Key takeaways
- When a UAE company closes permanently, Article 42 of Federal Decree-Law No. 33 of 2021 lists closure as a ground for ending employment contracts, and every employee's work permit and residence visa then has to be cancelled before the licence can be cancelled.
- For private sector staff, the sequence is: cancel the work permit and employment contract with MOHRE first, then cancel the residence permit with ICP (or GDRFA in Dubai); the employee must sign a letter confirming receipt of all wages and end of service benefits.
- A UAE employer has 14 days from the end of the contract to pay the worker's dues, according to Article 53 of the Decree-Law (as at 16 October 2026, unofficial English translation on u.ae).
- After a residence visa is cancelled, the ICP page lists a 30 day grace period for most categories, and longer for some (60, 90 or 180 days); staying beyond it costs AED 50 per day.
- A sponsor who holds family visas must cancel the dependants' visas before cancelling his or her own, so a closure plan has to cover staff families as well as staff.
What happens to employee visas when a UAE company closes?
The employees' work permits and residence visas are cancelled as part of the closure, and the authority will not complete the company's cancellation until they are. Closing the establishment permanently is a listed ground for ending employment contracts under Article 42(7) of Federal Decree-Law No. 33 of 2021.
Nothing is cancelled automatically: each person has a work permit (MOHRE) and a residence permit (ICP, or GDRFA in Dubai), and the company, as sponsor, cancels both. For a free zone company, u.ae lists "cancelling all employee and investor visas" among the steps before the licence cancellation or liquidation application. For a mainland company in Dubai, dubai.ae requires labour cards to be cancelled with MOHRE before the trade licence is permanently cancelled.
In what order do you cancel work permits and employee visas?
Cancel the work permit and employment contract with MOHRE first, then the residence permit with ICP or GDRFA. The residence authority asks for the MOHRE cancellation extract for private sector employees, so the order is not optional.
- Settle the employee's dues and get the employee's signature on the letter confirming receipt of all wages and end of service benefits (required by MOHRE before it processes the cancellation, per u.ae).
- Cancel the work permit and employment contract through MOHRE, by website, app, or a service centre.
- Cancel the residence permit through ICP (smart services or a typing centre) or, in Dubai, through GDRFA or an Amer centre, attaching the MOHRE cancellation extract.
- Cancel dependants' residence visas before the sponsor's own, if the employee sponsors family.
- Cancel the establishment card and any remaining labour card or free zone registration, then apply for licence cancellation or liquidation.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company, as a PDF and calendar file, personalised from a few questions.
What do you owe employees when the company closes?
You owe unpaid wages, any notice entitlements, end of service gratuity for eligible staff and repatriation costs where the law requires them, and the law sets a 14 day payment window from the end of the contract. The table summarises the rules as stated in the Decree-Law and the u.ae pages (as of 16 October 2026).
| Item | Rule | Source |
|---|---|---|
| Closure as a termination ground | Article 42(7): closing the establishment permanently under UAE law | Federal Decree-Law No. 33 of 2021 |
| Notice period | 30 to 90 days where a party ends the contract by notice; the party that skips notice pays an allowance | Article 43 |
| Gratuity | 21 days' wage per year for the first five years, 30 days per year after that; total capped at two years' wage; eligible after one year of continuous service | Article 51; u.ae end of service page |
| Payment deadline | Within 14 days from the end of the contract term | Article 53 |
| Repatriation | Employer bears the cost of returning the worker to the place of recruitment, with exceptions (for example, the worker has joined another employer) | Article 13(12) |
| UAE nationals | End of service falls under pension and social security legislation, not the gratuity formula | u.ae |
The sources I checked don't say whether a notice allowance is payable when the closure itself ends the contract, so treat that as a point to settle in writing with your adviser before you announce the closure; giving notice where you can is the safer reading.
How much does cancelling an employee visa cost?
The fees below are what the official pages list (as of 16 October 2026); they differ by emirate and category.
| Step | Authority | Fee listed | Processing time listed |
|---|---|---|---|
| Residence permit cancellation (Dubai) | GDRFA Dubai | AED 100, plus AED 10 Knowledge Dirham and AED 10 Innovation Dirham | 48 hours |
| Residence permit cancellation (federal) | ICP | AED 50 application fee and AED 100 Smart Services fee, as listed | About 2 days |
| Transfer to a new employer (new work permit) | MOHRE | AED 50 federal transfer fee, categories 1 to 3, plus the permit fee | 2 working days |
| MOHRE work permit and contract cancellation | MOHRE | Not confirmed from the official page | Not confirmed |
Typing centres, PRO providers and free zone authorities add their own charges, so ask for a fee list first.
