Renewing a Dubai trade licence

A Dubai mainland licence runs for one year. Article 8 of Law No. (13) of 2011 Regulating the Conduct of Economic Activities in the Emirate of Dubai sets the term and then sets the deadline. A business must renew its licence within the last month prior to its expiry. Longer terms are possible. At the request of the business, and subject to approval of the Department of Economic Development in coordination with the competent entity, the same article allows a licence of more than one year and up to four.

The licence does not stand on its own. It sits on top of a tenancy contract registered with the Real Estate Regulatory Agency, and that contract carries its own expiry date and its own fee. A renewal that stalls has usually stalled there. The law governing the licence and the law governing the lease are separate instruments, and neither sets out how the two expiry dates should line up.

The renewal window

Article 8(b) is one sentence.

That is the whole of the published obligation on timing. Article 8 sets no grace period and names no late fee. What it does is make the final month the renewal month, which is narrower than many operators assume. On that reading, a licence expiring on 14 March opens for renewal on 14 February.

The Law leaves the consequences of missing the window to be set elsewhere. Article 29(b) puts the schedule of violations, and the fine attached to each one, in the hands of the Chairman of the Executive Council by resolution. So the number a business is quoted for late renewal does not come from the Law. It comes from that resolution, and from the Department of Economy and Tourism, which issues and renews mainland licences in Dubai.

The lease requirement

Article 17 requires an applicant for a licence to specify the premises in the Emirate through which its economic activities will be conducted. The UAE Government's own guidance is blunter about what that means in Dubai.

The same page lists, among the documents needed to collect a business licence, a copy of the lease contract duly attested by the Real Estate Regulatory Agency in Dubai. It states that all businesses in the UAE must have a physical address to operate, and that the premises must comply with the requirements defined by the emirate's Department of Economic Development and with the land planning regulations of the local municipalities.

There is one carve-out in the Law itself. Article 18 permits the DED to issue licences authorising UAE nationals to conduct certain economic activities, determined by the DED, from home or through business incubators. That article does not extend to non-nationals.

Behind the Ejari requirement sits Article 4 of Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai, in the form substituted by Law No. (33) of 2008 of 1 December 2008. It requires that all lease contracts related to real property governed by that law, and any amendments to them, be registered with RERA. Ejari is the system through which that registration happens.

What Ejari costs

Dubai Land Department publishes the figures for registering or renewing a tenancy contract. The total depends on where the work is done.

At a trustee centre the department gives a service time of 25 minutes, excluding waiting time. The counter wants the original unified tenancy contract and the applicant's Emirates ID, plus an official power of attorney where someone is acting for another party. Through the app, a copy of the unified tenancy contract is enough for individuals and companies. Landlords, tenants, owners, licensed property management companies and holders of a power of attorney can all lodge the registration.

Cancellation is priced separately. Dubai Land Department's published answer is that cancellation is free where the owner or the real estate company does it, and AED 40 at a trustee office. The department gives ten years as the maximum contract period and confirms that a contract can be renewed before it expires.

What is on the renewal bill

Article 28 keeps the licence fees out of the Law. The DED collects the fees prescribed by a resolution of the Chairman of the Executive Council, and that resolution, rather than the Law, is where the figures live. For anyone budgeting, the consequence is that a Dubai licence renewal has no single published price. What a business pays turns on the licensed activity and on the premises it occupies.

Read the payment voucher rather than a summary of it. The UAE Government portal states that a trade licence must be paid for within 30 days of receiving the payment voucher, and that non-payment within that period cancels the application. That rule is published for the licence application. Treat any voucher as time-limited and check the date printed on it.

Fines and the statutory ceiling

Article 29(a) fixes the range. A person who commits a violation of the Law, or of the resolutions issued under it, is punished by a fine of no less than AED 100 and no more than AED 100,000, without prejudice to any stricter penalty stipulated in another law. That is a wide band, and it is deliberately wide. The figure for any particular violation sits in the Chairman's resolution issued under Article 29(b), not in the Law, which is why published summaries of Dubai late-renewal penalties differ from one another and from the amount a business is actually charged.

Enforcement is not abstract. Article 32 gives nominated DED employees law enforcement capacity to record breaches, issue violation reports and call on government entities including the police.

Settling a fine

Article 31 lets the DED conclude an amicable settlement with a business that has been fined. The conditions are numeric.

• The application for settlement is submitted within two months from the date the violation was committed.
• The business pays no less than 50 per cent of the fine prescribed for the violation.
• No similar violation was committed by the business within the one year preceding the violation being settled.
• Any further conditions determined by the DED are met.

Where the business does not implement the conditions of the settlement within the period the DED prescribes, Article 31(b) makes the settlement null and void. Note where the two-month clock starts. It runs from the commission of the violation, not from the day anyone at the company notices it.

What a lapsed licence blocks

Article 6 is the sentence that decides this. A natural or legal person may conduct an economic activity in the Emirate only through a business licensed by the DED. Trading on an expired licence is therefore trading without one, and the Law draws no distinction between a licence that was never issued and a licence that was allowed to run out.

The Law also gives the DED a route to end the licence altogether. Article 30 allows the DED to order closure of a business or revocation of its licence where there has been failure to renew the licence and cessation of the activity, provided a public notice is published in a daily widely circulated local newspaper and no objections are raised within two weeks from the date of publication. The same article covers violations punishable by closure or revocation, and licences issued on the basis of false information or documents.

Revocation does not wipe the slate. Article 30 states that revocation under that paragraph will not prejudice the rights and obligations of a business or its owner towards third parties. Creditors and counterparties keep their claims.

Free zones sit outside this law

Law No. (13) of 2011 defines a business as any company or sole proprietorship licensed to conduct an economic activity in the Emirate, excluding businesses licensed in free zones. A free zone licence is renewed with that free zone authority, on that authority's terms, and the premises arrangement behind it is the free zone's own rather than an Ejari registration. The UAE Government portal lists more than twenty free zones in Dubai, among them Dubai Internet City, Jebel Ali Free Zone, Dubai Airport Free Zone and the Dubai International Financial Centre. It states that a free zone licence application is made online through the respective free zone authority, with a licence issued within 14 working days.

One practical sequence follows from all of this. Renew the Ejari before the licence. The published requirement is a lease contract registered with RERA, and a contract that has already expired is not one.