How to Close a Company in Dubai in 2026: Liquidation, Tax Deregistration and Free Zone Rules

To close a mainland company in Dubai, the shareholders resolve to dissolve it and appoint a liquidator. The liquidator publishes a notice giving creditors 45 days to claim, settles employees, visas and government accounts, and starts VAT deregistration with the Federal Tax Authority (FTA). The Department of Economy and Tourism (DET) then cancels the licence, and the corporate tax deregistration follows on the cancellation documents. Free zone companies follow their own authority’s rules. Expect the process to take months, not weeks.

Owners most often miss the tax step. Corporate tax applies to financial years starting on or after 1 June 2023, so almost every company now holds an FTA registration. A company that stops trading has three months to apply to deregister. Miss that deadline and the penalty is AED 1,000, plus AED 1,000 a month up to AED 10,000. Cancelling the trade licence does not close the tax file.

Liquidation, strike-off or bankruptcy: which one applies to you

Voluntary liquidation is for a company that can pay its debts. A liquidator collects what the company is owed, pays its creditors, returns the surplus to the shareholders and removes the company from the commercial register. This article covers that route.

If the company cannot pay its debts, the process is different and court-supervised, under Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy, in force since 1 May 2024. A third route, strike-off by the registering authority under Articles 310 and 311 of Federal Decree-Law No. 32 of 2021 on Commercial Companies (the Commercial Companies Law), happens to companies that stop trading without closing. It is not a clean exit, as explained below.

If you are moving the business rather than ending it, Federal Decree-Law No. 20 of 2025, in force since 15 October 2025, lets a company transfer its registration between the mainland and a free zone without losing its legal personality. Both authorities’ registration rules must allow the move and both must approve it. Moves to or from DIFC and ADGM need separate Cabinet rules. Check with both authorities whether a transfer would work before liquidating a mainland LLC only to set up again in a free zone.

How to close a company in Dubai mainland: step by step

1. Pass the shareholders’ resolution

Article 302(5) of the Commercial Companies Law allows dissolution by unanimous consent of the partners, unless the memorandum of association sets a different majority. Many memoranda set 75%, the majority needed to amend a memorandum (Article 101). The law itself applies that 75% to a dissolution vote only when losses reach half the capital (Article 308). Read your memorandum before assuming a minority shareholder cannot block the decision. The resolution names the liquidator and the method of liquidation (Article 312(2)) and is notarised before it goes to DET.

2. Appoint a liquidator

Under Article 316, the liquidator cannot be the company’s current auditor or anyone who audited its accounts in the previous five years. In Dubai, DET asks for the liquidator’s acceptance letter, licence and auditor registration certificate, so in practice the liquidator is a registered auditor or audit firm. The appointment is entered in the commercial register and binds third parties only from that date (Article 318). Until then, the managers act as liquidators towards third parties (Article 315), and from dissolution the company’s name carries the words “under liquidation” (Article 21(3)).

3. Register the dissolution and publish the creditor notice

The dissolution is registered with DET and published in two local daily newspapers, one in Arabic (Article 313); DET’s procedure asks for two Arabic newspapers. All the company’s debts fall due on dissolution. The liquidator writes to every known creditor by registered letter and publishes a notice inviting claims (Article 324). The law sets a minimum of 30 days, but for Dubai the government portal u.ae lists a 45-day creditor claim period after the announcement.

4. Settle employees and cancel visas

Pay each employee’s final dues, including end-of-service gratuity, within 14 days of the contract ending (Federal Decree-Law No. 33 of 2021, Article 53). Then cancel the work permits with the Ministry of Human Resources and Emiratisation (MOHRE) and the residence visas with GDRFA in Dubai or ICP elsewhere, and finally the immigration establishment card and the MOHRE establishment file.

5. Collect, sell, pay and clear

The liquidator lists the assets and liabilities (Articles 320 and 321), collects debts, sells assets and pays creditors (Articles 322 and 323). Amounts owed to creditors who do not come forward are deposited with the court treasury (Article 326). In parallel, close the final DEWA bill, the tenancy and Ejari, telecom contracts, any Dubai Customs client code and any permits from other regulators.

