How to Liquidate a Company in Dubai: Mainland and Free Zone Steps

To liquidate a company in Dubai, the shareholders resolve to dissolve it and appoint a liquidator, the liquidator notifies creditors and settles the company’s affairs, visas and permits are cancelled, the licence is cancelled, and the company is deregistered for VAT and corporate tax. The order and the notice periods depend on whether the company is on the mainland or in a free zone. This guide covers both.

Why letting the licence lapse is not enough

A company that stops renewing its licence still exists. Fines for non-renewal keep building, it stays registered for VAT and corporate tax, and its returns are still due. On the Dubai mainland, if the licence has been expired for more than two years, the local partner must give an undertaking for the company’s debts before it can be cancelled. Voluntary liquidation is the clean way out.

Dubai mainland: the steps

1. Shareholders’ resolution. The general assembly or partners resolve to dissolve the company and name the liquidator. The minutes are notarised.
2. Liquidator’s acceptance. The liquidator submits a letter accepting the appointment with its licence, its auditor registration certificate and a notarised signature specimen. In practice the liquidator is a registered auditing firm.
3. Dissolution certificate. The authority issues a certificate of dissolution and appointment of the liquidator.
4. Newspaper notice. The liquidation notice runs in two local Arabic newspapers, once. Creditors then have 45 days to submit claims to the liquidator.
5. Clearances. Labour cards are cancelled with the Ministry of Human Resources and Emiratisation, employee visas are cancelled, and the lease, utilities and bank accounts are closed.
6. Final report and cancellation. The liquidator submits the newspaper notice, the company’s final report and a declaration that no objections were received within the 45 days. The licence is then cancelled.
7. Establishment card and tax. The establishment card is cancelled with the federal immigration authority once the licence is cancelled, and the company deregisters for VAT and corporate tax.

Free zones: how the main ones differ

Each free zone runs its own deregistration process. The common thread is a shareholders’ resolution, visa cancellations, settled debts, clearances and a final deregistration certificate. The details differ:

Other free zones, such as IFZA, DSO, SAIF Zone, SPC and Meydan, have their own forms and checklists. See our free zone pages for the zone your company is licensed in.

Tax deregistration deadlines

• VAT: apply to deregister within 30 business days of the obligation arising, for example once the company stops making taxable supplies. The final VAT return and payment are due within 28 days of the deregistration date. The Federal Tax Authority processes complete applications in 30 business days.
• Corporate tax: apply within 3 months of the company’s dissolution or liquidation. The Federal Tax Authority asks for the licence cancellation document and financial statements up to the cancellation date, and processes complete applications in 40 working days.
• Fines: late deregistration is fined AED 1,000, then monthly, up to AED 10,000, separately for VAT and for corporate tax.

How long it takes

On the Dubai mainland the 45-day creditor period sets the pace, so two to four months from resolution to cancelled licence is typical when the records are in order. Free zones can be faster: JAFZA states 21 working days and RAKEZ 5 working days for processing, once everything is submitted. Tax deregistration then follows. Missing documents, unpaid fines and employees still on visas are what usually cause delays.

Getting help

Quick Ashford Auditing of Accounts L.L.C. acts on voluntary liquidations of mainland and free zone companies, from the resolution to the final tax deregistration. See our company liquidation services.