Company Deregistration in the UAE: Steps, Documents and Tax

Company deregistration is the formal process of closing a business and cancelling its registration with the relevant licensing authority. The exact requirements depend on where the company is established, such as the mainland, a free zone or another jurisdiction. For many businesses, deregistration also involves separate tax and visa-related processes. Cancelling the trade license alone does not automatically end every obligation the company may have.

A company may choose or need to deregister for several reasons, including: 

• The business is no longer commercially viable. 

• The owners are changing their business strategy. 

• A project or venture has reached its planned end. 

• The company is being restructured, merged or replaced by another entity. 

• The owners are permanently exiting the UAE market. 

• The business can no longer justify maintaining its license and ongoing compliance costs. 

The reason for closure can affect the documents and approvals required, so businesses should establish their closure route before beginning the process.

While requirements differ between authorities, the process generally involves the following steps.

1. Decide to close the company

The shareholders or authorized decision-makers must formally approve the closure. Depending on the legal structure, this may involve a shareholder or board resolution and, in some cases, notarization. 

The resolution should clearly document the decision to dissolve or liquidate the company and authorize the relevant person to complete the process.

2. Settle outstanding obligations

Before closing the business, outstanding financial and operational obligations should be reviewed and settled. These may include: 

• Supplier and creditor payments 

• Employee salaries and end-of-service benefits 

• Office rent and utility bills 

• Government fees and penalties 

• Outstanding loans or other liabilities 

If the company has assets or debts, a formal liquidation process and the appointment of a liquidator may also be required.

3. Cancel the trade license

The next step is to apply for license cancellation with the relevant licensing authority. For mainland companies, this is handled by the applicable emirate's economic department. Free zone businesses must follow the procedures of their respective free zone authority. Requirements can vary considerably. Some authorities may require a liquidation report, audit documents, clearance letters or proof that the company's office and employee-related obligations have been closed.

4. Cancel employee and dependent visas

Companies sponsoring employees or dependants must complete the relevant visa and immigration cancellations. Employee-related obligations should also be settled before closure, including salaries and applicable end-of-service benefits.

5. Complete tax deregistration

Closing the company does not automatically cancel its tax registrations. Businesses registered for UAE Corporate Tax may need to submit a deregistration application to the Federal Tax Authority (FTA) through EmaraTax. The FTA requires the relevant tax returns to be filed, and Corporate Tax liabilities and administrative penalties to be settled before deregistration can be completed. For Corporate Tax, a deregistration application generally needs to be submitted within three months of the relevant triggering event, such as cessation of the business, dissolution or liquidation. Failure to submit within the prescribed timeline can result in an administrative penalty starting at AED 1,000, with further monthly penalties up to AED 10,000. 

VAT-registered businesses have a separate deregistration process. Where mandatory deregistration applies, the application must generally be submitted within 20 business days of the deregistration obligation arising. The FTA currently estimates 20 business days to process a completed VAT deregistration application. This means Corporate Tax deregistration and VAT deregistration should not be treated as the same process.

The exact documentation depends on the company's jurisdiction and legal structure. Common requirements may include: 

• Shareholder or board resolution 

• Trade licence and corporate documents 

• Licence cancellation or liquidation documents 

• Liquidator's report or certificate, where applicable 

• Tax-related documents and final returns 

• Clearance or no-objection certificates 

• Evidence of employee and visa cancellation 

• Proof that outstanding government fees or penalties have been settled 

Businesses should confirm the requirements directly with their licensing authority before submitting an application.

Once the relevant authority approves the closure, the company receives confirmation that its licence or registration has been cancelled. Tax deregistration is a separate step, and FTA approval confirms that the business has been removed from the relevant tax register. Importantly, closure does not necessarily mean that all record-keeping responsibilities disappear. Businesses should retain financial and tax records for the required statutory period and ensure that final returns and supporting documents remain accessible.

Shutting down a business is more than deciding not to renew the license. There are still a few things to take care of before the company can officially come to an end, including outstanding liabilities, employee and visa formalities, tax filings and deregistration. Getting these steps right can save you from dealing with penalties or compliance issues long after you've stopped doing business. With Kitaab, you can get support across the company deregistration process, including the financial and tax formalities involved in closing your UAE business. We help you take care of the details, so you can close your company with confidence and focus on what's next.