Can I change or add business activities after my company is formed?

Business possibilities change rapidly. Inventions, changes in geopolitical scenarios, social scenarios, and lifestyle improvements affect the business world. The conditions create increased opportunities in some sectors and a decrease in others.

The reasons for change/addition of business activities include:

Business Expansion – Companies diversify their business operations and expand by investment in new sectors. Businesses can leverage their credible trade name, instead of setting up a new firm. The inclusion of business activities under the same license is required in such a situation.

Low-performing Sectors – Demand for some products or services might go down with time. For example, photostat shops were a common thing until about a decade ago. With machines available at home, people rarely go to the shop for copies. A low-performing business must be removed. A new business sector can be introduced, and the budget for the obsolete business can be adjusted and rerouted for the new one.

Competition Requirements – The business should offer high-demand services and products to remain in competition.

Regulatory Compliance – The DET or the Freezone Authority may direct the removal of outdated or unapproved business activities. Removal/replacement of business activity has to be pursued accordingly.

Mandatory approvals are required to add/change regulated business activities. The documents submitted for business activity amendment should include the additional approval for such activities. Get guidance or support from a specialised business setup agent to avoid confusion and delays in the inclusion/deletion of the business activity.

A few of the business activities that require external approvals are:

• The medical, healthcare services, medical equipment, and systems sector is monitored and regulated by the Ministry of Health and the Dubai Health Authority. Necessary approvals must be obtained before approaching the DET or relevant Freezone Authority to add or change the business activity.
• Food trading, processing, and food products manufacturing businesses must obtain additional approval from FIDI or the Ministry of Health and Prevention (MOHAP).
• Get clearance and approval from the Dubai Police or the Ministry of Interior if you are adding security services to your business activity.
• The education and training sector requires external approval from the Knowledge and Human Development Authority (KHDA) before processing the business activity amendment.
• Financial services, broking, and consultancy require approval from the DFSA or the Securities and Commodities Authority.

Here is the step-by-step process for adding/amending a business activity under the same trade license. The Department of Economy and Tourism (DET) or the relevant Freezone Authority issues approval for the amendment in the business activity. Some regulated activities necessitate additional approvals from the regulating authority.

The steps to add or change a business activity after company formation in Dubai, UAE, are:

Verification and Confirmation – Each license type has specifications regarding the business activities permitted. The business activity that you plan to add must be allowed under the license type.

Confirm the Requirement of Additional Approval – Activities including medical, education, healthcare, and finance require additional approvals. Initiate the approval process. The approval document is mandatory for amending the business activity in such cases. The DHA, KHDA, MoHRE, and Dubai Municipality are some of the authorities that issue additional approvals depending on the business activity.

Initial Approval – Obtain initial approval from the licensing authority. The DET/relevant Freezone Authority issues the initial approval.

MOA Amendment – The Memorandum of Association also needs to be amended in the case of an LLC.

Amendment Application – Apply for an amendment to the business activities and submit the documents. Pay the amendment fee. The amendment fee will vary with the business activities.

Updated Trade License – The authority will review the business activity change/addition and approve. An updated trade license that reflects the amended business activities will be issued.

The company can start business operations in the new business sector with the amended trade license.

The documents required to add/change a business activity after a company is formed in the UAE are:

• Trade license
• Board resolution approving the business activity amendment (for corporate entities)
• Memorandum of Association (if applicable)
• Passport copies of shareholders
• Emirates ID copies of shareholders
• External approval (if required, depending on the business activity)
• NOC from the sponsor (if applicable)

Although you can manage the business activity amendment process, it is highly beneficial to hire a trusted agency. We used the word “trusted” as there are several unauthorized agencies offering services. The advantages of hiring Kiltons for business activity change/addition in Dubai, UAE include:

• Decades of experience in the business setup sector; our team knows even the minutest regulatory requirements to add/change a business activity in the UAE.
• Keen understanding of the process ensures quick approvals and completion of the amendment process. The company can start business operations in the added sector/activity without any further delay.
• Comprehensive end-to-end support helps in understanding the procedural aspects. This would aid in undertaking the process by yourself if required in the future.
• Errors in the business activity amendment process may lead to unwanted penalties. Avoid paying extra unnecessarily by hiring us.

Inexperience can be a villain while you try to add/change business activity all by yourself. The business regulations, setup process, and amendment procedure are simple and streamlined. However, a lack of experience can cause errors that might delay or lead to fines. You can always change or add business activities after your company is formed. Make sure to avoid the following common mistakes:

• Incomplete documentation is a common issue during the business activity amendment process. Recheck and confirm that all documents are submitted.
• Regulated business activities necessitate additional approvals from the authorities concerned. Get the subject approvals before approaching the DET or Freezone Authority for business activity amendment.
• Some activities have specified regulations. Review the regulations and ensure that all are abided by.
• Never add an unapproved activity. Adding unauthorized activities can result in fines or license cancellation.
• Study and understand the administrative and legal requirements for business activity amendment before commencing the process. It will save both time and money.
• Do not commence the business operations before the business activity amendment is approved. The new/changed business activity must be included in the trade license for you to start business in that specific field.
• Inform the bank regarding the business activity amendment. The copy of the trade license held at the bank will reflect different business activities compared to the new one. This will cause ambiguity during the bank’s periodic KYC process, and the bank may impose restrictions. Hand over a copy of the amended trade license officially to avoid such complications.

Talk to us if you need any help with this.

Do you still have queries regarding the business activity amendment?

No problem. We are here at your service. Kiltons will complete the business activity change on your behalf. To help you start a business in the new sector immediately. Having been a key player supporting entrepreneurs since 1999, we assure you of reliable services.

Contact us right away to discuss changing/adding business activity after company formation in Dubai, UAE.