Three major penalties on an expired business license in Dubai

Posted on 27 June 2017 Author: Published in: Trade Licenses Published by: Shuraa Business Setup

Business establishments in UAE, be it a mainland business, freezone institution or an offshore organization – any of these forms of company are allowed to regulate, provided they hold a Business Trade License or constitutional documents validating the entity as well as their existence. On an annual basis, these business entities are required to follow the practice of trade license renewal in Dubai as well as around UAE.

The Dubai Economic Development (DED) offers several options to renew trade license in Dubai. Also, business setup companies in Dubai offer effective and easy ways to renew business license. However, there are instances when companies still do not renew business license and attract several penalties.

While there are a large number of issues that could be raised because of non-renewal of a business license, the major three are as follows:

Monetary Penalties

Economic Development in Dubai is an authority that monitors the process of licensing a company. The authority has made hi-tech implications such as online and SMS renewal system due to which businessmen can renew trade license in Dubai, within no time. However, at times when businessmen do not renew their license they are imposed with several forfeits such as – a business practiced without a license could be penalized with AED 5000, while failure to renew a license within the specified time-limit could cost AED 250, also an additional office for an existing license without permission fines the entity with AED 2000 (fines are noted as per the DED website)

Black Listing of Company

When companies continue their business activity without renewing trade license, there is a fair possibility that the company could be blacklisted. Blacklisting of a company would stop all the transactional activates the company is dealing with; nullify the visas and sponsors under the company and there is also a possibility that the investor or the businessman would have to leave the country.

Restrict Expansion of Business

Even a small business license renewal is taken place year on year, occasionally businessmen lose a track of when the license had to be renewed and a month’s delay could be worse because these small businesses in future are not allowed to expand under these circumstances. It is extensively important for businesses to have a clean record if there are plans for expansion or rather suspend or liquidate the entity.

Renew trade license in UAE instantaneously at Shuraa Business Setup. With us, you can keep a track of your renewal dates, get the documentation done for your business trade license renewal process as well as get your business license renewed in Dubai or any other part of UAE, within no time!

Shuraa Business Setup guides you through your business related formalities, company formations services and more. For more information, visit our business centers, call us or drop in a quick inquiry and we will get back to you with the needful.

Showing 25 Comments
  • Wonderful information, thanks a lot for sharing kind of information. Your website gives the best and the most interesting information. Thanks a ton once again, Regards,

  • Thank you for the sharing good knowledge and information it’s very helpful and understanding. As we are looking for this information since long time. Regards

  • Gladys says : Reply

    Please advise the penalty of an expired license (non operation). If we want to close it what would be the process and what are the possible financial involvement.

    • Dear Gladys, Thank you for inquiring with Shuraa. The penalty charges for a regular company under a mainland business setup is 200 AED per month, however, if you have been non-operational for more than 12 months, this could further cost you the license renewal cost inclusive of the penalty. Further, the process of closure depends on the company's shareholding structure and the region or zone where the company was established. To guide you better, we request you to book a free appointment with us or just send us a quick inquiry with your contact details and we can sort the renewal or liquidation of your company at the best price.

  • I am working under main branch license..but we have branch 1 also ..This branch 1 license is expired ..We didn't close it whether problem will come to main branch employee when their visa getting renewal time??

    • Dear Mr. Karunanithi, Thank you for enquiring with Shuraa Business Setup. There will be no problem with visa renewal, however, due to the nonrenewal of the trade license, the fine amount will keep accumulating. It is best to either pay the amount or find an alternative for closure. For any further inquiries, please feel free to contact Shuraa Business Setup. 971 50 7775554 or email us at

  • Dear sir,. I am employee of that renewal will be on next month. Branch 1 license expied on June month they ll block visa renewal and new visas for whole branch 1,branch 2,branch 3,even main branch as everything is name sponsor name..

    • Dear Mr. Karunanithi, there is a possibility that the local body would ask you to first renew the license. To keep things simple, we would suggest to go ahead with the trade license renewal process and then add the visa for renewal as well. To renew your trade license or any procedures talk to our representative at 971507775554.

  • Dear Sir, Our company licence has expires two months ago the they will not going to renew because very slow the business running. So the company looking for to close their Bank A/C, Etisalat A/C with domain as well, please advice what would we do to cancel these accounts without renewing license.

    • Dear Mr. Abdul Kader, Thank you for enquiring with Shuraa Business Setup. If your license is expired and you are further not willing to continue the business, then you can liquidate the company. You do not need to renew the license and can directly close the company bank accounts, Etisalat accounts, etc. For any more details on Company Liquidation and the various documents required to cancel the company contact Shuraa Business Setup - Call us now on 044081900.

