Closing a Company in the UAE: Liquidation, Licence Cancellation and Tax Deregistration

Introduction

The steps to close a UAE company properly, from the resolution and liquidator to staff visas, licence cancellation, and Corporate Tax and VAT deregistration.

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Wooden sign reading CLOSED hanging on a rope behind a glass door, with blurred lights beyond

Last reviewed 17 October 2026 · 10 min read

In short

Closing a UAE company means cancelling it formally: letting the trade licence expire does not close it. The usual order is a shareholder or board resolution, a liquidator where the company's legal form requires one, settling debts and staff dues, cancelling work permits and visas, and then the licence cancellation or liquidation application to the licensing authority. A company must apply to deregister from Corporate Tax within 3 months of ceasing business, dissolution or liquidation, and the Federal Tax Authority (FTA) deregisters it only once every return is filed and all tax and penalties are paid. A VAT registrant files its final return and pays within 28 days of its deregistration date.

Does letting a trade licence expire close the company?

No. The UAE Government portal says that, whatever type of business you own, you must cancel the business licence and all related permits once you decide to close it. That way the government entities know you are no longer trading, and you avoid fines and penalties for not renewing the licence.

A lapsed licence does not end the company's tax registrations either. The company stays registered for Corporate Tax, and for VAT if it is registered, until the FTA deregisters it, and a late deregistration application is penalised for each tax. In Dubai, cancelling a company whose licence expired more than two years earlier has its own procedure, which includes an undertaking by the local partner to be liable for the company's debts and a liquidation announcement in Arabic newspapers.

What are the steps, and in what order?

The details depend on the emirate, the licensing authority and the company's legal form, so ask the authority for its current checklist before you start. The published procedures share the same main steps:

  • A decision to close: a shareholder resolution or, for a branch, a decision of the parent company's board. For a Dubai mainland commercial company, this means notarised minutes of the general assembly confirming the liquidation and naming the liquidator.
  • A liquidator, where the law requires one. The UAE Government portal says that for companies the licence cancellation application is submitted by the liquidator, while establishments and branches apply themselves. In Dubai, the liquidator's acceptance letter comes with a copy of its licence and its auditor registration certificate.
  • Creditors and assets: in Dubai, the liquidation is announced in two local Arabic newspapers for one day, allowing 45 days for claims, after which the liquidator and partners declare that no objections were received. Debts are settled and the remaining assets and liabilities dealt with.
  • Staff: under the UAE Labour Law, employers must pay private sector employees all outstanding wages, other entitlements and gratuity within 14 days of the end of the contract. On the mainland, work permits are cancelled through the Ministry of Human Resources and Emiratisation (MOHRE).
  • Visas: residence visas are cancelled with the immigration authority. In Dubai, as of October 2026, the GDRFA asks for the MOHRE work permit cancellation for private sector employees, charges AED 100 plus an AED 10 Knowledge Dirham and an AED 10 Innovation Dirham, and allows a 60-day grace period to stay in the country after cancellation.
  • Tax: Corporate Tax and VAT deregistration with the FTA, covered below.
  • Licence: the cancellation or liquidation application, with the clearances the authority asks for. A free zone authority then issues a final deregistration certificate confirming the company's closure.

Which comes first, the tax deregistration or the licence?

It varies. The UAE Government portal's summary for free zones puts FTA deregistration before the cancellation application. The FTA's VAT deregistration service, on the other hand, asks a business whose licence is cancelled for the licence cancellation certificate, the liquidation letter and the board resolution. The FTA's Corporate Tax deregistration service likewise asks a company that is liquidating or closing for its licence cancellation document and financial statements up to and including the licence cancellation date. Ask both the licensing authority and the FTA what each needs first.

Because the FTA will not deregister a company that still owes tax or penalties, the company needs to be able to pay its final Corporate Tax, VAT and any penalties before its deregistration can be approved.

What applies to mainland companies and foreign branches?

