Many employees are working from home due to the prevailing outbreak of Corona Virus and it has also resulted in many companies ceasing their operations. The pandemic, though devastatingly outrageous for the world economy, is going to flatten and later ongoing to decline. In that event, life is going to be back to the normal, so will be the wheel of the economy. It might take a few months but restarting your business after a prolonged halt might prove to be a bit challenging. It will also be quite hectic and time-consuming. There is one alternative of that of closing or liquidating your business, but you should also ponder over the possibilities of other viable options.
In the UAE, you have an option of freezing your business instead of shutting it. It means freezing your business license. A business license can be frozen up to a maximum period of 03 years. All you’ve to do is pay the fee for freezing your company. For sole organization, the freezing period is one year. Once you get your current business frozen after paying the fees, you are not permitted to carry on business as long as your license remains frozen. You can start a new business after making application for a new license. This freezing option is a great relief because it gives some respite to the businesses from running a business that is not picking. The liquidation of the business can well be avoided. If you are an owner and if you fail to renew your business license, you need to pay a fine of non-renewal. The rate for the fine varies from place to place in the various emirates and different free zones. The fines shall be applied monthly or yearly. You license will be cancelled automatically if not renewed during a continuous period of five years. You should also know the procedures of freezing of a license in the UAE. They are:
- A letter is to be made out on company letterhead requesting freezing the license temporarily. This letter should describe the grounds and justifications for your decision to freeze your license.
- There will be a cancellation of employment visas. You should also obtain confirmation and approval from the Ministry of Human Resources and Emiratizationstating there are no persons sponsored on your license. It has also to be mentioned that there is no labor restriction on your license.
- There is a fee peryear of AED 2000 for freezing in case of Dubai Economic Department.
- The report from inspection division of the department should be submitted along with the application.
- After you plan for restarting your business on the completion of the period for which freezing was done, you must apply for the renewal of your business. The application should have a valid lease of contract that is registered in the Economic Department, attached to it.
Nobody wants to close a company without sufficient and pressing reasons. If you have reasons and if you think that it is not viable for you to carry on with your business in the present circumstances, you should take this opportunity to get your business license frozen.
About GCC Filings
It is a firm in the UAE that has accountants and taxation experts. It provides its clients with the services related to the filing of returns of VAT and other taxation liabilities. It also helps businesses in keeping the accounts and records in order so that the external audits carried out by government agencies go on seamlessly and without any fines being levied.