Transferring a business license in Dubai is a crucial process for entrepreneurs looking to change ownership, restructure their company, or move to a different jurisdiction. This comprehensive guide will walk you through the essential steps, requirements, and considerations for transferring your Dubai business license.
Understanding Business License Transfer in Dubai
Transferring a business license in Dubai involves changing the ownership or legal structure of an existing company while maintaining its operational continuity. This process is regulated by the Department of Economic Development (DED) in Dubai and requires careful adherence to local laws and regulations.
How do I transfer a business license in Dubai?
To transfer a business license in Dubai, you must follow a specific procedure outlined by the DED. This process typically involves submitting an application, providing necessary documentation, and obtaining approvals from relevant authorities. The exact steps may vary depending on the type of license, business activity, and the nature of the transfer.
What documents are required to transfer a business license?
The documents required for transferring a business license in Dubai typically include:
- Original trade license
- Passport copies of all partners
- Emirates ID copies of all partners
- No Objection Certificate (NOC) from the current sponsor (if applicable)
- Tenancy contract
- Board resolution for the transfer (for corporate shareholders)
- Amended Memorandum of Association (MOA)
- Audited financial statements
- Bank statements
- Clearance certificates from various government departments
It’s essential to consult with the DED or a licensed business setup consultant to ensure you have all the necessary documents for your specific case.
How long does the business license transfer take?
The duration of a business license transfer in Dubai can vary depending on several factors, including the complexity of the transfer, the type of license, and the efficiency of document submission. On average, the process can take anywhere from 2 to 8 weeks. However, some straightforward transfers may be completed in as little as a week, while more complex cases could take several months.
How much does it cost to transfer a business license?
The cost of transferring a business license in Dubai varies based on several factors, including:
- Type of license
- Business activity
- Company structure
- Location (mainland or free zone)
- Government fees
- Legal and consultancy fees
On average, the cost can range from AED 5,000 to AED 15,000 or more. It’s advisable to consult with a business setup expert or the DED for a more accurate estimate based on your specific circumstances.
Do I need a local sponsor for license transfer?
The requirement for a local sponsor depends on the type of business license and the company structure. For mainland companies, a local sponsor (Emirati partner) is generally required, holding at least 51% of the company shares. However, there are exceptions for certain business activities and structures.
Free zone companies typically do not require a local sponsor, allowing 100% foreign ownership. It’s essential to verify the specific requirements for your business type and location with the relevant authorities or a business setup consultant.
Steps for Transferring a Business License in Dubai
The process of transferring a business license in Dubai involves several steps:
- Obtain initial approval: Apply for initial approval from the DED or relevant free zone authority.
- Prepare required documents: Gather all necessary documents, including those mentioned earlier.
- Amend company documents: Update the Memorandum of Association and other relevant company documents.
- Obtain external approvals: Secure approvals from external departments if required for your business activity.
- Pay fees: Clear all outstanding fees and pay the transfer fees.
- Submit application: File the transfer application with the DED or free zone authority.
- Receive new license: Once approved, collect your new business license.
Can I transfer a business license to a new owner?
Yes, it is possible to transfer a business license to a new owner in Dubai. This process is known as a “share transfer” or “change of ownership.” The procedure involves transferring the shares of the company to the new owner(s) and updating the company’s legal documents accordingly.
The steps for transferring ownership typically include:
- Obtaining approval from all current shareholders
- Conducting due diligence on the company
- Drafting and signing a share purchase agreement
- Amending the Memorandum of Association
- Obtaining necessary approvals from the DED or free zone authority
- Updating the trade license and other relevant documents
It’s crucial to involve legal professionals and business setup experts to ensure a smooth and compliant transfer of ownership.
How do I update business information during transfer?
Updating business information during a license transfer is an essential part of the process. This may include changes to:
- Company name
- Shareholders’ details
- Business activities
- Registered address
- Manager or authorized signatories
To update this information, you’ll need to submit the relevant forms and supporting documents to the DED or free zone authority. The specific requirements may vary depending on the nature of the changes and the licensing authority.
What happens after a business license transfer is complete?
