How long is the grace period for Dubai companies to overdue for annual review?

In the compliance system of Dubai enterprises, "grace period" is the core concept that has attracted the most attention in the topic of overdue annual review. Many enterprises due to busy business, process convergence and other reasons missed the annual review deadline, at this time the precise grasp of the grace period is directly related to the ability to avoid high fines and business risks.

Grace Period Policy Core Framework

the grace period for the annual review of Dubai companies is usually based on the "registration anniversary", combined with the differentiated regulations of free zones or inland areas to form a multi-level compliance system. According to the 2025 policy update, it is mainly divided into the following two categories:

free zone companies: 15-30 days grace period

most free zones in Dubai (such as DMCC, IFZA, JAFZA, etc.) provide a grace period of 15-30 days for overdue enterprises. For example:

DMCC Free Trade Zone: It is clearly stipulated that the annual review must be completed within 3 months from the registration anniversary, and an additional 15 days grace period is provided. If it is not reviewed within the time limit, the license will be automatically suspended; if it is not processed for more than 6 months, the company will be forced to cancel.

IFZA Free Zone: The deadline for annual review is the anniversary of registration and the grace period is 1 month. A fine of 50-100 dirhams per day after overdue and may affect the use of bank accounts.

JAFZA FTZ: The grace period is 30 days, and the daily fine after overdue is 100 dirhams, and the cumulative fine is capped at 10000 dirhams.

The grace period policy of free zone enterprises is usually linked to the payment of membership fees, physical office verification and other provisions.

2, inland companies: no fixed grace period, but can apply for exemption.

The deadline for the annual review of Dubai Inland Company (governed by DED) is within 6 months after the end of the fiscal year (if the fiscal year ends on December 31, it must be completed by June 30 of the following year). There is no uniform grace period for inland companies, but penalties may be reduced:

first violation penalty halved: The penalty for the first overdue annual review is automatically halved each year.

License freezing mechanism: Enterprises can apply for suspension of license (up to 3 years). During the freezing period, there is no need to renew the license, but they need to pay a fee of about 2000 dirhams/year.

Special exemption application: Due to force majeure (e. g. epidemic, natural disaster) or business difficulties, an exemption application may be submitted to DED, but the probability of approval is low.

Overdue annual consideration

the penalties for late annual reviews are closely related to the length of time overdue and the type of business, as follows:

1, free zone companies: step-by-step fines and mandatory cancellation.

DMCC Free Trade Zone: No fine for 1-15 days overdue; A fine of 250 dirhams for 16-30 days overdue; An additional 250 dirhams per day is added for more than 30 days overdue, with a cumulative ceiling of 10000 dirhams. If the license continues to operate during the expiration period, an additional fine of 5000 dirhams will be imposed.

IFZA Free Zone: A daily fine of dlrs 50 after late payment, with a cumulative ceiling of dlrs 5000. Shareholders/directors will be prohibited from registering a new company in Dubai if the business is canceled directly without paying the fine.

Physical office verification: 30% of free zone enterprises will undergo random on-site inspections. If virtual offices cannot provide usage records, they may be identified as "shell companies" and face higher fines.

2, inland companies: long-term overdue lead to credit crisis.

Penalty accumulation rules: fine of 250 dirhams for 1-30 days overdue; Fine of 500 dirhams for 31-60 days overdue; An additional 250 dirhams per day for more than 60 days overdue, and the license is automatically suspended.

Consequences of mandatory cancellation: If the license is not renewed for 5 consecutive years, the inland company will be automatically canceled and the shareholders/directors will be blacklisted and prohibited from registering new business or renewing other licenses.

Bank account risk: Late annual audits may result in banks freezing accounts, affecting the flow of funds and even triggering contractual default clauses.

How to avoid overdue risk

1. Plan ahead and establish a compliance calendar

time node management: based on the registration anniversary, start the annual review preparation 2-3 months in advance to ensure that the audit report, document update and other key steps are completed before the deadline.

Policy tracking mechanism: pay attention to the official notice of DED and free zone administration, and adjust the operation strategy in time.

2, the use of policy dividends to reduce compliance costs.

Small and Micro Enterprise Tax Exemption Scheme: Enterprises with an annual profit of less than or equal to 375000 dirhams are exempt from corporate tax, but they are required to file a zero tax form in the annual review.

First-time violation relief: Use the "first fine halved" policy to reduce short-term financial pressure.

License freeze option: If the business plans to suspend operations, you can apply for a license freeze to avoid the accumulation of long-term fines.

3, commissioned professional institutions to avoid operational risks.

Full chain service: choose DED authorized agency, can enjoy "registration-account-visa-annual review" one-stop service.

Localization support: give preference to service providers with a local team in Dubai to ensure that documents meet the requirements of Arabic format and avoid rejection due to language or cultural differences.

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