Cancelling a trade license in Sharjah is a legal process that has to be done in compliance with the rules laid down by the Sharjah Economic Development Department (SEDD).
This article explains in detail the process of cancelling a trade license in Sharjah and the costs associated with it.
What is Trade License Cancellation?
Trade license cancellation is essentially the deregistering process with the Department of Economic Development (DED) after finishing all the required tasks. The process involves:
- Clearance of dues
- Government Approvals
- Labour clearance
- Immigration clearance
- Utilities clearance
- Publication of a liquidation notice
- Issuance of a final company closing certificate
Only then is the company finally legally dissolved and erased from the commercial records of Sharjah.
What are the Reasons for cancelling the trade license in Sharjah?
There are several reasons why a business may require cancelling its trade license:
- Business Closure: If you have decided to permanently shut down your business, you must cancel your trade license.
- Change in Business Activity: If your business is changing its business activity to another activity that requires a different license type, then you may require cancelling the existing one.
- Merger or Acquisition: In the case of a merger or acquisition, it may be necessary to cancel the previous trade license and get a new one.
- Relocation: If you are planning to shift your business to another emirate or country, you will have to cancel your Sharjah trade license.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How to Close a Company in Sharjah, UAE (Step-by-Step Process)
1. Submit the Cancellation Request
The first step is to cancel the trade license from SEDD. This can be done online at the SEDD website or at the SEDD office. The request should include the details of the trade license and the reason for cancellation.
2. Clear All Financial and Employee Obligations
The business must settle all financial obligations and employee-related matters before the license can be cancelled.
- Cancellation of employee work permits and visas – This must be done through the Ministry of Human Resources and Emiratisation (MOHRE) and the General Directorate of Residency and Foreigners Affairs (GDRFA).
- Settle debts and liabilities – Businesses must get clearance certificates from banks, creditors, and government departments.
3. Publish a Liquidation Notice
If the business is in the process of being winded up, two local newspapers, one of which must be Arabic, must contain a notice. The notice of liquidation shall in all cases give creditors at least 45 days of the date of the notice to present their claims.
4. Obtain Necessary Approvals
Based on the business activity, approvals may be needed from appropriate government authorities;
- Municipal department offices.
- Sharjah Electricity and Water Company (SEWA).
- Other approval bodies are linked to other specific business industries.
5. Submit Final Documents
When the notice is up, the business will have to provide the final documents to the bank.
Such documents include;
- A declaration from the liquidator and company partners indicating there are no outstanding claims.
- MOHRE clearance that all employee-related due have been paid.
- Any other documents that may be required by SEDD regulations.
6. Obtain License Cancellation Approval
On verification, SEDD issues a deregistration certificate to close down the business.
What Are the Requirements for Trade License Cancellation?
To complete the cancellation process businesses must provide:
- Original trade license and registration certificates.
- Clearance certificates from banks, SEWA, and other authorities.
- Employee visa cancellation proof from MOHRE.
- Board resolution approving the cancellation (for companies with multiple shareholders).
- Newspaper liquidation notice proof (if applicable).
The request for additional documents will be made by SEDD based on the business activity and structure.
Company Liquidation & Trade License Cancellation Cost in Sharjah
The cost of cancelling a trade license depends on the license class, outstanding debts, and penalties. As put by SEDD, the average costs are:
| Description | Cost (AED) |
| Publishing cancellation of the license | 350 |
| Cancelling License | 150 – 3,000 |
| Commercial Registration Clearance Fee | Varies |
| License expired for less than one year | 500 |
| License expired for one to two years | 1,000 |
| License expired for more than two years | 1,500 and increasing |
The cost of publishing the cancellation of a trade license is AED 350. The cancellation process itself ranges from a minimum of AED 150 to a maximum of AED 3,000, depending on the license type and associated factors.
Additionally, a commercial registration clearance fee applies. For expired licenses, the fees vary based on the duration of expiry: AED 500 for licenses that expired for less than one year, AED 1,000 for those that expired for one to two years, and AED 1,500 or more for licenses that expired for over two years.
The exact fees can vary on a case-by-case basis hence it is advised to verify with SEDD for the most recent information.
What is the Alternative Option – Freezing a Trade License?
For those companies that do not wish to put a permanent stop to their trade license, there is an option of freezing the license. This allows the business to stay closed without actually shutting down completely.
