Closing Company on the Mainland
  • March 02, 2023

Closing Company on the Mainland

UAE has always strived to create a strong business ecosystem that makes it easier for companies to operate and thrive. However, there will be instances when entrepreneurs need to liquidate their business in UAE due to unforeseen events. But despite industry type, closing a company in Dubai mainland involves a few steps and procedures that need to be followed. 

If a company decides to close down a business on the mainland, it's essential to notify government entities that the company is no longer functioning to avoid late penalties or fines. There are many procedures, documents, attestations, and government authority approvals to close down a company. 


Cancelling a Business Licence

The process of cancelling the business licence is as follows, 

- Apply for cancellation of licence through DET 

- Get all clearance from the Ministry of Human Resources and Emiratisation (MoHRE), Directorate of Residency and Foreigners Affairs, Dubai Water and Electricity Authority (DEWA), etc. 

Closing a sole proprietorship and branch company is straightforward. In contrast, a company with shares (such as General Partnership, Limited Liability Company (LLC), Public and Private Stock Company, or Simple Limited Partnership) involves liquidating shares, debt collection, and creditors payments before finalising with Dubai Economy and Tourism (DET). 


Steps to closing a company:

Step 1 Appoint a liquidator in Dubai

- Prepare notarised the Shareholder's meeting minutes to confirm the company liquidation. Also, do not forget to include the notice of appointment of a liquidator.

- Prepare a letter issued by the liquidator accepting to liquidate of the company along with the liquidator's credentials (Business licence copy, auditor's registration certificate, a notarised signature)

- Fill in the Registration and Licensing Application form and submit the above documents through the approved channels.

- A legal advisor in DET will review the documents and approve the company dissolution documents and liquidator's appointment

- A payment voucher will be issued for company dissolution and liquidator appointments. The company receives company dissolution documents after the payment of the fees.

- Publish a notice of liquidation in two Arabic Local Newspapers for one day. The notice must give 45 days to the public to submit any claims or complaints.


Step 2 Remove a Company from the Register in Dubai

- Prepare the company's final report and a declaration letter indicating no objections from the liquidator and the partners within the 45 days following the announcement of dissolution.

- Cancel the established card at the Ministry of Human Resource and Emiratisation.

- Cancel the visas sponsored by the company.

- Collect business activity-specific approvals (if required)

- Obtain the Ministry of Economy's decision to cancel the company's licence (for private shareholding companies)

- Obtain the Securities and Commodities Authority's decision to cancel the company's licence (for public shareholding companies)

- Submit all the above documents along with Phase-1 documents through approved channels and get the approval of the legal advisor.

- After submission, the company must pay the deregistration fees. Upon receipt of payment, the company will receive a certificate of deregistration.


Points to note while closing a business

1. Upon closing a business in the UAE, the company must inform the government authorities about closing the firm to avoid any accumulated fines and penalties on the current licence. Trade licence renewal is required annually, and failure to do so will result in penalties.

2. Ideally, enterprises should notify the authorities three months in advance for offices or warehouses and six months in advance for plots.

3. The employee must always revoke the visas and work permits. Before ending a contract, the parties involved must offer the employees a two-month paid notice period.

4. The appropriate government agencies are informed of Residency and Foreign Affairs. Fill up the necessary paperwork and submit a request for cancellation through DET or another authorised channel. 

5. The company should cancel other agreements with relevant state and local governments. 

The company must obtain all clearances, notify the government authorities, and get the final Licence Cancellation Certificate to avoid future legal obligations. 


How can Ascent Partners help?

Ascent Partners is a boutique consultancy providing bespoke, end-to-end corporate services ranging from company formation to accounting, bookkeeping, and compliance services for entrepreneurs looking to set up their next venture in the UAE. We work alongside to strategise, startup, and scale businesses in the UAE and the broader region.


With a combined experience of 50+ years, our expert consultants provide reliable and unparalleled guidance throughout all strategic phases of a business' evolution.