If any business registered in the UAE, wishes to cancel their License and liquidate the company, they have to receive the cancellation certificate from the relevant authority. In case of Non-Renewal of License, the relevant authority will initiate the trade license cancellation and De-registration as per Licensing Regulations. Any entity that is established or going through the company liquidation process has to follow cancellation steps to get the legal work done regarding their licenses. The company liquidation procedure depends upon the type of the company. In this article, we have streamlined some major licenses active in the UAE and how to Cancel Trade Licenses in Dubai
- Trade license: This will cover all trading activities
- Industrial license: For manufacturing and industrial working
- Service license: doctors and lawyers
What is a Trade License?
Trade license is a document that is provided by the UAE government with the help of which businesses are permitted to operate legally. It defines the kind of business that a firm is capable of conducting i.e. either commercial, professional or industrial.
Significance of Trade License.
Businesses can not operate in the absence of a valid trade license. It is the basis of contracts, banking operations and employee recruitment. Validity of the trade license will guarantee that the UAE laws and regulations are adhered to. Failure to comply attracts fines, litigation and reputation loss. This is why it is equally important to cancel your license in case you stopped operations, not letting it run out or not taking care of it.
Why Cancel a Trade License?
Cancelling your Dubai trade license is a legal requirement when you decide to cease your business operations in the UAE. Failing to cancel your license properly can lead to penalties, fines, and renewal fees, even if your business is no longer active.
Typical Causes of Cancellation of a License.
- Loss of profits – Companies that are not making their profits may opt to determine.
- Lack of financing – On-going expenditures that do not yield result may compel the liquidation process.
- Economic uncertainties – Economy Global or local market changes can affect sustainability.
- Permanent business closure – Entrepreneurs closing down of businesses.
- Merger or restructuring – Businesses joining up or reorganizing.
- Avoiding penalties – Eliminating penalties of both lapsed and dormant licenses.
- Obsolete license – Companies no longer doing any licensed business.
Business Lifecycle Structural Importance.
Cancelling a trade license is not only about shutting down but it is about responsible management of your companies lifecycle.
- Company changes or shareholding – The change in shareholding or company can be considered as needing to cancel and start anew under different conditions.
- Cessation of operation – Businesses which are no longer in operation should be closed.
- Restructuring is available – The companies have the option of cancelling old licenses in an attempt to restructure themselves in a more efficient manner.
Types of Trade License Cancellation in Dubai
There are two main ways to cancel your license:
1️⃣ Instant License Cancellation:
For sole establishments with no employees and no liabilities.
2️⃣ Standard License Cancellation:
For LLCs, civil companies, or companies with employees and assets requiring clearance from government entities before cancellation.
Enquire Now
Step-by-Step Process to Cancel Trade License in Dubai
1️⃣ Board Resolution and Shareholder Approval
For LLCs, prepare and notarize a board resolution confirming the decision to liquidate and cancel the trade license.
2️⃣ Appoint a Liquidator
For LLCs, a registered liquidator must be appointed, and a liquidation certificate must be obtained.
3️⃣ Apply for Initial Cancellation at DED
Submit your cancellation request with the Department of Economy and Tourism (DET, formerly DED) in Dubai with initial approval documents.
4️⃣ Place Newspaper Advertisement
Publish a liquidation notice in two local newspapers (one in Arabic and one in English) to announce the company closure, allowing creditors 45 days to raise claims.
5️⃣ Obtain Clearance Certificates
You must obtain clearance certificates from:
-
Dubai Electricity and Water Authority (DEWA)
-
Etisalat / Du
-
Dubai Customs
-
Ministry of Human Resources and Emiratisation (MOHRE)
-
Immigration Department
-
Bank clearance for company accounts
6️⃣ Submit Final Documents to DED
After the 45-day period, submit:
-
Clearance certificates
-
Liquidator’s final report
-
Original trade license
-
Memorandum of Association
-
Passport copies of all shareholders
7️⃣ Pay Fees and Receive Cancellation Certificate
Pay the cancellation fee, and DED will issue the Trade License Cancellation Certificate to confirm your company closure.
Trade License Cancellation Cost in Dubai
| License Cancellation Cost | AED 1,020 |
| Company Dissolution Cost | AED 2,520 |
In Dubai, company liquidation involves certain financial obligations. The process incurs two primary fees. Firstly, the license cancellation fee, amounting to AED 1,020, covers administrative expenses and processing. Secondly, there’s the company dissolution fee, totaling AED 2,520, encompassing the formal dissolution procedures and documentation.
These costs are integral considerations for businesses navigating the regulatory landscape of Dubai, ensuring a smooth and compliant closure of operations when necessary.
Significance of Cancellation of Trade License.
Legal & Doc. Importance.