- A license can be frozen for a maximum of three years (this is recommended by the government).
- The company does not have to conduct business, but it must pay an annual freezing fee.
- Some corporations choose this model if they intend to continue with their activities in the future.
What are the Important Considerations Before Cancellation?
- Check that all the debts, salaries of employees, and government expenses are paid.
- Verify whether there is a need for any more approval from other regulatory bodies.
- It is very important to make sure that all the necessary documents are provided and rendered correctly to prevent any delays in processing.
How Farahat & Co. Can Assist You
Our Services Include:
- Advisory and recommendation on trade license cancellation.
- Preparation of documents and their submission to SEDD and other relevant entities.
- Help with the cancellation of the employee’s visa and work permit.
- To secure the necessary approvals from SEDD and other regulatory bodies.
Closing a business in Sharjah requires a proper process and should be conducted carefully. A Sharjah trade license cancellation has aspects beyond just shutting down; it includes government approval, settling obligations, visa cancellation, and government deregistration.
Inadequate completion of the cancellation process may result in penalties, fines, or future legal complications being imposed on businesses. Below is a discussion on the trade license cancellation process in the Emirate of Sharjah, which consists of two official steps.
What are the important Two Stages?
The trade licenses cancellation process in Sharjah entails two main steps:
- Initial liquidation and closure approval
- Final Cancellation and Deregistration
There are particular documents for each stage and respective compliance requirements.
Stage 1: Initial Liquidation and Closure Approval
This stage officially announces the company’s intention to close down and appoints a liquidator.
Main Steps of Stage 1
- Resolution of the Board of Directors on closing down the company
- Liquidator appointment
- Attestation by notary public of resolutions
- Submission of initial documents to Sharjah DED
- Publication of Closing Advertisement
Documents Required
- Board resolution signed by shareholders
- Liquidator letter
- Liquidator license copy
- Auditor registration certificate
- Signature authentication certificate
- Passport copies of partners
- Copy of trade license
Upon approval, a permission for liquidation is granted by the DED.
Liquidation Notice and 45-Day Creditor Period
After initial approval:
- A liquidation notice publication must appear in local Arabic newspapers.
- The notice should remain operational for a notice period of 45 days
- This period allows creditors to submit third-party claims.
The company cannot move to the final cancellation stage until this deadline expires.
Stage 2: Final Cancellation and Deregistration
Once this 45-day duration is completed, the organization embarks upon final closure.
Key Steps in Stage 2
- Submission of final audit report
- Clearance from all authorities
- Confirmation of liquidator
- Issuance of liquidation certificate
- Final cancellation with Sharjah DED
What Clearances Required Prior to Final Cancellation?
Sharjah requires documentation that every commitment has been fulfilled.
Labour and Immigration Clearance
- MOHRE clearance
- Immigration clearance
- Employee Visa Cancellation
- Partner visa cancellation
- No active employee visas
Utilities and Service Providers
- SEWA Clearance
- Etisalat clearance
- Payment for any pending utility bills
Financial and Legal Clearances
- Government dues clearance
- Auditor certificate
- Confirmation of no pending liabilities
- No Objection Letter from Partners_
Submission to Sharjah DED
The following are submitted to the Department of Economic Development (DED):
- Original newspaper advertisement
- Final audit report
- Liquidator confirmation
- Letters of Partner Confirmation
- All clearance certificates
- Payment of DED charges
Once approved, the DED finishes the process of deregistration on receipt of the company closure certificate.
Important Considerations Before Closing a Business in Sharjah
Before initiating license cancelation, companies should take into consideration:
Timing and Process Duration
- Minimum 45 days due to creditor notice
- Delays when documents or clearances are not present
Costs Involved
- Liquidation fees
- Liquidator Fees
- Newspaper advertisement costs
- DED Charges
- Audit report fees
Visa Status
- All employee visas have to be cancelled
- No active visas are allowed during final cancellation
License Type
- LLC license cancellation requires shareholder approval
- Branching and licensing have different procedures
Regulatory Compliance
- Must follow the requirements of the Sharjah authority strictly
- Failure could result in penalties and blacklisting
What Cost Factors should be considered?
