License Not Renewed? Here are the Penalties on Expired Business License in Dubai

Having a valid license in Dubai is your free pass to operating your business anywhere in the UAE. As a license holder, you must keep a check on your license renewal as and when required. If you don’t renew the license on time, you will have to pay heavy penalties. Let us know more about the different penalties you must pay for the failure of license renewal.

Business License Renewal in Dubai

The DED and other governing authorities of the UAE mandate that all business licenses are renewed well before expiry, or else you will be penalized. Though there are a large number of issues that could be raised because of the non-renewal of a business license, the primary three are as follows:

1. Monetary Penalties

The Dubai Department of Economic Development (DED) has set out an online and SMS renewal system for renewing trade licenses. But at times, when the businesses fail to renew the license on time, they are imposed with forfeits such as – a company practised without a license could be penalized with AED 5000. In contrast, failure to renew a license within the specified time limit could cost AED 250, with an additional office for an existing license without permission fined the entity AED 2000.

2. Blacklisting the Company

When businesses continue their business activity without renewing their trade license, it is possible that the company could be blacklisted. Getting blacklisted is the most severe method of punishment that the supervisory authorities can authorize. Being blacklisted not only include having limitations placed on all types of operations, such as:

• The company will not be permitted to participate in any business procedure.
• Visa could be annulled with a travel ban.
• Sponsors could break away from your company, leaving you in a lurch.
• In some cases, the owner, managers, shareholders, and directors could even be deported from the UAE.

But, they also give you a fair chance to renew the license. The UAE government allows a grace period for all its business owners to get their ducks in a row. You can renew your Dubai trade license and registration during this grace period.

Yet, if you still fail to comply with the necessities– and end up on the blacklist– you will find yourself in a challenging situation. Continuing your business while being blacklisted is no walk in the park, as you will find out if you ever land on the list.  Your businesses’ day-to-day tasks will be blocked partly or entirely, and you can even face severe penalties. That means that it is better to stay on top of your legitimate duties in the UAE. 

3. Restricting Expansion

Even a small business license renewal takes place year on year; occasionally, business people lose track of when the license must be renewed. A month’s delay could be worse because these small businesses in the future are not allowed to expand under these circumstances. Companies need to have a clean record of expansion plans or suspend or liquidate the entity. So, suppose you are a little late in renewing your business license. In that case, your business activities will be suspended, and your Company will not be allowed to expand its operations in the future.

For a small business in the first few years of commencement, even a small inconvenience can throw a wrench in the works and stop you from accomplishing the success and acknowledgement you deserve. Besides the previously mentioned consequences, an expired business licence can also cause bankruptcy, making your company susceptible to voluntary or forceful liquidation.

Therefore, it should be avoided at all costs.

Conclusion

It can be hard to set up a business and operate it with so much competition in the UAE. So why let one mistake ruin the entire dream? To avoid this, take some measures like marking the expiry date on your business calendar and setting a reminder to renew it before the deadline. Or you can delegate this responsibility to someone within the company. Or you can even hire an external agency that can do the job for you. Whichever way you choose, make sure that it works so that your business does not inevitably suffer because of it.

We at Commitbiz can make a timely renewal of your business license without you worrying about it. Our consultants will take care of everything while you focus on growing and nurturing your business. Get in touch with us today for more information.