3 reasons why you need to keep your Dubai business license up to date
Here we will discuss below how to avoid business license penalties. Businesses in Dubai are improving because they use good business strategies and follow the rules and laws to make business fair and move forward. A valid business license is required in Dubai for anyone who wants to operate a commercial enterprise in the city. So, the time frame for renewing the business or trade license needs to be carefully examined. Renewal of the business license or trade license can cause bad things, possibly even shutting the business down.
Read on to learn more about the different fines and penalties that could happen to your business if its business license has expired.
Managing a company in Dubai can be challenging due to the city’s extensive collection of stringent rules and regulations. But having a set of rules to follow when doing business helps cut down on illegal activities and creates a good business environment. A business license makes sure that a company only does the thing for which it has a license. Because of this, Dubai has strict penalties for not renewing a business or trade license.
Rules about penalties for not renewing business or trade licenses
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- Fines in money
The Department of Economy and Tourism (DET) is the governing body in Dubai that is in charge of issuing licenses for commercial enterprises and commercial activities. They oversee and keep an eye on the business registration process and ensure that businesses only get business licenses for legal business activities. DED in Dubai provides business owners with a wide variety of options for renewing their business licenses, all of which are intended to make the process go faster. If a business is found to be running without the proper licenses, it could be fined AED 5,000. A fine of AED 250 may be levied against you if you fail to renew your license before the specified deadline. If a business license is used for more than one location, the owner will have to pay a fine of AED 2,000.
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- Putting the company on a “black list.”
When businesses keep trading or doing business without renewing their license, the government can keep an eye on them. They have a higher chance of being put on a blacklist. A high-level punishment a business can face is being put on a “blacklist.” It will have a big effect on how the company does things, like:
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- The business will not be allowed to keep going.
- Business visas and other types of visas can be taken away when a travel ban is in place.
- Sponsors can stop helping your company right away if they want to.
- There is also a chance that the company’s people could be sent away from Dubai.
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Only if the businesses don’t renew their licenses during the grace period given by the relevant authority will these harsh measures be taken. The business needs to keep track of its license renewal dates because an expired license makes it harder for the company to do business with other companies in Dubai.
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- Making it harder for businesses to grow
Suppose a small or medium-sized company or business in Dubai doesn’t renew its business license. In that case, it will have a very hard time. Small businesses need to be renewed every year, which they might not be able to do. If a small business doesn’t renew its business or trade license, it might not be able to grow any further. If an SME business wants to grow, it needs to have a clean record of how it does business. If you don’t renew your business license, you might have to stop doing business or be forced to do so. So, if a small or medium-sized business wants to do well in Dubai, it must follow all the rules and regulations.
The Government of Dubai implemented various reforms designed to make the city friendlier to commercial enterprises. The reforms are meant to give businesses in Dubai, a very competitive place, the financial and growth help they need to succeed. Some rules made it easier for new businesses and other businesses to get out of trouble.
The business license may be expired in Dubai if the company does not renew it on time. There is a three-month extension for renewal. After that, the company will have to pay a fine of AED 10,000 and may also face other penalties.
Pros:
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- The company will be able to operate legally after renewing the license.
- It will avoid any legal penalties that may be incurred.
- The business will be able to continue its operations without interruption.
- Renewing the license on time will show that the company is responsible and compliant with the law.
- It will ensure that the business is operating under the correct legal status in Dubai.
Cons:
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- The company may have to pay a fine if it does not renew the license on time.
- It may face other penalties such as having its business activities Suspended or Cancelled.
- The company may be blacklisted
Documents to renew business licenses
- Copies of the license owner’s passports
- BR/1 form should type.
- Copy of current business license
- A copy of the tenancy certificate and an Ejari registration certificate.
If you want to set up a business in Dubai that does well, you will need to know how to deal with the problems that may come up every day. However, some things can be completed on time, and it would not be prudent to jeopardize the company by breaking the rules and regulations you are already familiar with. It would be best to hire a third-party business provider to ensure you follow all the rules and regulations needed for the business to run smoothly.
In the event that you are interested in receiving expert advice, please do not be reluctant to call our Business Consultant. If you have any questions, please do not hesitate to get in touch with us by e-mail at info@crosslink.ae or by phone at +971 4 321 6631.
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