The UAE Laws have a robust legal framework for setting up and shutting down a business. The process of canceling a trade license and Company liquidation in the UAE may be similar to other countries; however, some differences and additional steps are involved. Trade License cancellation in Dubai and other emirates have their respective procedures.
Businesses in the UAE have to adhere to every necessary step required during the company’s closure as it may lead to unnecessary legal action from the Government Authorities.
What is the Procedure for Cancellation of Trade License in Dubai ?
Depending on the type of the trade license, the process of the closure of the company and the cancellation of its trade license is determined.
Companies in the mainland and free zones have a similar Trade License cancellation procedure, but the free zone requires some additional documentation and clearances.
For cancellation of a sole proprietorship, the business owner has to have:
- A clearance from the Ministry of Human Resources and Emiratisation for a sole proprietorship
- Directorate of Residency and Foreigners Affairs
- The relevant water and electricity authority
- Valid NOC from the Ministry of Labour and Social Affairs
- The leasing Entity
Trade License Cancellation Cost
Business owners in Dubai mostly decide to cancel their trade license when closing their businesses in Dubai. This involves a very straight-forward process, but understanding the trade license cancellation cost in Dubai can save anyone from surprises. Based on different types of businesses, which are local company, free zone company, freelancer, construction company, healthcare service provider, and mainland company, different cancellation costs are charged.
Cancelation of trade license cancellation is monitored by government bodies like Dubai Department of Economic Development (DED), Free Zones, as well as, in certain cases, the UAE Ministry of Economy. The government ensures that a company settles all liabilities and completes a cancellation request of a trade license through the e-services portal.
Below are the costs associated, reasons for cancellation, as well as the timelines for different types of entities.
What is the Trade License Cancellation Cost for Local Companies ?
Why Local Companies Cancel Their Trade License
Common reasons include:
- Low business profit or increased competition
- Expired rental contracts or relocation
- Partnership disputes
- Owners returning to their home country
- Unable to maintain operational costs
Non-renewal of visas or employee limits
Cost of Trade License Cancellation (Local Company)
Typical expenses include:
- DED cancellation fee: AED 500 – AED 1,000
- Notarization of dissolution documents: AED 200 – AED 500
- Cancellation of establishment card: AED 200 – AED 300
- Final visa cancellations: AED 100 – AED 200 per visa
- Clearance letters (DEWA, Etisalat, landlord, etc.): 0 – AED 500
Total expected cost: AED 1,000 – AED 2,500
(Cost increases if the company has multiple visas and office facilities.)
Timeframe: 5 – 10 working days after all NOCs and documents are submitted.
Your Business Solution
Dubai’s Expert Advice at Your Fingertips
What is the Trade License Cancellation Cost for Free Zone Companies ?
Why Free Zone Companies Cancel Their License
- Change of business model
- Moving operations to mainland
- No longer meeting free zone requirements
- High renewal fees
- Dormant or inactive operations
- Company restructuring
Cost of Trade License Cancellation (Free Zone)
Every free zone has its own fee structure. Typical costs include:
- Cancellation fee: AED 1,000 – AED 3,000
- Office lease clearance: Variable
- Visa cancellation: AED 100 – AED 200 per visa
- Liquidation report (if required): AED 1,000 – AED 2,000
Total expected cost: AED 2,000 – AED 6,000
Timeframe: 7 – 15 working days depending on the free zone.
What is the Trade License Cost for Freelancers & Professional Services ?
Why Freelancers Cancel Their License
- Leaving the UAE
- Ending freelance projects
- Cost of renewal becomes too high
- Changing profession or sector
- Visa not required anymore
Cost of Trade License Cancellation (Freelancer Permit)
- Cancellation fee: AED 200 – AED 500
- Visa cancellation: AED 100 – AED 200
- Establishment card cancellation: AED 200 – AED 300
Total expected cost: AED 300 – AED 1,000
Timeframe: 1 – 3 working days.
What is the Trade License Cost for Construction & Contracting Companies ?
Why Construction Companies Cancel Their License
- Project completion and no new contracts
- High operational costs
- Heavy compliance and insurance charges
- Financial losses
- Business liquidation
Cost of Trade License Cancellation (Construction Sector)
- DED cancellation fee: AED 500 – AED 1,000
- Liquidator report (mandatory): AED 3,000 – AED 6,000
- MOE cancellation (if activity under MOE): AED 100 – AED 200
- Employee visa cancellation: AED 100 – AED 200 per visa
- Equipment lease clearance: Variable
Total expected cost: AED 5,000 – AED 10,000
Timeframe: 15 – 30 working days depending on the number of employees and assets.
Your Business Solution
Dubai’s Expert Advice at Your Fingertips
What is the Trade License Cost for Startups & Tech/IT SMEs ?
Why Tech Startups Cancel Their License
- Running out of funding
- Merging with another company
- Moving operations abroad
- High licensing and operational expenses
- Closing down after short-term projects
Cost of Trade License Cancellation (Tech Startups)
- License cancellation: AED 500 – AED 1,000
- Visa cancellation: AED 100 – AED 200
- Digital assets & cloud service cancellation: Variable
- Free zone or DED clearances: 0 – AED 300
Total expected cost: AED 500 – AED 1,500
Timeframe: 5 – 8 working days.
What is the Trade License Cost for Health & Beauty Service Providers ?