6. Deregister for corporate tax and VAT

VAT deregistration runs alongside steps 4 and 5. The corporate tax application usually follows the licence cancellation in step 7, because the FTA asks for the cancellation document. Deadlines are in the next section.

7. Final account, distribution and licence cancellation

The liquidator reports to the shareholders every three months (Article 329) and presents a final account at the end. Once the shareholders approve it, each shareholder first gets back their capital and the balance is shared in proportion to profit shares (Article 333). Within a week of approval, the liquidator publishes a notice in two dailies, one in Arabic, inviting shareholders to collect their entitlements within 21 days (Article 329); unclaimed amounts go to the court treasury (Article 333(1)). Keep the bank account open until the last payment and any tax refund have gone through. The liquidator then files the completion with DET, the licence is cancelled and the company is deleted from the commercial register (Article 330).

Corporate tax and VAT deregistration with the FTA

Corporate tax

Article 52 of Federal Decree-Law No. 47 of 2022 requires a company to deregister when it ceases to be a taxable person, and FTA Decision No. 6 of 2023 sets the deadline at three months from cessation of business, dissolution or liquidation. The FTA will not approve the application until every return is filed and all tax and penalties are paid. That includes a final return covering the period up to the date the company stops. Corporate tax returns are normally due nine months after the end of the tax period (Article 53 of the Corporate Tax Law), but a closing company should file the final return with, or soon after, the deregistration application, because the FTA will not finish deregistration without it.

The application is made on EmaraTax and is free. The FTA’s service page gives a processing time of 40 working days from a complete file, and up to another 40 if the FTA asks for more information. You will upload the licence cancellation document and financial statements up to and including the licence cancellation date. Under Cabinet Decision No. 75 of 2023, a late application costs AED 1,000, then AED 1,000 each month up to AED 10,000. A company that elected Small Business Relief still files a final return and deregisters. See our note on corporate tax registration.

VAT

Apply within 20 business days of the date the obligation arose, for example when the company stops making taxable supplies (Article 14(1) of the VAT Executive Regulation, Cabinet Decision No. 52 of 2017). The FTA’s service page, updated in September 2026, now says 30 business days, but the regulation has not been amended, and the late deregistration penalty runs from the legal deadline. Use 20. The final VAT return and payment are due within 28 days of the effective date of deregistration. Late deregistration costs AED 1,000, then AED 1,000 a month up to AED 10,000; Cabinet Decision No. 129 of 2025, which revised tax penalties from 14 April 2026, left that figure unchanged. The FTA lists the liquidation letter, the board resolution and the licence cancellation certificate among the supporting documents.

How to close a free zone company

A free zone company is wound up under its free zone’s own regulations, not through DET. The FTA steps above still apply in full.

Take DMCC. Its winding-up guidance notes (version 5, September 2026) set out four modes: summary winding-up, where the directors declare the company can be wound up within six months; solvent winding-up, within twelve months; insolvent voluntary winding-up, with a creditors’ committee of three to five members; and involuntary winding-up by the court on a petition from the DMCC Registrar.

A DMCC company must appoint a liquidator from DMCC’s published list of approved auditors, and the directors sign a declaration of solvency for the summary and solvent routes. The company applies on the DMCC portal and cancels all DMCC visas, access cards and permits. DMCC publishes the notice for 14 calendar days, the liquidator files the final report, and DMCC issues an e-termination letter. Corporate shareholders also need a board resolution and a recent certificate of incumbency, notarised and legalised.

IFZA, JAFZA and the other free zones run their own procedures, approved liquidator lists and fees. DIFC and ADGM are common law jurisdictions with their own insolvency rules, such as the DIFC Insolvency Law (DIFC Law No. 1 of 2019). ADGM also allows strike-off for a company that has not traded, changed its name or disposed of property in the last three months, with a public notice period of two or three months depending on the route.

Dormant company, licence freeze or strike-off

If you might restart the business, you can keep the company dormant, but you still renew the licence and file corporate tax returns. DET and several free zones also offer a licence freeze or suspension. Conditions differ by authority, and a freeze does not stop FTA filings.

