The process of company liquidation in Dubai, Abu Dhabi, and the UAE is an elaborate one, which begins with the cancellation of your trade license and all associated permits. This officially terminates your business’s operations in the mainland as well as free zones. This is a crucial step as it helps you avoid fines and penalties that your business may accrue if the license remains active but is not renewed.

Now once you have had your license and permits terminated, the further liquidation process varies from business to business. For example, for sole proprietorships and civil establishments, you need to apply for cancellation through the Department of Economic Development (DED) and obtain clearance from key government bodies such as:

• Ministry of Human Resources and Emiratisation (MOHRE)
• General Directorate of Residency and Foreigners Affairs
• Utility service providers (like DEWA, SEWA, or ADDC)
• Leasing or free zone authority, if applicable

However, if you run a large enterprise with multiple stakeholders, such as partnerships or joint ventures, the process is more complex and generally requires hiring one of the registered business liquidation companies, publishing a liquidation notice, settling outstanding liabilities, liquidating company assets, and ensuring all creditors are paid before submitting final clearance documents to the DED.

You need to appoint a liquidator if the legal form of your company is one of these:

• General Partnership
• Limited Liability Company
• Simple Limited Partnership
• Public Joint Stock Company
• Private Joint Stock Company

Company liquidation in Dubai and UAE is a complex process which involves two stages -

Stage 1:

• Prepare notarized minutes of the general assembly confirming the company liquidation and the appointment of a liquidator.
• Arrange an official letter by a registered liquidator accepting the duty.
• Apply for cancellation by filling out the required form through DED or other approved channels.
• DED will issue a liquidation certificate.
• Publish the notice of liquidation in two local newspapers.
• The notice gives the debtors a grace period of 45 days from the date of issue to submit their claims.

Stage 2:

• Submit to DED a declaration letter from the liquidator and the partners indicating no objection from any other parties during the grace period.
• Collect required approvals from other government bodies to cancel a license.
• Cancel the firm card at the Ministry of Human Resources and Emiratisation.
• Cancel the foreign partners’ visas sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs.
• Submit all the above documents to get the approval for final cancellation.
• DED will determine the fees.
• You can receive the certificate of deregistration (cancellation) after paying the requested fees.

Freezing a trade licence

Freezing a license is different than terminating a license completely.

In Dubai, companies may keep their trade licenses inactive for three years by paying a certain freezing fee. However, they cannot extend it beyond that specific period.

The DMCC lists 3 types of closures -

• Summary winding up – this can be done in cases where a company has either no liabilities or is able to discharge its liabilities within 6 months and commences with a statement of solvency.
• Creditors winding up – this can be done when the company passes a resolution for winding up and is followed by a meeting with the company’s creditors.
• Bankruptcy – this can be done by the court under UAE Commercial Transactions Law No. 18 of 1993.

Closing a business entails more than just ceasing operations. In DMCC, you need to apply for closing the business through the member portal. The authorities, duties, and responsibilities of the Directors of the company will be terminated as an effect of the submission of the company termination application. The application will be reviewed and processed. This will be followed by an announcement in a local Arabic newspaper. DMCC authorities will then file the final termination of the company and issue termination letters.

In JAFZA, you must notify the authorities three months prior for the office and warehouse facility and 6 months prior for the plot facility.

In all cases, you will need to cancel the employees’ visas and their work permits. Dubai portal explains that this requires coordination with both the Department of Naturalisation and Residency and the Ministry of Human Resources and Emiratisation.

As per the UAE’s Labour Law, employers are required to give their employees a two-month, paid notice period before terminating their contracts. In many cases, employees can keep their residency visas until the company’s trade license runs out. Then, the company needs to cancel utilities and telecommunication services. Collect an NOC from the utilities providing company for processing the closure.

Liquidating a private shareholding company in the UAE involves a detailed process with specific approvals and clearances. Here’s what you will need:

1. Approval from the Board/Shareholders:
   To begin the liquidation process, you need a general assembly resolution from the board or the shareholders, authorizing the liquidation and appointing an official liquidator. This liquidator could be a company offering business liquidation services in Dubai and Abu Dhabi.
2. Appointment Letter from a Licensed Liquidator:
   Next, you would need a formal letter of appointment from a UAE-registered liquidator company along with a license copy.
3. Approval from the Department of Economic Development (DED):
   Once you have submitted your initial documents, you will receive a preliminary letter of approval for liquidation from DED.
4. Publish the Notice of Liquidation:
   A 45-day notice must be published in two local newspapers (Arabic and English), announcing the company’s intention to liquidate.
5. Clearance from MOHRE:
   You need a clearance from the Ministry of Human Resources and Emiratisation (MOHRE), which is usually received once all employee contracts and labor cards have been canceled and dues settled.
6. Immigration Clearance:
   You need clearance from the General Directorate of Residency and Foreign Affairs, for which all visas under the company (employees, partners, dependents) must be canceled.
7. Clearance from FTA:
   If you are a business registered for VAT, you need to deregister VAT and complete the final tax return filings, for a final clearance from the Federal Tax Authority.
8. Bank Account Closure Letter:
   Once you have settled all the dues with the utility service providers like DEWA, SEWA, ADDC, etc., a letter confirming the closure of the corporate bank account, with zero balances is required.
9. Liquidator’s Report & Audit Summary:
   Post the 45-day notice period, your appointed liquidation company needs to submit a final report detailing asset distribution, debt settlement, and closure.
10. License Cancellation and Approval from DED:
    Once all the documents have been submitted and clearances received from different authorities, you need final approval from DED for the cancellation of your business license.

• Fill in the required cancellation form.
• Cancel the firm card at the Ministry of Human Resources and Emiratisation.
• Cancel the foreign partners’ visas sponsored by the company at the respective General
• Directorate of Residency & Foreigners Affairs.
• Collect required approvals from other government bodies to cancel a license.
• Prepare a partnership cancellation contract authenticated by the notary public.
• Submit the above documents and collect license cancellation certificates.

You need to provide:

• A letter from the company or the institution requesting to stop the licensing temporarily
• A letter from the Ministry of Human Resources and Emiratisation indicating the absence of sponsored people on the license
• A report from the inspection division in DED.

Yes, the dissolution of a company can be canceled before the issuance of the payment voucher, as at this stage the liquidation process is not yet finalized, so the company can submit a formal request to DED to withdraw the application. Shareholders may need to pass another resolution to continue operations and cancel any published liquidation notices. However, once the payment voucher is issued or official steps like visa cancellations begin, reversing the process becomes more complex and may require additional approvals or a new license application.

If a company established in one emirate is dissolved but owns a branch in another emirate, the branch must also be closed, as a branch cannot legally exist without its parent company.

• The license expiration date should have been more than 2 years.
• The Emirati partner shall acknowledge his liability towards the company.
• The company needs to provide supporting documents that strengthen the dissolution request such as the escape of a partner.
• The company needs to provide a letter from the Ministry of Human Resources and Emiratisation indicating the absence of sponsored people on the license.

We are a leading provider of company liquidation services, offering all forms of liquidation services including voluntary, compulsory, and court-ordered ones as well. No matter where you are based, in the mainland, free zone, or offshore across the UAE, we at Asad Abbas & Co. can handle liquidation for all businesses.