Why Health & Beauty Businesses Cancel Their License
- High rental costs
- Closing due to low demand
- Owners leaving UAE
- Beauty professionals switching careers
- Non-renewal of employees or service contracts
Cost of Trade License Cancellation (Salons, Clinics, Spas)
- Cancellation fee: AED 500 – AED 1,000
- Closing inspection (if required): AED 100 – AED 300
- Visa cancellation: AED 100 – AED 200
- Cancellation of service contracts: Variable
Total expected cost: AED 500 – AED 2,000
Timeframe: 5 – 7 working days.
What is the Trade License Cancellation Cost for Mainland Companies ?
Why Mainland Companies Cancel Their License
- High commercial rent
- Lack of business growth
- Investor relocating
- Partnership disputes
- Switching to online or freelance work
Cost of Trade License Cancellation (Mainland)
- DED cancellation fee: AED 500 – AED 1,000
- Notarization of dissolution: AED 200 – AED 500
- Immigration & labor clearance: AED 0 – AED 200
- Visa cancellation: AED 100 – AED 200
- Final audit (if needed): AED 1,500 – AED 3,000
Total expected cost: AED 1,000 – AED 3,000
Timeframe: 7 – 12 working days.
Your Business Solution
Dubai’s Expert Advice at Your Fingertips
How to Close a Free Zone Company ?
In addition to the above clearances, free zones require businesses to apply for closure through their official portal. Once the submission of the request is accepted, an announcement of business closure is made in local newspapers and gazettes in Arabic and English upon a successful closure.
Three ways a Free zone company can apply for cancellation of its license due to business closure are summary winding up, creditors winding up, or filing for bankruptcy.
Depending on the company’s size before the closure, the warehouse and the plot facility of the company will require clearance from the free zone authorities.
Employees of the Free Zone company are liable to receive a minimum of two months’ notification before the company’s closure as a paid notice period.
The business cannot cancel a trade license if they haven’t paid the employee’s remuneration and canceled their work permits in the UAE.
Trade License Cancellation Cost in Dubai, UAE
| Company Dissolution Fees | AED 2,520 |
| Trade License Cancellation Fees | AED 1,020 |
Liquidating a company in Dubai comes with two main fees:
- A trade license cancellation cost of AED 1,020 for admin processing and;
- A company dissolution cost of AED 2,520 for formal procedures and documentation.
What is difference between License Cancellation & Liquidation in the UAE ?
A business may have to cancel its trade license for specific reasons. It is also known as the deregistration of trade License, where the company no longer wishes to run the business.
However, Company liquidation in the UAE was established under the Federal Law of 2015 for commercial companies and cancellation of trade license forms a part of the liquidation process.
In a company liquidation in Dubai, the business will have to cease its operations, and its assets will be audited and shared with the company shareholders and creditors.
What are Types of Liquidation in the UAE ?
Voluntary Liquidation
While running a business, there is always a priority given to financial leverage, and creditors are introduced into the company’s finances. Therefore, voluntary liquidation involves presenting the facts and financials that the company doesn’t have enough money to pay its creditors.
Upon closure, the creditors prioritize settlement, and the company’s shareholders take a liquidation decision.
Compulsory Liquidation
When a company repeatedly fails to pay its creditors, shareholders, staff, etc., due to no income or other valid reasons, a court order gets issued for the company stating the seizing of its assets, and the proceeds are distributed from the highest to the lowest priority of claims.
What Are the Necessary Steps for Company Liquidation in the UAE ?
General Partnership, Limited Liability Company, simple limited partnership, public joint-stock, and private joint-stock company are the types of companies in the UAE that can apply for liquidation. The company Liquidation process is lengthier and more complex than the simple license cancellation.
- The company must conduct a general assembly, and an independent liquidator is appointed. An appointment letter is to be provided by the partners or shareholders on the appointment of a liquidator.
- The liquidator submits an independent publicly notarised liquidation report to the pertaining authority. In such cases, it can be the Department of Economy and the free zone authorities.
- An in-depth study of the liquidation report is conducted by the Dubai Economic Department and the relevant authorities to cancel out any chance of misinformation or manipulating data.
- Once the liquidation application is approved on the DED website, the business will receive a liquidation certificate. The companies notify the general audience and debtors about its liquidation and closures through two local newspapers based on these certificates. A total of forty-five days is allowed for debtors to file any claim against the company.
- The business must cancel the firm card from the Ministry of Human Resources and Emiratisation once the clearance for DEWA/ SEWA etc. is received.
- Depending on each case, the DED sets its fees, and upon paying the same, a certificate of deregistration or cancellation is issued.
Do you Need Help for Cancelling Your Trade License in Dubai?
If you want a smooth and fast trade license cancellation with clear cost guidance, our team at Farahat & Co. can take care of the full process, documents, approvals, and government coordination.
Contact us today for a free consultation and get your cancellation completed without delays.
Conclusion
Deregistration or cancellation of license and clearance from the liquidator can be tedious. Farahat and co can assist you with the legal framework and provide you with the best financial advisory on the cancellation of a license in the UAE.We have garnered decades of experience and compiled a team of both local and expatriate employees.
We try to make the process of liquidation an easy and smooth transition. Our team of expert auditors has been regularly appointed for various such cases in the UAE due to our accurate and punctual work ethics. If you seek more information about a trade license cancellation process, contact us today for a free consultation.
