Every company established in Abu Dhabi must renew their business license annually. The licenses are a legal document that allows companies to engage in business activities specified to the company.
Types of Licence in Abu Dhabi
The essential requirement for all business activity in Abu Dhabi is one of the following three categories of licenses
- Commercial licenses are covering all kinds of trading activity.
- Professional licenses
- Industrial licenses for establishing manufacturing activity
The Authorities also issue some individual licenses such as Business Operation Permit, Entrepreneurial Business License etc. subject to specific criteria.
Documents Required for a Trade License Renewal
- Commercial License Renewal Form.
- Copies of valid passports of concerned persons.
- Copies of Valid UAE ID Card of relevant persons.
- Copies of the Family members Id's.
- A copy of the valid lease contract sealed by the government.
- No objection letter from the respective authorities in case that the activity may not be practised except with an authorization from the relevant authorities. (Original).
- A copy of the authentication of the signatures attested by the Notary Public.
Conditions Applied for Trade Renewal
Here are some conditions applied for the trade renewal process.
Offline Documents Condition
- In case of the expiry date of the license is for more than three months; you shall undergo through Inspection Division in the Department of Economic Development.
- The license application form should be submitted by the owner or by a legally authorized representative.
- In case the permit is a subsidiary from Emirate of Abu Dhabi or any of the Emirates, a valid copy of the parent company's license shall be linked.
- In case the company is a subsidiary of a foreign company, the License certificate shall be renewed at the Ministry of Economy.
Electronic Documents Conditions
- Documents should be in PDF format.
- The copy shall be the clear and correct colour format (i.e. neither too light nor bright)
- The papers shall be labelled (Lease Agreement, Partnership Agreement…).
- The average size of the documents is 70 Kbytes.
Trade License Renewal Process
The process of renewing the trade license is -
- Firstly companies must assure their tenancy contracts are valid for greater than one month period from the date of application.
- Companies must deal with the renewal of their tenancy contract before submitting their Commercial License renewal application at the Department of Economic Development.
- Applying with all required documents.
- ACT handles all the document submission at DED service centres on behalf of your company.
- Working with third-party consultants assures that the documents submitted are appropriate.
- Third & final step for trade license renewal in Dubai is to receive payment vouchers and make payment of fees. ACT facilitates the sum of the prices at the service centres on behalf of the company.
- If you submit all the proper documents, the payment voucher will be received within 3-4 days by ACT. If the office space shares between 2 or more companies, the payment voucher can take up to 5-7 days.
- The business license renewal process will cost you around AED 8000 to AED 15,000.
Penalties Imposed If You Neglect To Renew The Business License
- When a licensed business expires the DED in Dubai can impose a company with several forfeits.
- A firm practising without a license could be penalized with AED 5000.
- When a company runs an additional office space for an existing license without permission they are penalized with 2000 AED.
- When a company fails to renew a license within the specified time-limit could cost AED 250/month.
- An expired trade license can lead your company to be fined. Any delay or lag in payment can also result in penalties to the concerned business. The penalties start accumulating right after the expiry date.
- Continuation of Business without renewing the business license can lead to the business being blacklisted by the respective authority. In such a case, the company must stop all the activities, sponsors and the visas enlisted under the business name can be made null. The extension of the business can also be restricted if the license renewal is not done within the stipulated time frame.
Black Listing of Company
When the company continues its business activities without renewing can lead to the company being blacklisted by the respective authority and would stop all the activities of the company. Sponsors and the visas enlisted under the business name can be made null and void.
Restriction on the Expansion of Business
The companies with an expired license are not allowed to extend their business activities. Companies need to have a clear record if there are plans for extension.
An Expired Business License can Ruin the Company
Make sure you know the expiry date and work in the time to get it renewed, if possible, before the deadline. Either way, keep your license valid, or your business will inevitably suffer, and you could be at risk of losing everything.
Online Trade License Renewal Process
DED has recently launched online portals where companies can renew trade licenses online; however, this requires the company's owners to set up accounts before the renewal. The owners of the company may only create the online account at DED by submitting personal documentation. The portal also allows owners to make an online payment, but it must be noted that the registered payment account must be under the name of the owner of the online portal/ company.
Challenges Faced During The Process
If there is a delay or non-renewal of business license in Dubai, the company could have to pay the penalty and can also be blacklisted. The company's plans to set up their business in the region in future could also be ruined. Therefore, many entrepreneurs feel that appointing an expert service provider in UAE is a more comfortable and safer option.
If your documents are not in the correct order, then the renewal of a business license can take more time. You need to put all the documents in proper order. As running around, various government agencies can be gruelling; many business owners find it easier to outsource this task.
If the renewal of a trade license is delayed, then the company has to pay penalty fees. Commitbiz is a business setup consulting company which will assist you in the trade renewal process, and we will assure that all licenses are renewed within the expiry date. If you have decided to take the help of third party consultants, feel free to contact us!