Close your UAE company once, properly, with every government file shut. PROXPAT runs the visa, labour, establishment card and deregistration work alongside your appointed liquidator and tax agent.
Page last updated: . Requirements, government fees and processing times are set by the relevant UAE authority and can change.
Company Liquidation and Deregistration in the UAE
A UAE company is not closed when the owners stop trading. It is closed when the liquidation is complete, every visa and labour file is cancelled, the VAT and corporate tax registrations are deregistered, and the licence is cancelled and struck from the commercial register. Miss one and fines keep running against a company that no longer operates.
Mainland companies follow Federal Decree-Law No. 32 of 2021 on Commercial Companies. Free zone companies follow their zone's own regulations wherever those contain specific provisions. Tax deregistration follows the Corporate Tax and VAT laws and FTA rules. Figures and rules below come from those sources.
Please note: this page is not legal or tax advice. A liquidator is appointed by the partners, and tax positions should be confirmed by a registered tax agent. PROXPAT handles the government transactions and paperwork around the closure.
A Practical Order for Closing a Company
Step 1: Partners or the general assembly resolve to dissolve the company and appoint a liquidator.
Step 2: Record the dissolution in the commercial register and publish the notice.
Step 3: Notify creditors, giving at least 30 days to submit claims.
Step 4: Cancel employee visas and labour permits while the establishment card is still valid.
Step 5: Collect receivables, settle debts and prepare the final accounts.
Step 6: File final tax returns and apply for VAT and corporate tax deregistration.
Step 7: Distribute remaining assets and approve the final liquidation account.
Step 8: Record completion of the liquidation and cancel the licence.
The order matters. Cancelling the licence before the visas or tax files are closed can leave obligations with no easy way to discharge them.
Dissolution and Appointing a Liquidator
| Article | Rule |
|---|---|
| Article 313 | The dissolution must be recorded in the commercial register and a notice published in two daily local newspapers, at least one in Arabic. It takes effect against third parties from registration |
| Article 314 | The memorandum, articles or a partners' agreement may set the liquidation procedure; otherwise the Decree-Law applies |
| Article 315 | Managers' powers end on dissolution, but they keep managing and act as liquidators towards third parties until a liquidator is appointed |
| Article 316 | One or more liquidators are appointed by the partners or by resolution of the general assembly. The liquidator cannot be the company's current auditor, or anyone who audited its accounts in the previous 5 years |
| Article 317 | Multiple liquidators must act unanimously unless the appointment says otherwise |
| Article 318 | The liquidator registers the appointment and liquidation method in the commercial register, and it does not bind third parties until then. The fee is set in the appointment, or by the court |
What the Liquidator Must Do
- Take an inventory of all assets and liabilities immediately after appointment (Article 320).
- Prepare a detailed list of assets and liabilities and a balance sheet, signed with the managers, and keep a record of every liquidation transaction (Article 321).
- Preserve the company's assets, collect receivables and deposit money into a bank account in the name of the company in liquidation (Article 322).
- Represent the company in court, pay its debts and sell assets. Selling all assets at once needs the partners' or general assembly's permission (Article 323).
- Not start new business, except what is needed to complete earlier activity (Article 327).
Creditors: The 30-Day Notice
| Article | Rule |
|---|---|
| Article 324 | All debts become payable on dissolution. The liquidator notifies creditors by registered letter with acknowledgment of receipt and publishes a notice in two local daily newspapers, one in Arabic, giving at least 30 days to present claims |
| Article 325 | If assets do not cover all debts, debts are paid in part without prejudice to preferred creditors; liquidation costs come first |
| Article 326 | Unclaimed debts, and disputed debts, are deposited with the court treasury unless security is given or distribution is postponed |
Budget for newspaper publication twice, for the dissolution and the creditor notice, and allow the full claim period before any distribution.