Once the business license transfer is complete, you’ll receive a new trade license reflecting the updated information. You should then:
- Update all company documents and records
- Inform relevant stakeholders (clients, suppliers, banks) of the changes
- Update signage and marketing materials if necessary
- Ensure compliance with any new regulatory requirements
- Review and update internal policies and procedures as needed
It’s important to maintain proper documentation of the transfer process for future reference and compliance purposes.
What services assist with business license transfer?
Several services can assist with business license transfer in Dubai:
- Business setup consultants
- Legal firms specializing in corporate matters
- PRO (Public Relations Officer) services
- Accounting and auditing firms
- Government liaison officers
Multicorp Dubai offers comprehensive assistance for business license transfers, providing expert guidance throughout the process and ensuring compliance with all legal requirements.
Can I transfer my business license to a free zone?
Transferring a business license from mainland Dubai to a free zone is possible but involves a complex process. It’s essentially like setting up a new company in the free zone and then transferring the assets and operations from the mainland company.
The process typically involves:
- Incorporating a new company in the chosen free zone
- Obtaining necessary approvals and licenses for the free zone company
- Transferring assets and operations from the mainland company
- Closing down or liquidating the mainland company
It’s crucial to seek professional advice when considering such a transfer, as it has significant legal and financial implications.
What restrictions apply during the transfer process?
During the business license transfer process, certain restrictions may apply:
- The company may be unable to conduct certain transactions or changes
- New visas may not be issued until the transfer is complete
- Certain government services may be temporarily unavailable
- The company may need to maintain its current business activities
- Changes to the company structure may be limited
It’s important to consult with the DED or your business setup consultant to understand any specific restrictions that may apply to your case.
Read More:
26. Documents Required for Company Formation in Dubai
27. Company Setup for Non-Residents in Dubai
28. Setting Up a Business for Foreign Investors in Dubai
29. Time to Set Up a Company in Dubai
30. Company Registration in Dubai for Expats
FAQs
How do I transfer a company’s ownership with a license?
Transferring a company’s ownership along with the license involves:
- Obtaining agreement from all current shareholders
- Conducting due diligence on the company
- Drafting and signing a share purchase agreement
- Amending the Memorandum of Association
- Obtaining approvals from relevant authorities
- Updating the trade license and other company documents
The process must comply with UAE Federal Law No. 2 of 2015 on Commercial Companies and any relevant local regulations.
Can I transfer a business license to another emirate?
Transferring a business license to another emirate is possible but complex. It typically involves:
- Closing the existing company in the current emirate
- Setting up a new company in the desired emirate
- Transferring assets and operations to the new company
Each emirate has its own regulations and procedures, so it’s crucial to consult with legal experts and business setup consultants familiar with both emirates’ requirements.
What happens if my business license transfer is delayed?
If your business license transfer is delayed:
- Your current license may expire, potentially leading to fines
- Business operations may be disrupted
- You may face difficulties in renewing visas or conducting certain transactions
To mitigate these risks, ensure all documents are prepared correctly and submitted on time. Consider seeking professional assistance to expedite the process.
Do I need to change my trade name during transfer?
Changing your trade name during a license transfer is not mandatory unless required by specific circumstances, such as:
- The new owners want a different name
- The current name conflicts with existing trademarks
- The name no longer reflects the business activities
If you decide to change the trade name, you’ll need to follow the DED’s name reservation and approval process.
What are the tax implications of a business license transfer?
The tax implications of a business license transfer in Dubai can include:
- Value Added Tax (VAT) considerations on asset transfers
- Corporate tax implications for both the seller and buyer
- Potential stamp duty or transfer taxes
It’s crucial to consult with a tax expert familiar with UAE tax laws, including Federal Decree-Law No. 7 of 2017 on Excise Tax and Federal Decree-Law No. 8 of 2017 on Value Added Tax, to understand the specific tax implications for your transfer.
In conclusion, transferring a business license in Dubai is a complex process that requires careful planning and execution. By understanding the requirements, following the correct procedures, and seeking professional assistance when needed, you can ensure a smooth and compliant transfer of your business license.