What Does Changing Business Activities Mean in the UAE?
Your UAE trading license defines the Business Activities in UAE operations in which your company is entitled to participate. In case you wish to start another activity other than those covered by your current license, then an activity amendment may be required.
For instance, a firm offering IT consultancy services may wish to undertake the activities of software development or digital marketing. Whether or not the additional activities can be added to the existing license will depend on several factors.
A UAE trade license activity change can involve:
- Adding a new business activity
- Removing an existing activity
- Replacing one activity with another
- Modifying the scope of approved activities
The exact procedure depends on whether the company is registered on the mainland or in a free zone.
Why Do Businesses Need to Change Their Licensed Activities?
Business requirements can vary with the development of a firm. The entrepreneur may find out new revenue channels or be willing to go into some other services.
It is possible to update the license to make sure the firm performs according to its business scope.
Common reasons include:
- Expanding into new products or services
- Adding complementary business activities
- Changing the company’s business model
- Removing activities that are no longer required
- Entering a new market segment
- Responding to changing customer demand
However, before making any modification to the current state of affairs, organizations must ascertain that the suggested action is allowed by the prevailing organizational structure.
How to Add a Business Activity to a UAE Trade License
Application procedure for a UAE trade license that involves adding business activity depends on the concerned authorities. There are a few important steps that are involved in the process.
1. Identify the New Business Activity
Secondly, ascertain the precise activity you would like to engage in. Business activities classifications are important due to the fact that the licensing body will have certain classifications of activities.
Do not select an activity depending solely on the general description of the activity.
2. Check Activity Eligibility
Not every activity can automatically be added to every license.
The licensing authority may consider factors such as:
- Company legal structure
- Existing licensed activities
- Mainland or free zone registration
- Regulatory requirements
- Required external approvals
- Office or facility requirements
Some regulated activities may require approval from another government entity before they can be added.
3. Obtain Required Approvals
Some activities will need further approval from the concerned authorities.
For instance, the regulated industries can have more requirements than the general procedure of amending the license. The requirements will depend on the nature of the activity. Businesses should be aware of such requirements prior to filing for the amendment.
4. Submit the License Amendment Application
After confirming the activity and approvals required, the business can proceed to apply for the license to the appropriate licensing authority.
Based on where the licensing authority is located, the business may submit the application via the online portal or via the licensing authority’s service center.
5. Pay the Applicable Fees
There may be a fee for adding, deleting, or amending activities. The charge will depend on the licensing authority, activity, and the nature of the amendment.
Companies must consult the current fees schedule before anything else.
6. Receive the Updated License
When the application is processed, the relevant criteria are fulfilled, the business can have its trade license updated to indicate its new activities.
The company needs to make sure that its real activities correspond with those on its updated license.
UAE Trade License Amendment: What Can Affect the Process?
Amendment of trade license in the UAE will not be exactly the same for all companies. Many things could affect this process.
Mainland vs Free Zone
Firms operating in mainland areas will have to liaise with the appropriate emirate economic/ licensing authority, while free zone firms will need to go through the processes of the corresponding free zone authorities.
This is why businesses need to confirm the requirements in their particular jurisdiction.
Nature of the Activity
Simple business activity or profession may have its own requirements as compared to regulated activity.
There may be some business activities that need extra permissions, certifications, or other requirements.
Company Legal Structure
In addition, the nature of the firm can also influence the possibility of undertaking a certain activity and whether amendments are needed to undertake it.
Therefore, firms should ensure that there is compatibility before making an application.
Can You Add Multiple Business Activities to One UAE License?
In some instances, a business can conduct several approved activities under one single company and license. But this does not imply that all combinations of activities are automatically allowed. The licensing body may decide on the compatibility of these activities and whether extra approvals are needed.
Prior to expansion, ensure:
- Whether the activities can be combined
- Whether they fall under the same licensing category
- Whether additional approvals are required
- Whether your company structure permits the activities
- Whether your premises meet applicable requirements
This can help prevent a situation where a business assumes an activity is covered when it is not.
Important Things to Check Before Changing Activities
Before the start of the process of changing business activities in UAE, it is important to study your existing license and business structure.
Check Your Current License
List all activities which are currently on the license. This will help to ascertain whether the intended activity is actually new or included under an existing one.
Confirm Regulatory Requirements
There are some activities which have some other regulatory requirements. Check if there is any other department which requires approval before applying for the amendment.
Consider Your Business Structure
It may be that adding another activity will necessitate more than just doing so. Make sure that what you already have in place is appropriate.
Keep Your Operations Aligned With the License
Ensure that your company conducts its business operations in line with the activities mentioned in your new license once the amendment has been granted.
The risk is that operating in excess of the permitted activities will lead to non-compliance.
When Should You Consider Changing Your Business Activities?
You must consider evaluating your licensed activities when there is substantial change in your firm’s business operations.
Such an evaluation would be appropriate when:
- You are launching a new service
- You are expanding your product range
- You are entering a related business segment
- Your existing activity no longer reflects your operations
- You are restructuring your business model
The pre-planning of the amendment prior to initiating the new activity can help in making the process of expansion much more systematic.
Conclusion
Changing UAE Businesses Licenses for Business Activities It is very useful to know how you can Change UAE Business Activities that your business licenses allow. You may either increase or reduce business activities, but the possibility of doing so depends on the jurisdiction you are registered in, the type of business organization, and the type of the activity.
However, it is vital that you first confirm whether you are allowed to include or exclude the particular business activity before you start doing so.
Frequently Asked Questions
Can I change business activities on an existing UAE trade license?
In some situations, companies are able to either include, delete, or alter activities in an already existing trade license, depending on the conditions of the licensing body and the proposed activity.
How long does a UAE trade license activity change take?
The processing period depends on the licensing agency, activity, approval needed, and completeness of the application process. Simple amendment applications are easier to process compared to regulated activities that need further approval.
Do I need a new company to add another business activity in the UAE?
Not necessarily. Provided that the new business activity can be integrated into your current business structure and licensing framework, it may be possible to include the new activity by amending your existing license.
Are additional approvals required when changing business activities in the UAE?
Some tasks may involve getting permission from appropriate regulatory bodies. The need for such permission depends on the type of task and the jurisdiction in which the company holds its license.
