Trade License Renewal in Dubai

It is common knowledge for everyone running a business in the UAE that it requires a license. These licenses differ in type depending on your business activities and several other factors, along with authority bodies that issue them. The licensing process and the required steps are mostly the same for different license types apart from the desired company formation options and other business-specific aspects.

However, licenses are not permanent, so acquiring one is not the end-all solution. Trade licenses need to be renewed – typically on an annual basis. As such, failure to renew a license may result in very undesirable consequences, including fines, blacklisting, or even termination of your business.

Being properly informed on this issue is vital for business owners who want to ensure continuous and smooth operation of their company in the UAE in the long run. This is why we at Emirabiz have compiled this guide for renewing a trade license in Dubai.

Document Requirements for Trade License Renewal

In Dubai, the process of renewing your trade license will require you to collect the following list of documents:

• Photocopies of passports of all business partners
• Photocopy of your trade license
• Valid tenancy agreement
• BR/1 form

Note that having a valid tenancy contract requires you to have Ejari registration, as it will be checked by the Real Estate Regulatory Authority for validity.

Companies registered in Dubai’s free zones have additional paperwork requirements, such as:

• No Objection Certificate (if applicable)
• Original or notarized copy of Certificate of Continuity of Existence or Good Standing or Current Trade License in case of Branch of Onshore UAE Company (if applicable)

Steps of the Trade License Renewal Process

To renew a trade license in Dubai, you will need to follow the necessary procedures set by the relevant authorities. Here is a general overview of the process:

1. Documentation. Gather all the paperwork required for trade license renewal and ensure its compliance with the corresponding regulations.
2. Application submission. For mainland Dubai companies, the application is typically submitted online through the official DED / Dubai Economy & Tourism portals or via the Invest in Dubai platform, while free zone entities apply through the client portal of their respective free zone authority.
3. Fee payment. Pay the applicable trade license renewal fees. The fee size may significantly vary depending on what business activities you engage in under your trade licemse and the operation jurisdiction of your business.
4. Inspection (if applicable). Some businesses may require an inspection by the relevant authorities to ensure compliance with regulations. If an inspection is required, schedule it accordingly.
5. Approval and issuance. Once the application is reviewed and all requirements are met, the authorities will approve the renewal, after which you will receive your renewed trade license. In many cases, the renewed license is issued electronically and can be downloaded directly from the online portal.

In addition to online renewal through official portals, you may also use the DED Auto-Renewal Service for certain mainland Dubai licenses. Another way to renew your trade license is using the Auto-Renewal Service that has been recently launched by the DED. In orer to execute automatic renewal, send an SMS with the number of your expired license to 6969 and then pay the calculated amount of mandatory renewal fees by following the payment link attached. Once the payment comes through, the  receipt will be sent to you via email. Please note that this service applies to eligible DED mainland licenses and may not cover most free zone licenses. In some cases, if additional external approvals are required, you may be asked to upload supporting documents or complete the process through the online portal instead of relying solely on SMS.

It must be noted that specific requirements and procedures may vary with regard to the legal structure and business type, jurisdiction, and any recent updates in regulations. It is advisable to seek professional assistance to ensure a smooth trade license renewal process in Dubai.

Free zone license renewal specifics

If your company is registered in a Dubai or UAE free zone, the renewal process is handled directly by the respective free zone authority rather than DED. In practice, you will usually renew your license through the free zone’s online client portal, submit updated lease or flexi-desk agreements, passport and visa copies of shareholders, and in some zones provide audited financial statements or additional compliance reports. Renewal timelines, required documents, and penalties for late renewal are set by each free zone and may differ from the rules applicable to mainland Dubai.

 

Consequences of Not Renewing Your Trade License in Dubai

Not renewing your trade license in Dubai can have several consequences. Firstly and foremost, having a valid trade license is a legal requirement for operating a business in Dubai. Failing to renew your license means you are operating your business illegally, which can result in penalties, fines, or even legal action.

Additionally, not renewing your trade license can negatively impact your business operations. Without a valid license, you may face difficulties in conducting business transactions, such as opening bank accounts, signing contracts, or obtaining necessary permits. This can hinder your ability to operate smoothly and can cause you to lose credibility and trust among customers and business partners.

Furthermore, the government authorities in Dubai actively monitor businesses to ensure compliance with licensing regulations. If you are found to be operating without a valid license, you may face inspections, audits, or investigations, which can disrupt your business operations and potentially lead to further penalties or sanctions, including:

• Financial penalties. In Dubai, failing to renew your trade license and operating under an expired one can result in you being fined by the Department of Economic Development. Businesses may face an administrative fine of AED 5,000 for operating without a valid trade license, as well as an additional AED 250 per month after the expiry of the grace period for continuing to run a business under an expired license.
• Company blacklisting. Running a company with an expired license can get you blacklisted by business partners and the authorities, which in turn can lead to your business being terminated.
• Company termination. If you fail to comply with the trade license renewal requirements and operate a business illegally, your enterprise can be subject to termination by the DED at any point. In severe cases, you may face serious difficulties with opening a new license under the same name or with the same shareholders in the future, as each situation is assessed by the regulators on a case-by-case basis.

Note that it is always benificial to consult with legal experts or relevant government agencies to understand the specific implications of not renewing your trade license in Dubai.

Trade License Renewal Costs in Dubai

The overall costs of renewing your trade license in the Dubai is based on a number of factors, including your company’s legal entity type, size, business activities, etc. This will determine the necessity of securing additional approvals from the authorities, which can significantly affect the overall price you will need to pay for license renewal. For typical small and medium-sized mainland setups, in Dubai, the overall sum typically ranges from AED 8,000 to AED 15,000 and consists of the cost of the license itself and additional fees associated with the renewal process. For certain regulated or high-profile activities, such as general trading or specific investment-related services, the payable amount can be higher due to additional approvals and activity-related fees.

Here is the list of possible fees you may be required to pay:

• AED 10 for the license registration fee
• AED 10 for the knowledge dirham fee
• AED 10 for the innovation dirham fee
• ~AED 350 for brand advertisement
• ~AED 50 for a service request form
• From AED 1,000 to AED 3,000 for a foreign trade name
• ~AED 15,000 for activities under a General Trading license
• ~AED 15,000 for activities in the investment field
• AED 10,000 for activities in the construction field
• ~ AED 25,000 for the business center fee
• AED 1070 for the trade license fee
• AED 300 for Dubai Chamber fees

For detailed information about the fees you will be subject to while renewing your trade license with regard to your particular business setup, seek expert advice from field professionals or the corresponding authority bodies. In practice, the final amount for a mainland license renewal is reflected in the electronic payment voucher generated by DED or the Invest in Dubai platform once your activities, location and all required approvals have been reviewed.

Mainland Dubai license renewal grace period and late-renewal penalties

It is important to know that in mainland Dubai, a trade license comes with a 30-day grace period for its renewal. Once this time runs out, you will face a monthly fine for running a business under an expired license, which can heavily increase with time, as well as other penalties.

Summary

If you want your business in Dubai to run smoothly and without the risk of unnecessary interruptions and suspensions, make sure to keep track of the status of your trade license and renew it in due time. To facilitate this process, it is advisable to prepare for it in advance.

If you’re looking for professional advice on how your business setup cay potentially affect the license renewal requirements and costs or need help in guiding you through the renewal process, Emirabiz offers efficient and cost-effective solutions for trade license renewal in Dubai. Get in touch with our team today to renew your trade license with ease.