Key takeaways
- A UAE company is properly closed only when its licence is cancelled or the company is liquidated, its FTA registrations are cancelled, its employee permits are cancelled and its bank account is settled; cancelling the licence alone does not end its tax obligations.
- A UAE company must apply to deregister for corporate tax within 3 months of the date its business ceases (FTA Decision No. 6 of 2023, as of October 2026).
- A UAE company must apply to deregister for VAT within 30 business days of the date the deregistration obligation arises, and the final VAT return and payment are due within 28 days of the effective date (FTA, as of October 2026).
- Late corporate tax deregistration costs AED 1,000, then the same each month, up to a maximum of AED 10,000 (Cabinet Decision No. 75 of 2023, as amended).
- A Dubai mainland company liquidation includes an AED 520 dissolution fee and a newspaper notice that gives creditors 45 days to claim (u.ae, as of October 2026).
What does it take to close a company in the UAE properly?
A UAE company is properly closed only when four things are finished: the licence is cancelled (or the company is liquidated through the licensing authority), the company is deregistered for corporate tax and VAT with the FTA, every employee permit is cancelled, and the bank account is settled and shut. Cancelling the licence alone ends no tax obligations.
The order matters because each authority asks for the previous one's paperwork: the FTA's corporate tax service asks for the licence cancellation document, and Sharjah's economic department asks for a MOHRE letter confirming the establishment card is cancelled.
| Stage | Who you deal with | What it needs |
|---|---|---|
| 1. Decide the route | Shareholders | Cancellation if clean, liquidation if debts remain |
| 2. Employees | MOHRE and immigration | Labour cards and establishment card cancelled |
| 3. Licence | DET, free zone or economic department | Shareholder resolution, liquidator papers, creditor notice where required |
| 4. Tax | FTA through EmaraTax | Final returns, financial statements to the cessation date, deregistration applications |
| 5. Bank | Your bank | Final settlement, account closure after clearances |
Is cancelling a licence the same as liquidating a company?
No. Cancellation is the licensing authority's administrative step that ends the licence; liquidation is the legal process that winds up the company's assets and debts, and on the mainland a licence for a company is cancelled by the liquidator as part of it.
Say a SHAMS consulting company has no debts: its owners may qualify for a shareholders' voluntary liquidation. A mainland LLC with unpaid suppliers needs a liquidator who settles creditors first. The Commercial Companies Law (Federal Decree-Law No. 32 of 2021) sets the grounds and the liquidation mechanics for mainland companies, so a lawyer should confirm the route for yours.
How does liquidation work on the mainland and in a free zone?
Mainland procedures differ by emirate, and free zones run their own liquidation rules, so the authority that issued your licence decides the exact steps.
In Dubai, u.ae describes a two-phase process for companies. Phase 1 needs notarised General Assembly minutes confirming liquidation and naming the liquidator, the liquidator's acceptance letter with supporting papers, and a fee of AED 520 for the dissolution certificate and liquidator appointment (as of October 2026, subject to legal advisor approval). An announcement then runs in two Arabic local newspapers for one day, giving debtors 45 days to submit claims. Phase 2 needs the original newspaper, the final company report, a declaration that no objections arrived within the 45 days, and MOHRE labour card cancellation.
| Authority | Route | Verified requirement (as of October 2026) |
|---|---|---|
| Dubai mainland | Liquidation of a company | Notarised minutes, liquidator papers, AED 520 fee, two Arabic newspaper notices, 45 days for claims |
| Sharjah mainland | Licence cancellation | MOHRE letter confirming establishment card cancellation |
| SHAMS | Shareholders' voluntary liquidation | Resolution (generally 75% of issued share capital), signed solvency statement, company able to pay all debts within six months |
| SHAMS | Creditors' voluntary liquidation | Resolution, solvency statement, notices in one Arabic and one English national newspaper, notarised liquidator declaration |
The SHAMS rows come from its Liquidation Regulations 2018. Other free zones, DIFC and ADGM follow their own rules, so check the issuing authority before you appoint anyone.
What do you need to do with the FTA before you close?
You must apply to deregister for corporate tax within three months of the date your business ceases, and for VAT within 30 business days of the date the obligation to deregister arises, and the FTA will not finish either until your returns are filed and what you owe is settled.
For corporate tax, FTA Decision No. 6 of 2023 sets the three month window, and Federal Decree-Law No. 47 of 2022 (Article 52) is the legal basis. The application goes through EmaraTax and is free; the FTA says it processes a complete application within 40 working days, with up to another 40 if it asks for more information. You attach financial statements up to the licence cancellation date and the cancellation document. If you don't answer a request within 60 calendar days, the application may be rejected.
