Freezing business license in UAE

Lavin Nalinababu, Business Consultancy

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HLB HAMT - Accounting Firm in UAE

Phone:- +971 4 327 7775
Mobile:- +971 55 160 1291
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Email:- dubai@hlbhamt.com

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    The corona virus outbreak has resulted in millions of employees working from home and there are many companies that are forced to cease their business. But the pandemic is not here to stay. Hopefully, the situation will get better in a couple of months and life will be back to normal. Going through the whole process of starting your business again can be hectic. So, what other alternative do you have other than liquidating your company?

    If you are in UAE and you plan to temporarily close your business, then the best option would be to freeze the business license. Business licenses can be frozen for upto a period of three years, by paying a freezing fee. In the case of sole establishments registered in DED, freezing is allowed for a period of one year.

    A company cannot carry on with any of its operations, once the license is frozen. It is illegal. But, the owner of a frozen license or shareholder can start new business in Dubai, by applying for a new license under his name.

    The option to freeze license is a savior for many, as it saves them from accumulated fines when license is not renewed, and liquidation can also be avoided.

    If an owner fails to renew his license on time, he will have to pay a non-renewed license fine. The rate of the fine amount is different for different emirates and free zones. The fine will be applied every month or year.

    The license will be automatically cancelled, if it is not renewed for 5 continuous years.

    There are certain procedures to freeze a license in UAE, apart from paying fees. It includes;

    • Issuing a letter on corporate letterhead requesting to temporarily freeze the license. The letter should contain details on the reasons and justifications behind the decision.
    • Canceling all employment visas
    • Obtaining a confirmation letter from Ministry of Human Resources and Emiratisation mentioning that there are no sponsored people on your license. The letter must also confirm that labor restrictions are not imposed on the license.

    In the case of Dubai Economic Department, the freezing fee of AED 2,000 per year along with AED 210 per each due month since license expiry date must be paid, after submitting the application. A report from the inspection division in DED must also be submitted.

    Once you plan to restart after the completion of the freeze period, the manager or shareholders must submit an application for renewal with a valid lease contract registered in Ejari at the Economic Department.

    Nobody would like to close their company for reasons that could be sorted with time, so when you have the option to temporarily shut down your business and resume it once you are back on track, why not  opt for it.  

     
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    Varun R Chandra
    Varun R Chandra
    07:38 25 Apr 21
    HLB Hamt is highly recommended! They have the quality of services that would satisfy your needs. I'm glad I found them.
    Giuseppe Assi
    Giuseppe Assi
    06:20 31 Jan 21
    I HAD A GOOD EXPERIENCE WITH HLB HAMT DUBAI. THEY HAVE A VERY PROFESSIONAL TEAM, GOOD QUALITY OF SERVICES, GOOD VALUE... FOR PRICE.I RECOMMEND THIS COMPANY.read more
    Mohamed Sheriff
    Mohamed Sheriff
    16:16 28 Jun 20
    Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit practices.read more
    218141 JOSEPH THOMAS
    218141 JOSEPH THOMAS
    16:20 23 Jun 20
    Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any assignments.read more
    PMI
    PMI
    07:14 23 Jun 20
    In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very best.read more
    RAVI CHOKSI
    RAVI CHOKSI
    08:28 21 Jun 20
    Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better business.Thanks.read more
    Maharajan Subramaniam
    Maharajan Subramaniam
    18:17 06 Jun 20
    High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their abilities.read more
    Mohammed L
    Mohammed L
    08:07 05 Jun 20
    We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend them.Cheers.read more
    ROY ROSHAN VIVIAN
    ROY ROSHAN VIVIAN
    06:32 04 Jun 20
    Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them success.read more
    Basil Daniells
    Basil Daniells
    05:55 03 Jun 20
    I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the future.read more
    Amar Kashyap
    Amar Kashyap
    19:28 02 Jun 20
    Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust worthy.read more
    Radz de Jesus
    Radz de Jesus
    16:03 02 Jun 20
    We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly recommended.read more
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