Regulatory Compliance
Cancelling your trade license officially notifies Dubai’s authorities that your business has ceased operations. It ensures you remain compliant with local laws and avoid unwanted legal entanglements.
Cost Savings
Terminating the license stops the accrual of renewal fees and other recurring administrative expenses. This step helps you save money by eliminating charges for an inactive business.
Accurate Official Records
The cancellation updates government records to accurately reflect your business status. This clarity prevents potential confusion or misuse of your business credentials in the future.
Liability Protection
Closing your license shields you from future legal and financial obligations tied to an active business. It minimizes risks and protects you from unforeseen liabilities once your operations end.
Reputational Management
An outdated license can harm your business image if it’s mistakenly used to imply ongoing operations. Proper cancellation upholds your reputation by showing responsible closure and record-keeping.
Types of Trade License Cancellation in Dubai
There are two main categories of trade license cancellations depending on your company type:
Mainland Companies
Free Zone Companies
Companies in free zones must cancel their license with the relevant free zone authority.
Step-by-Step Process to Cancel a Trade License in Dubai
The procedure for canceling a trade license involves several steps, depending on whether your company operates in the mainland or a free zone. Below is a detailed breakdown:
Resolution and Approval
- For Mainland Companies: Shareholders must pass a resolution to liquidate the company. This resolution needs to be notarized.
- For Free Zone Companies: Submit a resolution to the relevant free zone authority as per their requirements.
Appoint a Liquidator (If Required)
- Appoint a certified liquidator who will handle the company’s financial audits, asset liquidation, and prepare a final liquidation report.
- This step is mandatory for mainland companies and some free zones.
Clear All Financial Obligations
- Bank Accounts: Close corporate bank accounts and obtain a clearance letter from the bank.
- VAT Deregistration: Deregister the company from VAT with the Federal Tax Authority (FTA) and settle any outstanding VAT liabilities.
- Employee Dues: Clear all employee salaries, gratuities, and end-of-service benefits.
Cancel Employee Visas and Immigration Clearances
- Cancel all visas issued under the company, including those for employees, partners, and dependents.
- Obtain immigration clearance certificates.
Notify Relevant Authorities
- Mainland Companies:
Submit a notice to the Dubai Department of Economic Development (DED) to inform them of the liquidation. - Free Zone Companies:
Notify the respective free zone authority as per their rules.
Publish a Liquidation Notice (For Mainland Companies Only)
- Publish a liquidation notice in two Arabic newspapers.
- Allow a mandatory 45-day period for creditors to submit claims.
Obtain Clearance Certificates
- Secure clearance certificates from various departments such as:
- Dubai Customs (if applicable).
- Ministry of Human Resources and Emiratisation (MOHRE).
- Utilities providers like DEWA (Dubai Electricity and Water Authority).
- Any other relevant authorities.
Settle Liabilities and Submit Final Reports
- Resolve all outstanding liabilities, including debts to creditors and suppliers.
- Submit the final liquidation report (prepared by the liquidator) to the relevant authority.
Cancel Trade License
- For Mainland Companies:
Submit all required documents to the DED to cancel the trade license. Once approved, you will receive the Certificate of Liquidation. - For Free Zone Companies:
Submit documents to the free zone authority, which will issue the license cancellation certificate.
Documents Required to Cancel a Trade License
Here’s a list of documents typically required for the process:
- Original trade license.
- Memorandum of Association (MOA).
- Shareholders’ resolution to liquidate (notarized).
- Final audit report (if applicable).
- Clearance certificates from:
- Banks
- Utilities (DEWA)
- Customs
- Immigration
- VAT deregistration confirmation from the FTA.
- Liquidator appointment letter and report.
- Employee clearance letters.
Cost of Canceling a Trade License in Dubai
- Notarization fees for resolutions.
- Liquidator fees.
- Publishing fees for liquidation notices (for mainland companies).
- Government fees for obtaining clearance certificates.
For an accurate cost estimate, it’s recommended to consult with a professional liquidation service provider.
How Long Does It Take to Cancel a Trade License?
The process generally takes between 1 to 3 months. The timeline depends on the complexity of the company, the time required to clear liabilities, and the specific authority managing the cancellation.
Why Choose Capital Plus for Trade License Cancellation?
Capital Plus offers hassle-free trade license cancellation in Dubai with deep local expertise and streamlined processes.
Deep Local Expertise
Capital Plus has a thorough understanding of Dubai’s regulatory landscape, ensuring a smooth cancellation process. Their expertise minimizes errors and streamlines compliance.
Efficient, Streamlined Process
They manage all documentation and liaise with authorities on your behalf. This efficiency saves you time and reduces administrative hassles.
Transparent Pricing
Capital Plus offers clear, competitive fees with no hidden charges. Their straightforward approach ensures you know exactly what to expect financially.
Personalized Customer Support
They tailor their services to meet the unique needs of each business. Dedicated support means you receive guidance every step of the way.
(FAQs)
Failing to cancel your trade license can lead to fines, penalties, and legal complications.
Yes, but all debts must be resolved or negotiated with creditors before the cancellation process can proceed.
Yes, companies must deregister from VAT and settle any outstanding VAT liabilities before the license can be canceled.
For some small businesses or free zone companies, liquidators may not be required. However, for mainland companies, a liquidator is mandatory.
Reinstatement is possible in certain cases but requires approval from the relevant authorities and payment of any applicable fines or fees
Conclusion
If you’re looking to cancel your trade license in Dubai, let the experts at Capital Plus Auditing of Accounts handle the process for you. From legal compliance to financial settlements, we manage everything so you can close your business stress-free.
