How to Transfer a Trade License within Dubai Mainland?
Transferring a trade license within Dubai Mainland is a process that allows business owners to sell or transfer their existing trade license to another party. This can be done for various reasons, such as the sale of a business or the need for a change in ownership. While the process may seem complicated, following the right steps and procedures can ensure a smooth transfer of the trade license. In this article, we will provide a detailed guide on how to transfer a trade license within Dubai Mainland, explaining the necessary steps, documents required, and key considerations.
Perform Due Diligence:
Before initiating the transfer process, it is essential to conduct thorough due diligence on both the buyer and seller’s eligibility and credibility. This involves verifying the buyer’s financial capability and ensuring there are no legal or financial obligations associated with the trade license, such as pending debts or litigation.
Obtain Approval from the Dubai Department of Economic Development (DED):
To transfer a trade license within Dubai Mainland, the first step is to obtain approval from the Dubai Department of Economic Development (DED). This can be done by submitting an application to the DED, accompanied by the necessary documents. The documents typically required for this step include:
- Application form for transfer of trade license.
- Copy of the buyer’s passport and Emirates ID.
- Copy of the seller’s passport and Emirates ID.
- Copy of a valid tenancy contract.
- Copy of the existing trade license.
- Copy of the Memorandum of Association (MOA) or Local Service Agent (LSA) agreement.
- Clearance certificate from the Ministry of Labour.
- Clearance certificate from the General Directorate of Residency and Foreigners Affairs (GDRFA).
- Good Conduct Certificate from the Dubai Police.
Draft a Sale and Purchase Agreement:
Once the approval from the DED is obtained, the buyer and seller should draft a Sale and Purchase Agreement. This agreement outlines the terms and conditions of the transfer, including the purchase price, payment terms, and any conditions for the transfer. It is highly advisable to seek legal assistance in drafting this agreement to ensure it covers all necessary aspects and protects both parties’ interests.
Obtain No Objection Certificates (NOCs):
Both the buyer and seller need to obtain No Objection Certificates (NOCs) from various government departments in Dubai. These NOCs certify that there are no pending obligations or disputes related to the trade license. The NOCs are typically required from the following authorities:
1. Dubai Electricity and Water Authority (DEWA)
2. Dubai Municipality
3. Federal Tax Authority (FTA)
4. Dubai Chamber of Commerce and Industry
5. Other relevant government departments based on the nature of the business
Transfer of Ownership in the Tenancy Contract:
If the buyer intends to continue operating the business at the existing premises, the ownership of the tenancy contract should also be transferred. This involves notifying the landlord of the transfer and updating the tenancy contract to reflect the new ownership. The tenancy contract should be duly attested by the relevant authorities, such as the Real Estate Regulatory Agency (RERA).
Pay the Transfer Fee:
The transfer of a trade license within Dubai Mainland requires payment of a transfer fee to the DED. The fee is typically calculated based on a percentage of the trade license value and should be paid at the DED offices. The payment receipt should be obtained and kept for record purposes.
Obtain the New Trade License:
Once all the necessary documents, approvals, and fees are submitted, the DED will issue a new trade license in the buyer’s name. This process may take a few days or weeks, depending on the complexity of the transfer and the workload of the DED.
Conclusion:
Transferring a trade license within Dubai Mainland can be a complex process. It requires careful planning and adherence to the relevant regulations. By following the steps mentioned above and ensuring all the necessary documents and approvals are obtained, business owners can successfully transfer their trade license to another party.
However, seeking professional assistance from business consultants or legal advisors experienced in Dubai’s business laws and regulations is highly recommended to ensure a smooth and hassle-free transfer process. BizDaddy is a leading business consultancy firm in Dubai that specializes in trade license transfer services. They have a team of experienced professionals who can help you with every step of the process, from preparing the necessary documents to submitting the application to the authorities.