One of the UAE government’s primary focuses is driving economic growth in the country and supporting businesses. Expats from all corners of the globe continue on moving to Dubai and other emirates hoping to find greener pastures. There’s a number of opportunities that can be sought in the region, which is why local and foreign investors establish and operate successful businesses.
However, it is a fact that only a few businesses last after a certain number of years. Businesses eventually have to close down and there is a couple of paperwork and documentation that are required to complete the process. It is important for a business considering of closing down to close the establishment smoothly and as per government regulations in order to avoid getting fines and administrative penalties.
Also Read: What happens to employees when a business closes in UAE
How to Close a Business
The basic steps that are to be taken by business owners in order to close down different types of businesses are nearly the same with a couple of variations, which depend on the jurisdiction of the business and the kind of business that was run.
Closing a Sole Proprietorship Business
- Fill in the licensing and registration cancellation application form from the approved channels
- Submit a copy of the trade license
- Cancel the MOHRE-issued establishment card
- Collect all approvals required depending on the activities of the business
- Submit the requirements via an approved channel and collect a license cancellation certificate from the authorities
Closing a Company Branch
- Fill in the cancellation application form for the licenses and registration of the business from an approved channel
- Submit an attested resolution of the board of directors which states the intent of canceling the company branch
- Cancel the MOHRE-issued establishment card
- Collect the approvals for cancellation of business activities
- Secure the approval of the UAE Ministry of Economy (MOE) for the cancellation of a foreign company branch
- Submit all requirements via an approved channel and don’t forget to collect a certificate of license cancellation
Closing Civil Works Companies
- Fill in the form for registration and licensing cancellation via an approved channel
- Collect all approvals of authorities in ceasing business activities
- Cancel visas of foreign partners that were sponsored by the business to be closed down
- Cancel the company’s establishment card which was issued by the UAE MOHRE
- Prepare a contract of partnership cancellation
- Have the cancellation contract for partnership attested by a public notary in UAE
- Submit the documents required by the authorities through an approved channel and secure a copy of the certificate for license cancellation
Also Read: Steps To Renew a Trade License in UAE
Closing all Kinds of Businesses in Dubai and the Rest of the UAE
Phase #1: Appointment of a Company Liquidator
- Prepare a copy of the minutes of the meeting of the shareholders which confirms the intent of the business to liquidate the company. The minutes of the meeting has to be notarized by a public notary in UAE. In addition, there has to be a notice of liquidator appointment.
- Secure a letter that’s issued by the appointed liquidator that states the expert accepting the task of liquidating the business. The letter also has to include the credentials of the liquidator (registration certificate of auditor, business license copy, notarized signature)
- Fill in the licensing and registration cancellation application form and make sure the documents are sent to an approval channel
- A DED legal advisor will be reviewing the submitted requirements and will have the discretion in approving company dissolution documents as well as the appointment of the liquidator
- Payment voucher will then be issued for the dissolution of the company and the appointment of the liquidator. Post payment of fees for company dissolution documents would be issued for the business.
- The business has to publish a liquidation notice in local newspapers in order to provide the public notice regarding the liquidation of the company and a period of forty-five days wherein complaints or claims may be submitted.
Phase #2: Removal of Business from the Registry
- Prepare a letter of declaration from the appointed liquidator and company shareholders indicating no objection from third parties during the dissolution announcement and period given with a duration of forty-five days
- Prepare the final report of the business
- Cancel the MOHRE-issued establishment card
- Cancel the visas of all foreign partners that were sponsored by the business
- Collect the specific approvals needed for the business to close down depending on its business operations
- Seek the decision of the MOE in the cancellation of the license of the company
- Secure the decision of the authority in securities and commodities for the license cancellation of the company, in the case of a public shareholding company
- Submit all documents through an approved channel and settle deregistration fees
There is a lot of work and documentation that’s required for businesses to close down in the UAE. Company deregistration in UAE can be complicated but our experts here in FAR Consulting Middle East can be of help. Call us today for a consultation.
