Closing a UAE company properly

Closing a UAE company is not the same as letting its licence expire. An expired licence leaves the company in existence, with its obligations still running. A proper closure cancels the licence and every file attached to it, in the order the licensing authority expects.

Know which authority closes your company

The authority that issued the licence decides how it is cancelled. A mainland company closes through its economic department; a free-zone company closes through its free-zone authority, and each free zone publishes its own requirements. Some routes are a simple cancellation; others require formal liquidation steps before the final cancellation is issued.

ADGM, for example, offers two strike-off routes: one that requires notice to members, directors, creditors and employees, and a streamlined route for smaller companies. Both carry a public notice period before the company is struck off. (ADGM: Closing down your company)

Close what is attached to the licence first

Most closures stall on the files around the licence rather than the licence itself. Before the final application, expect to deal with:

• Visas and the establishment card. Visas the company sponsors are cancelled or transferred, and the establishment card is cancelled. ADGM lists this as a prerequisite to strike-off. (ADGM)
• The labour file. Where the company employs staff, end-of-service obligations are settled and the labour file is closed.
• The office. The lease, Ejari or flexi-desk agreement is ended in line with its terms.
• Bank accounts. Balances, pending payments and cheques are cleared so the account can be closed.

Deregister for tax

A company registered for corporate tax must apply to deregister when it closes, is liquidated or ceases business. The application is supported by financial statements up to the licence cancellation date and the licence cancellation document. (FTA: Corporate Tax Deregistration) A company registered for VAT deregisters separately.

Check readiness before you file

Before anything is submitted, confirm five things: the licence is in force or its renewal and penalties can be settled; no visas remain under the company; the labour file can be closed; the office can be released; and the shareholders can sign the resolution to close, with attested signatures where they are abroad. Gaps found at this stage are far easier to clear than gaps found after an application is rejected.

Keep the closed-file record

When the authority issues the cancellation, keep the cancellation documents with the resolution, the visa and labour cancellations, the bank closure letter and the tax deregistration confirmation. That record answers later questions from banks, tax authorities or a future company you set up.