In Dubai, the Dubai Government portal lists the documents for each type of business, and the deregistration application is made at a service centre once they are ready. The Invest in Dubai portal, maintained by Dubai's Department of Economy and Tourism, gives the same document lists and also says the request is made at a service centre. As of October 2026, the UAE Government portal and Invest in Dubai list AED 520 for the certificate of the company's dissolution and liquidator appointment. Invest in Dubai also lists a licence cancellation fee of AED 1,020 and a company dissolution fee of AED 2,520, so confirm the total with the Department of Economy and Tourism before applying.

In Abu Dhabi, the application goes to the Department of Economic Development with the liquidator's certificate of acceptance, a court decision, the minutes of the meeting on the company's liquidation and the termination of the initial service agent contract. The Abu Dhabi Government's TAMM platform lists 30 working days for cancelling a commercial economic licence.

A branch of a foreign company is also on the Ministry of Economy and Tourism's register of foreign entities. The Ministry's service page says the competent local authority must cancel the licence first; the branch is then removed from the register online, with no fee listed and an average of one working day. The Dubai Government portal lists a Ministry decision among the documents for cancelling a foreign branch's licence, so confirm the order with both authorities.

When must a company deregister from Corporate Tax?

Under Article 52 of the Corporate Tax Law, a company with a Tax Registration Number must apply to deregister when its business ceases, whether by dissolution, liquidation or otherwise. FTA Decision No. 6 of 2023 sets the deadline: within 3 months of the date the company ceases to exist, ceases its business, or is dissolved or liquidated. The application is made in EmaraTax, and the FTA's user manual lists cessation, sale, merger and redomiciliation of the business among the grounds.

The FTA deregisters a company only once it has paid all Corporate Tax and administrative penalties and filed every return due, including the return for the period up to and including the date of cessation. The FTA may ask for a final return, and it will not proceed while another application, such as a change of tax period, is pending. Its service card says a completed application is processed within 40 working days, and that it may take up to a further 40 working days if it asks for more information. Once approved, deregistration takes effect from the date of cessation or another date the FTA decides, and a deregistration certificate is issued in EmaraTax. If a company does not apply, the FTA may deregister it on its own initiative.

A company in a multinational group that is subject to Top-up Tax must also apply to deregister for Top-up Tax within 6 months of the date it ceases to exist, under FTA Decision No. 12 of 2026, and it cannot be deregistered until it has paid all Top-up Tax and penalties and filed all the returns due.

As of October 2026, the main penalties under Cabinet Decision No. 75 of 2023, as amended, are:

  • late deregistration application: AED 1,000, applied again on the same date each month, up to AED 10,000
  • late tax return: AED 500 for each month or part of a month for the first 12 months, then AED 1,000 a month
  • failure to keep the required records: AED 10,000, or AED 20,000 for a repeat within 24 months

How does VAT deregistration work?

A VAT registrant must apply to deregister if it stops making taxable supplies, as a closing company does. The application is made in EmaraTax and is free.

The FTA's VAT Deregistration service page, last updated on 24 September 2026, says that where deregistration is mandatory the application must be submitted within 30 business days of the date the obligation arose. The VAT Executive Regulation, in the consolidated text the FTA published in September 2026, still says 20 business days, so applying within 20 business days meets both. A late application costs AED 1,000, applied again each month up to AED 10,000, under Cabinet Decision No. 40 of 2017 as amended from 14 April 2026.

The FTA estimates that it needs 30 business days from receiving a completed application. Deregistration normally takes effect from the last day of the tax period in which the conditions were met, and the final return and any tax due must be filed and paid within 28 days of that date. Goods and services still held as business assets are treated as supplied immediately before deregistration, so the VAT on them goes in the final return. The FTA issues the deregistration certificate in EmaraTax only once the final return is approved and all tax and penalties are paid.

Which records must be kept after closure?

Closing a company does not close its tax history. VAT deregistration does not remove the FTA's right to claim any tax or penalties due, or the obligations that applied while the business was registered.

