Company License Cancellation in UAE
When a business in the UAE reaches a turning point—whether through closure, restructuring, or relocation—it’s crucial to follow the legal exit procedures. Company License Cancellation is the formal process through which a business owner withdraws the company’s trade license from the issuing authority. This may be the Department of Economy and Tourism (DED) for mainland entities, the specific Free Zone Authority, or an Offshore Authority if registered offshore.
The cancellation step ensures that the company no longer incurs renewal charges, fines, or future liabilities. It also protects your compliance history and reputation for future business activities.
Mubarak Al Ketbi (MAK) Auditing provides complete assistance for license cancellation across all UAE jurisdictions—Mainland, Free Zone, and Offshore. Our specialists manage the full process, from documentation to final government clearance, guaranteeing that the closure is done cleanly, efficiently, and without hidden liabilities.
What Is Company License Cancellation?
Company license cancellation is the official deregistration of your business license with the relevant UAE authority. Once completed, the business is legally closed, and no further commercial or financial obligations exist under that license.
Cancellation Types
- Mainland Companies: Processed through the Department of Economy and Tourism (DED).
- Free Zone Companies: Managed directly with the Free Zone Authority under which your firm is registered.
- Offshore Companies: Conducted with the Offshore Registrar or onshore regulatory body.
Failing to cancel properly means your firm continues to accumulate renewal fees and penalties—even if you’ve stopped operations.
Why Legal Cancellation Matters
Some owners mistakenly assume that not renewing a license is enough. However, skipping formal cancellation can lead to significant complications.
Consequences of Inactivity
- Financial Burden: Renewal fees and late penalties continue to accrue.
- Regulatory Non-Compliance: Violations may affect your immigration record and future ventures.
- Reputation Risk: Banks and authorities may flag your business record as non-compliant.
A proper cancellation, on the other hand, provides a clean break from liabilities and demonstrates your professionalism and financial responsibility.
When Should You Cancel Your License?
You should proceed with company license cancellation in these common cases:
- Business Closure: Operations have stopped permanently.
- Restructuring: The company is merging or changing its structure.
- Completion of Projects: No new projects remain active.
- Financial Constraints: Costs of maintaining the entity are unsustainable.
- Relocation: Operations are moving to another emirate or country.
By canceling at the right time, you avoid penalties and protect future corporate credibility.
Reasons Behind License Cancellation
| Reason | Explanation |
|---|---|
| Business Closure / Restructuring | Ending current operations or merging with another company. |
| Expired Contracts / Finished Projects | Company purpose fulfilled; no further activity required. |
| Financial Constraints | Inability to meet ongoing compliance or rental expenses. |
| Jurisdiction Shift | Moving to a different emirate or international setup. |
Types of Company License Cancellation
- Mainland License Cancellation – Processed through DED and involves clearances from labor, immigration, and tax departments.
- Free Zone License Cancellation – Coordinated directly with your Free Zone’s governing body.
- Offshore License Cancellation – Executed via the respective offshore registrar or authority that issued the license.
Each type follows specific steps, timelines, and costs depending on the authority’s requirements.
Step-by-Step Process of License Cancellation in the UAE
Step 1: Board Resolution & Shareholder Approval
A formal board resolution must be drafted and signed by all shareholders approving the company’s closure.
Step 2: Liability Clearance
Before cancellation, all dues must be cleared:
- Employee end-of-service benefits
- Supplier and customer settlements
- Corporate Tax & VAT filing with FTA
- Loan and lease terminations
Step 3: Filing the Application
Submit the cancellation request via the relevant authority portal (DED, Free Zone, or Offshore). Attach required documents.
Step 4: Departmental Clearances
Obtain No-Objection Certificates (NOCs) from:
- Immigration Department
- Ministry of Human Resources & Emiratisation (MoHRE)
- Utilities & Municipality
- Bank and Landlord
Step 5: Final Approval & Certificate
Once verified, you’ll receive an official license cancellation certificate confirming that your company is legally closed in the UAE.
Documents Required for License Cancellation
- Trade License Copy
- Shareholder Resolution Approving Cancellation
- Clearance Letters (from Labor, Immigration, and Utilities)
- Bank Closure Certificate
- NOC from Landlord and Authorities
- Final Audit or Liquidation Report (if applicable)
All documents must be properly attested, stamped, and translated into Arabic if required by the issuing authority.
