This page provides information about the process and rules relating to closing a business on the mainland and in a free zone.
No matter of what type of business you own in the UAE, you must cancel your business licence and all related permits associated with it when you have made your decision to close it down. This page provides a summary of the formalities for closing your business and cancelling its licence properly.
Why cancelling the licence is a requirement upon business closure?
It is important for relevant government entities to know that you are no longer in the business so you will avoid any accumulated fines and penalties incurred upon your licence, when it is not renewed upon expiry date.
If you are in a shareholding company, it is important to discharge your liabilities towards creditors and partners and protect your interests and shares.
It is also wise to put your goodwill and business reputation in perspective, if you decide to open a business again.
Formalities for cancelling your business licence
Cancelling the licence depends on the form of your company. For establishments and sole proprietorships, the process is simple because all you need to do is to apply for cancellation through DED and acquire all relevant clearances from:
However, for companies with shares, the process is longer because it requires liquidating the shares, collecting the debts and paying the creditors before finalising with DED.
Companies which require a liquidator
You need to appoint a liquidator if the legal form of your company is one of these:
What are the steps to dissolve all kinds of companies (except civil companies)?
The process involves two stages:
Freezing a trade licence
Freezing a licence is different than terminating a licence completely.
In Dubai, companies may keep their trade licences inactive for three years by paying a certain freezing fee. However, they cannot extend it beyond that specific period.
What specific approvals are needed for cancelling a private shareholding companies?
You should obtain approval of Ministry of Economy.
What specific approval is needed for cancelling public shareholding companies?
You should obtain the Securities and Commodities Authority's decision to cancel a public shareholding company.
What are the steps to close a civil works company?
What are the procedures and documents required to cancel a sole proprietorship licence?
For sole proprietorships, you need a no objection letter from Ministry of Human Resources and Emiratisation, in addition to a residence cancellation proof for non-Gulf nationals.
What are the conditions for freezing a licence?
You need to provide:
Can the dissolution of a company be cancelled before the issuance of the payment voucher?
Yes, upon approval of the Legal Affairs Department in the DED.
What would happen to the branch if a company established in another emirate is dissolved but owns a branch in another emirate?
The branch will be dissolved.
What are the conditions of private liquidation?
According to the website of DMCC, there are three types of closures. They are:
Closing a business entails more than just ceasing operations. In DMCC, you need to apply for closing the business through the member portal. The authorities, duties and responsibilities of the Directors of the company will be terminated as an effect of the submission of the company termination application. The application will be reviewed and processed. This will be followed by an announcement in a local Arabic newspaper. DMCC authorities will then file the final termination of the company and issue termination letters.
In JAFZA, you must notify the authorities three months prior for the office and warehouse facility and 6 months prior for plot facility.
In all cases, you will need to cancel the employees' visas and their work permits. Dubai portal explains that this requires coordination with both Department of Naturalisation and Residency and Ministry of Human Resources and Emiratisation.
As per the UAE's Labour Law, employers are required to give their employees a two-month, paid notice period before terminating their contracts. In many cases, employees can keep their residency visas until the company's trade licence runs out. Then, the company needs to cancel utilities and telecommunication services. Collect an NOC from the utilities providing company for processing the closure.
How to close a company?
You will need to notify the free zone authority in advance as per their requirement. The intention for closing the company shall be published in an Arabic newspaper. You will need NOC from utility providing companies and other applicable government/free zone departments. Once all the paperwork is cleared, you need to cancel your employees' visas and work permits and close bank accounts. Finally, you should receive an official termination letter from the free zone authority.