The cost of cancelling a trade license in Sharjah depend on:
- Business structure
- Number of visas
- Complexity in Audit and Liquidation
Typical Cost Components
- DED cancellation fees
- Liquidator appointment fees
- Newspaper Publication Costs
- Audit Report Charges
- Government Clearance Fees
The amount cannot be standardized. But expert advice will prevent incurring unwanted costs.
What is the Processing Time for Cancellation?
On average, the process duration is: 45 to 60 days for standard cases
Longer if there are:
- Outstanding liability
- Active Visas
- Third Party Claims
Careful planning can go a long way in preventing
Can a Foreign Investor Cancel a Trade License Remotely?
Yes. Foreign investor can cancel a trade license in Sharjah through:
- Preparing a Notarized Power of Attorney
- Appointing a Registered Liquidator
- Submitting attested documents
The professional firms will handle the entire process without the physical presence of the investor.
Business Closure Penalties in Sharjah (If You Don’t Cancel Your License Properly)
The consequence of failing to cancel an inactive license may include:
- Accumulation of DED Penalties
- Visa and Immigration Issues
- Banking Restrictions
- Proceedings regarding non-payment of debts
- Blacklisting of partners or Directors
Effective cancellation shields shareholders against future obligations.
Why Professional Support is Important for Business Closure in Sharjah
The trade license cancellation procedure involves various authorities and formalities that, if not followed properly, can result in delays and fines.
They also ensure:
- Accurate documentation
- Approvals within timelines
- Full compliance with the law
- Smooth and economical closure
Conclusion
Cancellation of a trade license in Sharjah is an organized process. It requires careful planning. It includes from liquidator appointment and newspaper publication to final DED deregistration, all proceed according to Sharjah rules.
When shutting down your limited liability company, branch office, or professional business, planning and professional help ensure that there are no fines and that the closing is clean.
Cancel Your Trade License in UAE Without Fines – Get Expert Help
Farahat & Co offers end-to-end services related to Sharjah trade license cancellation, including liquidation, cancellation of visas, audits, and approval from DED.
Call our experts today and experience a smooth, compliant, and hassle-free closing of your company in Sharjah.
Farahat & Co. a reputable liquidator in UAE, is committed to assisting businesses to seamlessly complete the process of cancelling a trade license in Sharjah. In compliance with relevant laws.
Contact us today, we shall be glad to assist you.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
FAQs
How do I cancel a trade license in Sharjah?
To cancel a trade license in Sharjah, you must apply through the Sharjah Economic Development Department (SEDD), cancel employee visas, clear all financial liabilities, obtain NOCs from relevant authorities, publish a liquidation notice (if required), and submit final documents to receive the cancellation certificate.
How long does it take to cancel a trade license in Sharjah?
The process usually takes 45 to 60 days due to the mandatory creditor notice period and required approvals. Delays may occur if there are pending liabilities, active visas, or incomplete documentation.
What is the cost of trade license cancellation in Sharjah?
The cost varies depending on the business type and status. It may range from AED 150 to AED 3,000 for cancellation, plus additional charges for liquidation, newspaper publication, audit reports, and government clearances.
Is liquidation required for company closure in Sharjah?
Yes, companies such as LLCs and partnerships must go through a formal liquidation process. A licensed liquidator must be appointed to settle liabilities, notify creditors, and complete the legal closure.
What happens if I don’t cancel my trade license in Sharjah?
Failure to cancel a trade license can result in fines, visa penalties, legal liabilities, and possible blacklisting of partners or shareholders, even if the business is no longer operating.
Can I cancel my Sharjah trade license online?
Yes, the initial application can be submitted through SEDD online services. However, the process still requires document submission, approvals, and clearance from multiple authorities.
Do I need to cancel visas before closing a company in Sharjah?
Yes, all employee and partner visas must be cancelled through MOHRE and immigration authorities before final license cancellation approval is granted.
What is the difference between trade license cancellation and company liquidation?
Trade license cancellation is the final step of closing a business, while liquidation is the legal process of settling debts, distributing assets, and preparing the company for closure.
Can a foreign investor cancel a trade license in Sharjah remotely?
Yes, foreign investors can complete the cancellation process remotely by issuing a notarized power of attorney and appointing a licensed liquidator to handle the procedure.
Is freezing a trade license better than cancelling it?
Freezing a license is suitable if you plan to resume business in the future. However, if the business is permanently closed, cancellation is recommended to avoid ongoing fees and liabilities.
