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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 35 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 https://www.shuraa.com/book-free-appointment/ 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 still..so 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 info@shuraa.com.

  • Dear sir,. I am employee of that company..my renewal will be on next month. Branch 1 license expied on June month itself.so 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.

  • Someone opened a company making a court partnership and made licence on my name with 50% and manager of business and other 2 men of 25% each. I was completely new here and did not know the system and law. They took salon licence and open spa and took all the investment from my pocket. I paid for full setup which cost me around 25000 pounds. I did not take investor visa on this business and after 1 month business started I went to back home abroad. I came back after 1 year and see these people were runing the business here for a year and incurrerd ded fines with are coming to 250 k. They enjoy all the profits and did not give me any profit from business or paid the fines and finally they all disappear. They left the licence as it is and I dont know the current state of licence. They also dis not complete the ladies visa process and kept their passports with them. I have also send complaints from my home country to the police that these people are cheating me and using my name on licence while i am not in UAE but police did nothing. Now I am really worry about it and wanted to know the consequences for me because I also want to start a new business here. I want to know because I am in UAE now what are the consequences and what will happen to me. Thanks for your help in advance.

    • We are sorry to hear about your situation Mr. Farooqui, but as this is a law trial a legal firm can help you best. However, if you would like to start a business, we can help you find an alternative way. Shuraa can also help you partner with the most reliable sponsor and associates offering you complete control and ownership of your business. A business consultant will contact you for the same.

  • John says : Reply

    I am the 100% share holder of my FZE company in Fujairah. I used Creative Zone agency do the business setup and their services are very poor. I want to cancel my trace licence and cancel my company and start a new company without using their service but they are claiming it will cost me 10,000 AED for cancellation fees and I am not able to cancel without their service. I do not want to pay them so much money to simply make a cancellation application. I have no company assets, no shareholders, no company bank account, no office, no employees. Only my visa, which expires in 2020. Can I do the cancellation process myself and avoid the agency's unnecessary cancellations costs.

    • I am sorry to hear about your experience, Mr. John. The best that we can advise you is to do the cancellation process yourself if you really intend to save costs. I understand that you have no assets or liabilities attached to your company. However, to cancel your trade license, the Fujairah Freezone will have their procedural charges that you would have to bear. By doing the cancelation of the company yourself, you can save on the agency costs. Please note that canceling your license will also fortify your visa, which means your visa will not be valid. For liquidation or to start a new business, you may get in touch with Shuraa Business Setup. Please feel free to discuss any other concerns, book yourself a free consultation with our experienced business setup consultants https://www.shuraa.com/book-free-appointment/ or email us your queries on info@shuraa.com

  • Ben says : Reply

    Hi I had a partner visa in RAK Media City FEZ . I am not the manager but I had my partner visa on that company . I left that partnership in 2010 . And had my own business outside UAE . Never visited UAE SINCE 2010. And I happed hear that my visa was not cancelled and also company trade lose Cbe was not renewed . But the Company Signatory Manager is still in Dubai in different visa . What is the steps I need to take on this ? Will my passport blocked for travel ?? And if I approach to take steps in removing my name or cancel the visa will my friend Manager get affected ?? . How can I solve this without any issues to make my trip smooth to UAE ? We had no office , no employee, no assets .

    • Dear Mr. Ben, thanks for inquiring with Shuraa Business Setup. As your company was registered with the RAK Media City, they would be the best to guide with this. Free zone authorities have their own set of rules & all of them defer from each other. Hence, for your business trade license and other obligations, you may contact your partner or the free zone authority. Visa is also subject to the immigration department as it is a matter of over 8 years.

  • malik says : Reply

    hi, my llc trade licence is expired in may 2017, now for cancellation or renewal of to freeze wht i hv to do ? i did nt cm dubai from july 2017, now can i travel to dubai on mypartner visa ? my sponsor says there is wps acc not open fine (1000aed) on my company. but i was new in dubai & my pro not said anything about wps fine, now how & wht i can do ?

    • Dear Mr. Malik, you may liquidate your company by paying all the fines. You may or else renew your trade license by paying the renewal fees for the license and the late payment fine. Traveling on the partner visa depends on the visa validity. If your visa is still valid you may go ahead and travel. For more information, a business setup consultant will get in touch with you on your given email ID.

  • Malik says : Reply

    Ok Whts d charge n process to freeze or renew the license? & wht abt wps fine ?

    • Mr. Malik this completely depends on the type of company you hold and the business activity you are involved in. We can discuss it in detail if you could please provide me your contact number.

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