always advisable to seek the assistance of an agency that will take care of trade license registration process along with on-time annual renewals.
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