Costs & Timelines
| Type | Estimated Fee (AED) | Average Duration |
|---|---|---|
| Mainland Company | 5,000 – 10,000 | 15 – 30 days |
| Free Zone Company | 2,500 – 7,500 | 7 – 20 days |
| Offshore Company | 4,000 – 8,000 | 10 – 25 days |
Delays in filing or missing clearances may extend the timeline. Early preparation helps you avoid fines or rejections.
Penalties for Non-Cancellation
- License Renewal Fees: Continue to apply annually.
- Late Payment Fines: Accumulate monthly with interest.
- Immigration Holds: Potential travel bans for shareholders.
- Company Blacklisting: Affects any future business setup attempts.
Proper cancellation prevents all these issues and ensures a clean compliance record.
Benefits of Proper License Cancellation
- No Pending Fines or Liabilities
- Positive Compliance Record with UAE authorities
- Future Eligibility for new licenses or visa sponsorships
- Smooth Business Closure with documented proof
- Professional Reputation for directors and shareholders
Leaving the market properly also protects investors from future legal exposure or disputes.
How Professional Assistance Simplifies the Process
Canceling a license involves several departments, legal documents, and attestations. A single mistake can delay the process or add penalties.
By engaging Mubarak Al Ketbi (MAK) Auditing, you receive:
- Accurate Documentation: Every form and resolution prepared correctly.
- Legal Coordination: Direct communication with all UAE authorities.
- Faster Processing: Reduced waiting times through our expertise.
- Compliance Guarantee: Adherence to labor, tax, and immigration laws.
- Cost Efficiency: Transparent pricing with no hidden fees.
Our professionals handle every step—from audit clearances to certificate collection—so you can close operations confidently.
Role of Audit & Tax Clearance in License Cancellation
Before issuing the final certificate, authorities verify your company’s financial standing.
Mubarak Al Ketbi (MAK) Auditing conducts statutory audits, tax reconciliations, and financial settlements required by the Federal Tax Authority. This ensures your business exits the UAE market without any tax or accounting liabilities.
Clearance Steps Include:
- Final VAT filing
- Corporate Tax return submission
- Zakat or other dues settlement (if applicable)
- Submission of the liquidation report
Maintaining Compliance During Cancellation
Even while closing, companies must remain compliant. Follow these rules:
- Submit all required documents within deadlines.
- Notify employees in accordance with labor law.
- Maintain record retention for at least five years.
- Ensure the company bank account stays active until closure is approved.
These steps help complete the process without legal disputes or rejected applications.
Free Zone vs. Mainland: Key Differences
| Aspect | Mainland | Free Zone |
|---|---|---|
| Authority | DED | Free Zone Authority |
| Visa Clearances | MoHRE + Immigration | Free Zone Labor Dept |
| Audit/Liquidation Report | Mandatory | Sometimes Optional |
| Timeline | 3–4 weeks | 1–2 weeks |
Regardless of jurisdiction, Mubarak Al Ketbi (MAK) Auditing ensures all conditions are met efficiently.
Tips for a Smooth Cancellation
- Begin the process 60 days before license expiry.
- Ensure employee visas and labor cards are canceled first.
- Close company bank accounts and settle utilities.
- Retain copies of every clearance certificate.
- Hire a licensed consultant to avoid administrative errors.
Preparation saves both time and cost during the final closure.
Why Choose Mubarak Al Ketbi (MAK) Auditing
With years of UAE experience, Mubarak Al Ketbi (MAK) Auditing has guided countless businesses through license cancellations, liquidations, and audits.
Our Specialized Support Includes
- Expert coordination with all UAE authorities
- Preparation of board resolutions and clearance requests
- Handling of VAT & Corporate Tax filings
- Drafting final liquidation reports
- Real-time progress updates and document tracking
We take the stress out of cancellation so that you can focus on your next venture.
What Can Help – Mubarak Al Ketbi (MAK) Auditing
Closing a company may seem challenging, but with proper guidance, it becomes smooth and straightforward. Mubarak Al Ketbi (MAK) Auditing assists clients in completing every step—accurately, legally, and efficiently. Our experience across different jurisdictions ensures compliance at every stage.
Our experts manage documentation, coordinate with government entities, and obtain the final certificate without delay. Remember, “a stitch in time saves nine,” and timely action can prevent costly problems later.
For More Information
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Contact / WhatsApp: +971 50 276 2132
- Geo Coordinates: 25.2807189480206, 55.41846458517048