For Corporate Tax, records and documents that support a tax return must be kept for 7 years after the end of the tax period they relate to, and that includes the final period. For the final period, those 7 years run on well after the company is dissolved, so someone needs to keep the records until they end.

How are free zone, ADGM and DIFC companies closed?

A free zone company is closed through the relevant free zone authority, broadly following the steps above. To close a branch of a free zone company, the UAE Government portal and the Dubai Government portal ask for the branch to be deleted from the Ministry of Economy and Tourism's register or, where the company is not registered with the Ministry, an attested decision of the parent company to cancel the branch.

An ADGM limited company can be struck off or liquidated. Before applying for strike off, it must close down properly, for example by treating employees according to the relevant requirements, cancelling or transferring visas and its establishment card, ending its office lease and dealing with its assets and liabilities. It cannot apply if, in the previous 3 months, it changed its name, traded or disposed of property or rights, or if it has unfinished court proceedings or is in administration, liquidation or receivership. There is no fee. ADGM publishes a public notice for 3 months, or for 2 months under the streamlined route for small companies (turnover of no more than USD 13.5 million and no more than 35 employees) that do not carry on regulated financial services. If no one objects, the company is struck off at the end of the notice period.

In the DIFC, only an insolvency practitioner registered with the DIFC Registrar of Companies may be appointed as a company's liquidator, under the DIFC Insolvency Law, DIFC Law No. 1 of 2019.

Frequently asked questions

Can I just let my trade licence expire instead of closing the company?

No. The UAE Government portal says a business must cancel its licence and permits when it closes, to avoid fines for not renewing. The company also stays registered for Corporate Tax, and for VAT if registered, until the FTA deregisters it, and late deregistration costs AED 1,000 a month, up to AED 10,000, for each tax.

What is the deadline for Corporate Tax deregistration?

Within 3 months of the date the company ceases to exist, ceases its business, or is dissolved or liquidated, under FTA Decision No. 6 of 2023. The FTA deregisters it only once every return, including the final one, is filed and all tax and penalties are paid.

How long does closing a company take?

It depends on the authority and the route. In Dubai, the liquidation announcement allows 45 days for claims, and in Abu Dhabi, TAMM lists 30 working days for cancelling a commercial licence. The FTA estimates 30 business days to complete a VAT deregistration application and says it processes a completed Corporate Tax deregistration application within 40 working days. An ADGM strike-off notice runs for 2 or 3 months.

Do staff visas have to be cancelled before the licence?

In the Dubai, free zone and ADGM procedures covered in this guide, yes. The Dubai Government portal says other cancellations with local and federal government entities must be completed before a trade licence is cancelled, and it requires work permits to be cancelled through MOHRE for every type of business it lists. GDRFA Dubai asks for that MOHRE cancellation before it cancels a private sector employee's residence permit. ADGM asks companies to cancel or transfer employee visas before applying for strike off, and the UAE Government portal's free zone summary also puts visa cancellation before the cancellation application. In Abu Dhabi, ask the Department of Economic Development.

How Indigo Group can help

Indigo Group's Corporate Services team can help you plan a company's exit and coordinate the steps, working alongside a registered liquidator, auditor and tax agent where one is needed. For the tax rules while a company is trading, see our Corporate Tax guide and VAT guide. Indigo Group's regulated entity, Indigo Financial Analysis and Consultancy LLC, is licensed by the UAE Capital Market Authority (CMA), licence no. 706042.

Read more about our corporate services for setting up, restructuring and closing UAE companies and our accounting and audit services in Dubai.

To talk this through, book a consultation or message us on WhatsApp.

Written by

Alexander Hutton

CEO

Alex Hutton is the CEO of Indigo Group, where he oversees the company's strategic direction and global operations.

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Last reviewed 17 October 2026. This article is for general information only and does not constitute financial, legal or tax advice. Rules change, so please speak to a qualified adviser about your circumstances.

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