Closing a RAK Free Zone (RAKEZ) company is not the same as simply letting a license lapse. RAKEZ trade license cancellation is a formal de-registration process, and until it is completed and confirmed, the company is treated as still existing, still liable for renewal fees, and still exposed to penalties. This guide covers the full RAKEZ cancellation process, the documents required by entity type, current fees and penalties, a realistic timeline, and what happens if cancellation is done incorrectly or not at all.
What RAK Free Zone Trade License Cancellation Means
RAKEZ trade license cancellation is the formal closure and de-registration of a company licensed under the RAKEZ authority. Once complete, the company is struck off RAKEZ’s records and formally closed, subject to proper settlement of liabilities: outstanding dues cleared, visas cancelled, and de-registration documentation filed and approved. This sits within the broader legal framework of Federal Law No. 32 of 2021 on Commercial Companies, alongside RAKEZ’s own free zone regulations. Failing to complete the process does not end the company’s legal existence, it simply leaves outstanding obligations attached to a license that is still technically active.
Common Reasons Businesses Cancel a RAK Free Zone License
- Inactivity or no income generated from the licensed activity
- Strategic restructuring or relocation to another emirate
- Completion of a project-based business with no further activity planned
- Shareholder or partner exit
- Financial constraints or cost optimization
- Merger with another entity
- A change in business model requiring a different license category
RAKEZ requires formal cancellation even where the business has simply stopped operating with no intention of returning. An inactive but uncancelled license continues to accrue obligations regardless of whether it is generating revenue.
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Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
The RAKEZ Trade License Cancellation Process
Cancellation runs through four stages:
- Submit the de-registration application and clearances. A completed application goes to a RAK Free Trade Zone office along with clearance documentation from any authority the business dealt with, including RAK Customs (for warehouse or land holdings), the RAK Chamber of Commerce, Emirates Post, Du or Etisalat, the Federal Electricity and Water Authority, and the Traffic Department if any vehicles are registered to the business.
- Pay the de-registration fees. RAKEZ issues an invoice once the application and supporting documents are submitted.
- Cancel all visas. Every visa issued under the company, employees, partners, and dependents, must be revoked through the RAK Immigration Authority before the file can close.
- Publication and final letter. RAKEZ publishes a legal notice in a local Arabic newspaper for 7 to 14 days depending on the company structure. Individual businesses require a one-week notice; partnerships require a two-week Declaration of Partnership Dissolution. If no objections are raised during that window, RAKEZ issues the company de-registration letter. The license holder’s attendance is required at this stage.
Documents Required by Entity Type
The core declaration requesting de-registration differs depending on how the company is structured:
| Entity type | Required declaration |
|---|---|
| Free Zone Establishment (FZE) | Owner’s Declaration requesting de-registration, signed before the Authority or notarized by a UAE notary, or notarized and legalized up to UAE Embassy level, submitted in original format |
| Free Zone LLC (FZ-LLC) | Shareholders’ Resolution requesting de-registration with justification, signed by all shareholders or an authorized representative, notarized and submitted in original format |
| Branch or subsidiary | Corporate resolution on parent company letterhead, sealed and signed by all parent company shareholders (or the Board, with an official list of directors), notarized and legalized up to UAE Embassy level |
In addition to the entity-specific declaration, every cancellation requires a termination letter from the owner or authorized representative confirming settlement of amounts owed to the general manager (or a resignation letter from the general manager confirming receipt of amounts due, if the general manager is not the owner or a shareholder), the original license returned if still valid, a completed exit survey, and NOCs from RAK Customs, the RAK Chamber of Commerce, the Department of Environment Protection for industrial licenses, Emirates Post, the telecom provider, the utility authority, and the Traffic Department where applicable.
Also check: Free Zone Company Liquidation UAE
RAKEZ License Cancellation Fee and Late Penalty
| Item | Fee |
|---|---|
| RAKEZ license cancellation fee | Confirm directly with RAKEZ, fees vary by license type and are updated periodically |
| Penalty for late cancellation | AED 50 per day if the company is not de-registered within the license validity period |
The daily penalty is what makes delay expensive. A license left uncancelled for several months past expiry accumulates a meaningful fine before the company has even started the formal process, on top of whatever renewal fees RAKEZ may separately apply to an expired but still-registered license.
Realistic Timeline for RAKEZ Trade License Cancellation
| Stage | Activity | Estimated time |
|---|---|---|
| Week 1 | Internal resolution and document preparation | 3 to 5 working days |
| Week 2 | Visa cancellation for employees and partners | 5 to 10 working days |
| Week 3 | Clearance of liabilities and documentation | 5 to 7 working days |
| Week 4 | Submission to RAKEZ and final approval | 7 to 10 working days |
Total estimated timeline runs 3 to 6 weeks. As a worked example, a single-shareholder FZE with no employee visas and no outstanding liabilities can move through all four stages close to the 3-week minimum, since there’s nothing to clear beyond the paperwork itself. A company with 10 employee visas, an unresolved supplier dispute, and vehicles registered in the company name should expect closer to 6 weeks, since visa cancellation, liability settlement, and Traffic Department clearance all have their own processing time that has to run before the final submission.
Consequences of Delayed or Improper Cancellation
An active license means the company still legally exists, even if it has stopped trading. Leaving cancellation incomplete or delayed carries real consequences:
- Accumulating daily penalties. AED 50 per day adds up quickly on a license left unresolved for months.
- Automatic renewal exposure. An uncancelled license can trigger renewal fees the business no longer intends to pay.
- Visa overstay penalties. Visas tied to an inactive company still accrue obligations until formally cancelled.
- Ongoing legal liability. Debts and regulatory exposure remain attached to the company until deregistration is complete, not until the business simply stops operating.
- Blacklisting. Shareholders or managers can face restrictions on registering future UAE businesses if closure obligations are left unresolved.
Must check: Company Liquidation in Dubai & UAE
Can a Cancelled RAKEZ License Be Reinstated
Generally, no. A cancelled RAKEZ license cannot simply be reactivated. To resume operations, the business must apply for a new license, file fresh incorporation documents, and pay new registration fees as though starting over. This is worth weighing before cancelling: a company genuinely unsure whether it will resume activity within a year or two may be better served exploring whether RAKEZ offers any inactive-status option before committing to full cancellation, since reinstatement afterward is not available.
Frequently Asked Questions (FAQs)
How long does it take to cancel a trade license in RAK Free Zone?
What happens if a RAK Free Zone trade license is not cancelled properly?
What documents are required to cancel a RAKEZ license?
How much does it cost to cancel a RAKEZ trade license?
Can a cancelled RAK Free Zone trade license be reinstated?
Do all employee visas need to be cancelled before RAKEZ approves de-registration?
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Farahat & Co. supports businesses through RAKEZ trade license cancellation, including document preparation by entity type, visa cancellation coordination, and clearance from RAK Customs, utility providers, and other relevant authorities.
Contact Farahat & Co. today to discuss your RAK Free Zone trade license cancellation requirements.
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