Liquidation Period, Reporting and Final Account
| Article | Rule |
|---|---|
| Article 328 | The liquidator completes the work within the period in the appointment. If none is set, a partner can ask the court to set one. Extensions need a partners' resolution or a special resolution after the liquidator reports |
| Article 329 | The liquidator gives partners a temporary account statement every quarter |
| Article 330 | A final account goes to the partners, general assembly or court. Completion is recorded in the commercial register and the company is removed from it |
| Article 333 | After debts, each partner receives their capital contribution, then the balance by profit share. Unclaimed shares go to the court treasury, and losses are shared by the loss ratio |
| Article 334 | Liability claims arising from the liquidator's work are time-barred after 3 years from the entry of completion in the commercial register |
Staff, Visas and the Establishment Card
- Cancel employee visas and labour permits before the company file closes. Each residence cancellation carries its own government fee. See visa cancellation services.
- Employees get a grace period. GDRFA Dubai lists 60 days to remain in the country after a residence permit is cancelled.
- Keep the establishment card valid while cancellations run. ICP charges AED 100 per month once it is more than 30 days late, up to AED 1,000. See establishment card.
- Do not leave a dormant sponsor. ICP lists a fine of AED 20,000 where entry permits are issued for an establishment not conducting business.
VAT Deregistration
| Topic | Position |
|---|---|
| Deadline | Within 20 business days of the date the deregistration obligation arose |
| FTA processing | 20 business days from a complete application |
| Final return | The final tax return must be filed and tax paid within 28 days of the effective date of deregistration |
| Fee | Free; a deregistration certificate is issued on approval |
| Late application | AED 1,000, then on the same date each month, up to AED 10,000 (Cabinet Decision No. 40 of 2017, as amended) |
Corporate Tax Deregistration
| Topic | Position |
|---|---|
| Obligation | A registrant must apply when its business ceases, whether by dissolution, liquidation or otherwise (Article 52, Federal Decree-Law No. 47 of 2022) |
| Deadline | Within three months of cessation (FTA Decision No. 6 of 2023) |
| Condition | All corporate tax and penalties must be paid, and all returns filed, including the return for the period up to the date of cessation |
| Effective date | The date of cessation, or another date the FTA determines; the FTA can also deregister a business itself |
| Documents for a closure | Licence cancellation and financial statements |
| FTA processing | 40 working days; if more information is requested, it must be resubmitted within 60 calendar days or the application may be rejected |
| Late application | AED 1,000, then on the same date each month, up to AED 10,000 (Cabinet Decision No. 75 of 2023, as amended) |
Free Zone Companies
The Commercial Companies Law does not apply to free zone companies on matters their zone's own rules specifically cover (Article 5). Each free zone therefore has its own closure procedure. As an example, the DIEZA Implementing Regulations 2023, used by Dubai Airport Freezone and Dubai Silicon Oasis, provide:
- Winding up by the Registrar, voluntarily, or by the court, with "under liquidation" added to the company's name.
- The Registrar can wind up a company that does not start business within a year of incorporation, or suspends business for more than a year.
- A company can instead ask to suspend its licence for up to 12 months by special resolution.
See DAFZA and Dubai Silicon Oasis.
Mistakes That Keep a Closed Company Alive
- Cancelling the licence before cancelling visas, leaving staff and fines attached to a company that no longer exists on paper.
- Appointing the company's recent auditor as liquidator, which Article 316 does not allow.
- Distributing money to partners before the creditor claim period ends.
- Missing the 20-business-day VAT or three-month corporate tax deregistration deadlines.
- Leaving the establishment card to lapse mid-process, adding fines and blocking cancellations.
- Assuming a dormant company has no tax filings while it is still registered.
How PROXPAT Helps
Closure plan and document checklist
Employee visa and labour permit cancellations
Establishment card upkeep and cancellation
Coordination with your appointed liquidator
Newspaper notice and commercial register filings
VAT and corporate tax deregistration paperwork with your tax agent
Licence cancellation with the licensing authority
Final government clearances and records handover
Closing only part of a business? See licence amendments or corporate structuring.
Frequently Asked Questions
Close every file, not just the doors.
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Close Your UAE Company Properly
PROXPAT plans the closure sequence, cancels visas and labour permits, keeps the establishment card valid, and prepares deregistration and licence cancellation files with your liquidator and tax agent.