How long can employees stay in the UAE after their visa is cancelled?
Most categories get a 30 day grace period after cancellation, with 60, 90 or 180 days for specific categories, and remaining past it costs AED 50 per day. The ICP page lists these periods (as of 16 October 2026).
| Category | Grace period listed by ICP |
|---|---|
| Golden, Green and Blue residence holders and their families | 180 days |
| Skilled workers, levels 1 to 3, and property owners | 90 days |
| Permits issued with a guarantor or host | 60 days |
| All other categories | 30 days |
The GDRFA Dubai page lists a 60 day grace period for its own cancellation service, so the period your staff get can depend on the category and the channel; check the period shown for each employee in the system before telling them a date.
An employee who wants to stay and work for another UAE employer needs the new employer to apply for a work permit within 90 days of the previous work permit's cancellation (MOHRE transfer permit page). Ministerial Resolution No. 47 of 2022 imposes a one year work permit ban in only two cases listed on u.ae (resignation during probation without employer breach, and a proven work abandonment report); the closure of the employer is not among them.
Do free zone and mainland closures handle employee visas differently?
Yes: the authorities and documents differ. Dubai's closing-a-business page says labour cards must be cancelled with MOHRE before the trade licence is cancelled, and a commercial company in liquidation publishes a notice giving debtors 45 days to file claims. The u.ae free zone page lists visa cancellation before the licence cancellation application, with a final de-registration certificate at the end. DIFC and ADGM run their own employment regimes, so confirm the rules with the relevant authority if you are licensed there. Full closure processing times are not published on those pages.
14 days: the period within which the employer must pay a worker's dues from the end of the contract term. Source: Federal Decree-Law No. 33 of 2021, Article 53 (u.ae unofficial English translation), checked 16 October 2026.
What most guides don't tell you
- The signed settlement letter means you need the cash before the visa work starts. MOHRE asks for the employee's signed confirmation of all wages and end of service benefits, so you can't cancel permits first and sort the money out later. In practice, fund the final settlements before you set the closure date.
- The two clocks don't match. The new employer has 90 days from the work permit cancellation to apply for a new permit, but on the ICP page most categories get only 30 days of grace after the residence is cancelled. Reading the two pages together, a level 4 to 9 employee may have to leave or change status before a new job is in place; this is our reading of the rules, so check each person's category.
- The owner's own visa can be the awkward one. The ICP page asks investors and partners for a certificate of cancellation or waiver of the commercial licence, while the free zone page lists cancelling investor visas before the licence application. Ask your authority which comes first for your case, because the order can differ.
Which deadlines apply to your company?
Closing a company stacks MOHRE, ICP, tax and licence dates on top of each other, and missing one can block the next step. The free UAE compliance calendar lists your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
How long does it take to liquidate a company in Dubai?
The official pages don't publish a single timeline: Dubai lists a 45 day creditor claim period for commercial company liquidation, and visa and labour cancellations add days on top.
Do I need to deregister for VAT and corporate tax before closing my company?
The u.ae free zone closure page lists deregistering with the Federal Tax Authority, if applicable, as a step before the final de-registration certificate. Check your own VAT and corporate tax status on EmaraTax before applying for licence cancellation.
Can I just abandon my UAE company and leave the country?
No: the company stays on the registers with its work permits and licence, and MOHRE can refuse or cancel permits for an establishment that is inactive. Close it properly so your employees' visas are cancelled and your own obligations end.
What is the difference between deregistration and liquidation in the UAE?
Sole proprietorships and civil companies cancel their licence with labour cards and related documents, while a commercial company in Dubai goes through liquidation with a liquidator, a published notice and a 45 day creditor claim period. Which route applies depends on the legal form of your company.
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
- Federal Decree-Law No. 33 of 2021 on the regulation of employment relationships (English translation, u.ae)
- Terminating employment contracts and arbitrary dismissal, u.ae
- End of service benefits for workers in the private sector, u.ae
- General provisions for the residence visa, u.ae
- Cancellation of residency permits, ICP
- Cancellation of all types of residence permits, GDRFA Dubai
- Work permits, u.ae
- Transfer work permit, MOHRE
- Closing a business in a free zone, u.ae
- Closing your business, Dubai.ae
Last checked: 16 October 2026
This is general information, not tax or legal advice for your specific situation.