There can be various situations when the company owner does not renew the registration of his legal entity, and the company becomes abandoned. In this case, the legal entity first gets the “dormant” status and, after a certain time, is strike off from the registry. Our present overview focuses on various situations related to the late renewal of companies, as well as possibilities and procedures for the restoring /reinstatement of the offshore and onshore legal entities in Dubai and other emirates of the UAE.
First of all, it must be noted that it is much easier and cheaper to renew the company in due time. And, if a company is not required, it is strongly recommended to dissolve it in accordance with the applicable procedure.
Here is the list of some most common circumstances when the reinstatement / restoration of a company is necessary:
- The company still has an money on its accounts. It is worth noting that the legal entities must carry out annual renewal, and provide the appropriate documents to the banks where the company has its accounts. If not, after the end of the company’s documents validity period, a bank, (if the company renewal documents are not provided) has all the rights to block the company’s account.
- An offshore or onshore company has its assets either in the UAE or abroad. In case if a company is not renewed, the owner does not have any right to dispose such assets. Consistently, to conduct any actions with the assets, the company must be restored.
- A company has some contracts or any other rights that have been signed on its name; the name is already well known to the business partners or there are other circumstances that make necessary the company to recover.
- The UAE resident visas issued on a name of a legal entity. If the company is not renewed, all the visas issued on its name are considered to be invalid. Besides, in order to extend visas or get new ones, one must first reinstate a company. If an onshore company is just "abandoned", the owner is still liable for all possible company debts.
Restoring of the offshore and onshore companies in the UAE: procedure, costs, time
The process and costs of the recovery / reinstatement of the company, which is struck off the list, depend on the company type (either offshore or onshore) and the place of its registration. For example, if an offshore company is registered in Ras Al Khaimah, you need to pay both the renewal cost and additional fine, and only then a company may be restored. If an offshore company is registered in Dubai in the Jebel Ali FTZ, the owner also has to submit the financial reports.
In the process of restoring an onshore company, registered in one of the UAE free trade zones, it is necessary to pay an annual license fees, a rent (for the premises that have been selected within registration) and fines for late extension. The fines can be quite heavy and, depending on the time of delay of the company renewal, may be as large as a the payment for the annual company renewal.
The allowable period for the company renewal is not limitless in the UAE. During the first year, it is a relatively easy process that requires only the additional expenses to be paid. After the one-year period, the recovery of the companies, which are struck off the registry, becomes much more complicated.
Our office in Dubai registers and administers all the types of the offshore and onshore legal entities in the UAE. On companies, which are under our administrative control, we always send timely letters of the necessity to renew the company’s registration.
If Your company, which has been registered via other agency, has not been renewed in time for some reason, we can help you with its recovery and renewal of the validity period of all related documents.