For VAT, the FTA's page gives 30 business days to apply when deregistration is mandatory, and the final VAT return and payment are due no later than 28 days from the effective date of deregistration. Deregistration is also possible when taxable supplies fall below the AED 187,500 voluntary registration threshold, but a closing company deregisters because it has stopped trading.
| Item | Corporate tax | VAT |
|---|---|---|
| Deadline to apply | 3 months from cessation | 30 business days from when the obligation arises |
| Where | EmaraTax | EmaraTax |
| Fee | Free | Free |
| FTA processing estimate | 40 working days | 30 business days |
| Late deregistration penalty | AED 1,000, repeated monthly, capped at AED 10,000 | Check the current VAT penalty schedule |
If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company.
AED 10,000: the maximum administrative penalty for failing to submit a corporate tax deregistration application on time (AED 1,000, then the same each month after). Source: Cabinet Decision No. 75 of 2023, as amended, checked 15 October 2026.
What happens to employees, visas and the bank account?
Employee permits have to be cancelled before the licence can be, and the bank account should be closed last, after the final tax payments clear.
On the mainland, u.ae lists cancelling labour cards through MOHRE as a requirement in Dubai for every company type and for sole proprietorships, and Sharjah's economic department asks for the MOHRE letter confirming the establishment card cancellation. Residence visa cancellation, timelines and fees depend on the issuing authority, so confirm them with it before you give staff a leaving date.
Keep the bank account open until the final returns and any tax balance are paid, so the payments and any refund have somewhere to go.
How long does closing a company take and what does it cost?
No official source gives one total timeline or cost, because the authorities run in sequence and each sets its own processing time. The verifiable pieces are the 45 day Dubai creditor window, the FTA's 40 working day and 30 business day estimates, and the AED 520 Dubai dissolution fee. Auditor, liquidator, legal and newspaper costs are set by providers; get written quotes.
What most guides don't tell you
- The FTA clock and the licence clock are separate. The three month corporate tax deadline runs from when the business ceases, not from when the licence cancellation certificate arrives. If the authority takes weeks to approve the cancellation, you can still be inside the penalty window.
- The licence cancellation document is also the FTA's proof. The FTA asks for it in closures, so keep the original safe.
- Filing duties continue until deregistration is approved. Returns stay due until the FTA approves deregistration, and corporate tax return penalties under Cabinet Decision No. 75 of 2023 run at AED 500 per month for the first 12 months, then AED 1,000 per month. An unpaid, unfiled "closed" company accumulates both.
- Records outlive the company. The corporate tax law requires records for seven years after the end of the tax period they relate to, so someone must keep them.
Which deadlines apply to your company?
The deadlines depend on your licence type, emirate or free zone, and the date your business stopped trading. The free UAE compliance calendar is a calendar of your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
What is the difference between deregistration and liquidation in the UAE?
Deregistration cancels your registration with a tax authority such as the FTA, while liquidation winds up the company itself, paying debts and distributing what is left. A closed company normally needs both: liquidation or cancellation with the licensing authority, then tax deregistration.
How long does it take to liquidate a company in Dubai?
No official source gives one total. The Dubai process includes a 45 day creditor claim window after the newspaper notice, then separate FTA processing estimates of 40 working days for corporate tax and 30 business days for VAT.
Do I need to deregister for VAT and corporate tax before closing my company?
The corporate tax deadline runs from when your business ceases, so you don't wait for the company to be struck off. The FTA's corporate tax service asks for the licence cancellation document in a closure, while its VAT service accepts a liquidation letter or board resolution as supporting evidence.
What happens to employee visas when I close my company?
Labour cards and the establishment card are cancelled through MOHRE as part of closure. Residence visa cancellation, timelines and fees depend on the issuing authority, so confirm them with it.
Can I just abandon my UAE company and leave the country?
You can leave, but the company does not disappear: unfiled returns and a missing deregistration application keep generating FTA penalties, and corporate tax return penalties run at AED 500 per month for the first 12 months, then AED 1,000. Close it properly to stop them.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- FTA: Corporate Tax Deregistration service
- FTA: VAT Deregistration service
- Ministry of Finance: Cabinet Decision No. 75 of 2023 and its amendments (administrative penalties)
- u.ae: Closing a business on the mainland
- SHAMS Liquidation Regulations 2018
- Federal Decree-Law No. 47 of 2022 (Corporate Tax), Article 52, as cited on the FTA service page
- Federal Decree-Law No. 32 of 2021 on Commercial Companies
- FTA Decision No. 6 of 2023 on the Tax Deregistration Timeline for Corporate Tax
Last checked: 15 October 2026
This is general information, not tax or legal advice for your specific situation.