Abu Dhabi, UAEThursday 21 November 2019

'Can I leave the UAE without cancelling my company's free zone licence?'

The small business owner wants to let the Fujairah free zone licence lapse to cut costs

There are several free zones located in the emirate of Fujairah. Alamy Stock Photo
There are several free zones located in the emirate of Fujairah. Alamy Stock Photo

I have run a small business with a licence through a Fujairah free zone for a few years but I now plan to leave the UAE for good. I know I am supposed to cancel the licence but I am receiving conflicting advice on what has to be done and the cost. Can I just cancel my visa and leave the company licence to lapse as I don’t intend to return? This will save me money. BG, Dubai

There is more than one free zone in Fujairah and each has more than one type of trade licence. BG has not confirmed the exact set up, so advice can only be general in nature. I asked Marianna Bulbuc, the chief executive of Bizzmosis Business Services, a specialist in UAE company formation, for her advice. She said: “As per the UAE commercial companies’ law, it is mandatory for shareholders of any business to execute the company closure procedures and pay all required closure fees to the licence issuing authority. If a license is left to lapse past the expiry date, monthly penalties would be applied in perpetuity and this can lead to a police/criminal case in the name of the shareholders against cumulated debt. Each free zone has individual procedures for company closure; processing period varies between one to three weeks and costs start from Dh2,800 and up to Dh7,000 in free zones from the emirate of Fujairah.”

BG should speak to the relevant free zone about his case. While it can take a little time and there are costs involved, it is advisable to go through the cancellation process properly. The free zone will advise on the exact steps required. Failure to do so will lead to debts and this could cause a problem re-entering the UAE. There are even occasions when transiting through the country could be an issue.

I am Canadian and I'm organising an international driving permit as I intend to come to Dubai for three weeks. Can I drive in Dubai if I have a valid driving licence from Canada and an international driving permit? How much does insurance cost and where I can rent a car? CA, Canada

CA is correct in obtaining an International Drivers Permit as this is a requirement to drive in Dubai along with your home country licence. It is rarely requested by the rental companies but that does not mean it isn’t a legal requirement. Tourists may drive rental vehicles in the UAE with these items but anyone with a residency visa must obtain a UAE licence.

Many car hire companies rent vehicles to tourists and the vehicle insurance will be part of the rental package. A simple online search will return many results and several are located at the airport for ease of collection on arrival. CA should compare prices from different companies and also read the small print on any agreement as they are not all the same. It is important to be aware of liabilities and also the time it takes to return rental deposits after the end of the hire period.

I am on an unlimited contract which has now been terminated by my employer due to cost-cutting measures. I have read that the employer is liable for repatriation expenses such as flights home for the family and the shipping of goods. Is this true? Also, can I break my rental lease early because I have to leave the country after being retrenched? HM, Abu Dhabi

When an employee has been made redundant, the cost of the airfare home is the responsibility of the employer. Article 131 of UAE Labour Law, which applies to mainland companies and is adopted by most free zones, states that, “the employer shall, upon the termination of the contract, bear the expenses of repatriation of the worker to the location from which he is hired, or to any other location agreed upon between the parties". It also says: "Should the worker, upon the termination of the contract, be employed by another employer, the latter shall be liable for the repatriation expenses of the worker upon the end of his service”.

Note that this only refers to the repatriation of the employee himself and whether the flight costs for family members are covered is dependent on the specific terms of employment and is not mandatory.

The terms of a property rental contact are entirely unrelated to employment law and there is no legal provision for contracts, of any nature, in the UAE to provide favourable terms in the event of redundancy. HM will need to check the terms of his rental agreement in respect of leaving the property before the end of the term and negotiate with his landlord directly.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only

Updated: October 19, 2019 10:01 AM

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