Strike-off by the authority is another matter. Under Article 311, an authority that finds a company has stopped trading can suspend its registration and delete it after three years of suspension. Under Article 310, it can give the company three months’ notice of strike-off and then refer it to court for liquidation. Article 310(3) keeps managers, shareholders and partners liable as if the company had never been dissolved, so a strike-off does not protect the people behind it.

What happens if you just walk away

The licence expires and renewal fines build up. FTA penalties for late deregistration and unfiled returns keep running. Employees on the establishment card remain the company’s responsibility, and unpaid dues turn into MOHRE complaints and labour claims. Creditors can sue. Where a manager or shareholder is personally liable, for example under Article 310(3) after a strike-off, as a guarantor or as the signatory of a bounced cheque, enforcement can reach them personally, including a travel ban ordered by the court under the Civil Procedure Law (Federal Decree-Law No. 42 of 2022). The owner of a one-person LLC who liquidates it or stops its activity early in bad faith is personally liable for its debts (Article 306(2)).

A proper liquidation also starts a clock. Under Article 334, claims against the liquidator over the liquidation are time-barred three years after completion is entered in the commercial register. For managers and shareholders, the three years run from the act that created liability, unless it is a crime.

Common mistakes when closing a company in Dubai

1. Assuming the licence cancellation closes the tax file. DET does not deregister you with the FTA.
2. Relying on a 75% majority without reading the memorandum. The default in Article 302(5) is unanimity unless the memorandum or Article 308 says otherwise.
3. Appointing the company’s own auditor as liquidator, which Article 316 bars for five years after the last audit.
4. Closing the bank account early, leaving nowhere to receive refunds or pay the last invoices.
5. Cancelling visas before final dues are paid, which invites labour complaints that hold up the file.
6. Forgetting the customs code or a regulator’s permit until it shows up as a missing clearance.
7. For Spanish and other foreign parents, leaving the paperwork to the end. Resolutions and powers of attorney signed abroad must be notarised and legalised for use in the UAE, and closing the subsidiary can have tax effects for the parent at home. See our guide for Spanish companies in the UAE and speak to the Spanish Tax Desk before the final distribution.

What to do now

1. Confirm the company is solvent. If it is not, take advice under Federal Decree-Law No. 51 of 2023 first.
2. Read the memorandum of association for the dissolution majority and any liquidation clause.
3. Fix the date the business stops trading. The three-month corporate tax deadline runs from the earliest of the business stopping, the dissolution resolution or the start of liquidation, so diarise it from whichever comes first.
4. Choose a liquidator who has not audited the company in the past five years and is accepted by your authority.
5. List every employee, visa, lease, utility, permit and customs code, and give each one an owner.

Frequently asked questions

How long does it take to close a company in Dubai?

For a mainland LLC, the 45-day creditor period is the floor. With clearances, FTA processing and the final DET filing, a clean closure takes a few months. DMCC’s summary route is designed to finish within six months, with a 14-day publication period.

Can I close my Dubai company from abroad?

Yes. Shareholders can sign a power of attorney that specifically authorises the winding up, notarised and legalised for use in the UAE.

Do I need to deregister for corporate tax if the company never traded?

If it is registered with the FTA, yes. The application is due within three months of cessation, and the FTA expects every return to be filed first.

What happens to employees’ visas when the company closes?

The company pays final dues within 14 days of each contract ending, then cancels work permits and residence visas. Employees move to a new sponsor or leave the UAE.

Can I cancel a trade licence without liquidating the company?

Not for an LLC. DET cancels the licence only after the liquidation is complete. A sole establishment has a simpler cancellation without a liquidator, but must still clear employees, visas and tax.

How Rubert & Partners can help

Our corporate team advises shareholders on whether to liquidate, freeze or transfer a company. We draft the resolutions and powers of attorney and coordinate the liquidator and DET or the free zone, and work with your tax agent on the FTA filings, with the Spanish Tax Desk involved where the parent company is in Spain. We advise in Spanish, English, French and Arabic. Contact us to review your company’s position before you set a closing date.

This article is general information, not legal advice.