  • Superb article and I would really like to thank for your article it’s really helpful. Regards Professional Cleaning Company in Dubai

  • Hassan says : Reply

    Companies which have expired license will be subject to the vat registration failure penalty? Or they can register once they renew the license?

    • Hello Mr. Hassan. As per the guidelines provided by the authorities you will have to register for VAT irrespective of the expiration of the business license. Also, delay in VAT registration would have a penalty. As the governing bodies of the business licensing is under the Economic Department; while the VAT registration is under the Ministry of Finance - the proceedings are separate and you need to abide as long as you have a company in the UAE. We would advise you to register you VAT at the earliest to save yourself from the penalty as well as renew your business license. You may also freeze or liquidate the company. For more information or to learn about better options contact us +971-44081900 or 050 7775554.

  • Alex says : Reply

    Hi~My company's license is about to expire and I might consider to freeze the license for 2 or 3 years. I'm wondering to know will my working visa will be cancelled if I freeze the company? If not freeze, and let the license not renewed for maybe one year or more, What consequence it might caused? I know it will occur 250 fine every months? How long the DED will allow a company not to renew? Thanks. Looking forward to having your advice.

    • Thanks for enquiring with Shuraa, Mr. Alex. If you are considering to freeze your company you can do it for a maximum period of 3 years and you will have to apply for the same. However, freezing of the company will lead to cancellation of all the visas under the company. Whereas, if you decide not to freeze the company as well as not to renew your license you will have a subsequent fine decided by the economic department moreover if your company is under a sponsorship the sponsor could file an absconding case against you as well. For the best interest and goodwill of your's and your company's, you may renew the license or either liquidate the company. If you still have doubts feel free to contact us +971-44081900 or 050 7775554 or walk-in for a free consultation.

  • Baptist says : Reply

    My license renewal has been delayed due to some circumstances. When I try to register for VAT, the license page does not allow me to enter my pre dated license expiry date. How can I register for VAT?

    • Mr. Baptist thank you for enquiring, even though licensing and VAT are governed by different authorities they are interlinked. Thus, you will have to renew your license in order to enter a valid date only after which VAT registration is possible. For more information on UAE business licenses or VAT registration feel free to get in touch with us on +971 4 4081900 or +971 4 3510077.

  • Sundar says : Reply

    Hi. What is the process for closing a Dubai Freezone LLC company having the owner as the only person in the company and do not have any inventory or assets. Still an official auditor and liquidator has to be appointed to do this process? What is the normal duration for this closing process? Thanks in advance.

    • Hello Mr. Sundar. To close a mainland company in Dubai you need to contact the DED, but as your company is a Dubai Freezone LLC you will first have to contact the concerned free zone authority. The process to liquidate a company differs from freezone to freezone and the authorities could guide you through it, however, you will need a liquidator for the same. For a Dubai Freezone LLC, it will take around 2 to 3 months for the closure along with permissions letters and documentation from the pertinent authorities. To ascertain the cost of liquidation, the required documentation and the entire process for closure of the company contact Shuraa Business Setup. Call us on +971 4 4081900 or drop in a quick inquiry and we will get back to you.

    • Sundar says : Reply

      Thank you for your prompt response. I will check with the free zone authorities and get back to you. Regards.

  • John says : Reply

    I'm a LLC partner and I'm on partner visa. My visa has recently been renewed for another 3 years. My company's license will expire in 2 months time and the partners don't want to renew it due to financial problems. What will happen to my visa and my future travel in and out of UAE after the license expiry? What are the consequences of non-renewal of LLC license? How this is going to affect the local Emirati sponsor and the other companies under his partnership?

    • Thank you for your inquiry, Mr. John, it would be advisable to either renew or cancel your business license to save yourself from penalties. The Economic Department provides a one-month grace period after your due date to imply the same, however, if you do not renew or liquidate your license every month 200 AED (as per current fines) will be penalized and charged during the renewal. In terms of your visa, if you do not renew or liquidate your company your visa will remain valid for three years, however, if you decide to liquidate the company you will first have to cancel your visa from the immigration department to complete the liquidation. The Emirati Sponsor will not be affected in this matter (as per current legislative). If you have any further queries or are willing to find a way through this contact, Shuraa Business Setup call us now on +97143510077

  • Grace says : Reply

    I would like to know if my visa issued during March 2017 and is valid until March 2019 will be affected if the LLC license that employed me has not been renewed since April 2017. Furthermore will I be able to travel in and out of the UAE without being affected adversely ? Please advise as I am concerned that my visa is no longer valid ?

    • As per your inquiry, your visa will be valid until March 2019, whether the Business License is renewed or not. On the other hand, if the company has canceled their license, then there is a possibility of the visa being fortified. To be sure, you may check your Visa status at the Immigration Department. Nevertheless, it is always best to renew the license on time.

Leave a Comment