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.

Also read: Company Liquidation in Dubai, UAE

Reasons for Cancelling Trade License in Sharjah, UAE

There are several reasons why a business may require cancelling its trade license:

Business Closure: If you have decided to shut down your business permanently, you have to 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.

Procedure for Trade License Cancellation in Sharjah

1. Submit the Cancellation Request

The first step to do is to cancel the trade license from SEDD. This can be done online from 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 30 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 30-day 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.

Also read: Trade License Cancellation in Dubai, UAE

Requirements for Trade License Cancellation in Sharjah

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.

Cost of Trade License Cancellation 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:

The costs of publishing cancellation of the license are AED 350.
Cancelling License (it will cost AED minimum of 150 and a maximum of AED 3000)
Commercial Registration Clearance Fee AED
AED 500 for less than one year of expired license.
AED 1,000 for one or two years’ license expiry.
AED 1500 for more than two years expired license and so on.

The exact fees can vary on a case-by-case basis hence it is advised to verify with SEDD for the most recent information.

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.

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.

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.