According to the UAE, any business that intends to be closed must cancel its trade license formally before shutting down in either the mainland or a free zone. This involves: Clearances of other concerned government agencies (such as DED, free zone authorities, or ministries).
Laying of legal documents like board resolutions, clearances and final audit reports.
To avoid fines make sure that your trade license is valid until the time of cancellation.
Economic & Cost-Relevance of significance.
Terminating a license is a costly exercise. These may include:
- DED fee of canceling in Dubai.
- Liquidation services should theory be in case of liquidation of a company.
- Legal administrative costs.
- Penalties and the fines that were accumulated in case the process was not timely.
- Bank and financial liabilities including closing of accounts.
- Clearance of tax and audit to ensure that all the liabilities are clear.
Business Risk Management and Protection.
Effective cancellation helps in saving your reputation and helps in protecting against future liabilities.
- Protection of liability- It avoids pursuit by creditors or the government in future.
- Safeguarding your credit report – Guarantees that your financial performance stays unscathed.
- Reputational management – Prevents negative impressions on the future ventures.
- Stopping misuse of trade name – Ensures that your business name is not used.
- Precise government documents – Maintains your business position with the government.
Documents Required for Trade License Cancellation in Dubai
-
Original trade license
-
Passport copies of shareholders
-
Board resolution (for LLCs)
-
Clearance letters from utilities, banks, and government departments
-
Liquidator’s report (for LLCs)
-
Advertisement copy from newspapers
Freeze Trade License
Dubai has launched a facility that may allow freezing the license for a limited period (can be from one year to three years). During this period, companies’ trade licenses can be frozen (stop all company activities). This is possible only when there are no more employees in the company and no legal action against the company at present. But Creditors still can claim against the frozen company.
Timeline to Cancel a trade license in UAE
The UAE has an average of 30 to 60 days of trade license cancellation. Nevertheless, in certain occasions it can be done in 1 to 3 weeks provided documentation is correct and authorities act within very short time.
MOHRE Mandatory Processes
Before cancellation, the Ministry of Human Resources and Emiratization (MOHRE) has the following steps that are obligatory:
- Labor clearance – Paying out employee contract and dues.
- Visa Cancellation: Clearance Cancelling employee and partner visas.
- NOC requirements- No-object certificates where applicable.
Administrative Steps
- Presentation of manual records to governments.
- The instant digital cancellation certificate can be downloaded in some free zones.
The issuance of the final cancellation certificate with approval.Costs & Formalities
The process to cancel a trade license involves cost
- Cost-saving strategies – Engage professionals like Farahat & Co. to streamline processes and avoid penalties.
- Newspaper advertisement – In liquidation cases, you may need to publish an announcement.
- Legal repercussions for delays – Ignoring cancellation can lead to fines and lawsuits.
- Delaying process = fines – The longer you wait, the more penalties add up.
- Ongoing financial obligations – Until your license is cancelled, you remain liable for government charges.
- Avoiding penalties – Early action ensures compliance and peace of mind.
Enquire Now
Common Mistakes in cancel a trade license process
- Ignoring outstanding liabilities – Unsettled debts block the process.
- Overlooking government approvals – Missing clearance from authorities delays final approval.
- Ignoring bank account closure – Accounts must be closed to avoid complications.
- Forgetting to cancel leases – Office or warehouse leases must be legally terminated.
- Delaying documentation – Leads to extended timelines and higher costs.
Non-compliance with regulatory authorities – May result in blacklisting or legal action.
Closing a Business in the Free Zones of Dubai
- Summary Winding up when a company has no liabilities or can settle the liabilities within 6 months and commence with a statement of solvency
- Creditor winding up the Company passes a resolution for winding up, which is followed by a meeting with the company’s creditors
- Bankruptcy- Done by the Court under the UAE Commercial Transaction Law No.18 of 1993.
The process of trade cancellation in Dubai is different for different types of companies. License deactivation for a civil company or sole establishment is relatively easier compared to the license of an LLC (limited liability company). It is important to note that it takes around 40 to 60 days to cancel a trade license in the DED (Dubai Economic Department). It is better to hire a specialized agency that would do the process for you and save you the hassle. Experts can provide easy cancellation services for all types of documents whether it’s trade licenses or visas, for more information contact our experts.
The whole process for cancellation of trade licenses in Dubai can be simple if you seek the help of an expert in the UAE. FAR Consulting Middle East and company specializes in dealing with different liquidation processes including the cancellation of trade licenses in Dubai. For quality, consultation, contact us now.
Meydan Free Zone vs. Mainland Dubai
| Aspect | Meydan Free Zone | Mainland Dubai |
|---|---|---|
| Regulatory & Legal Differences | Governed by free zone authority | Governed by DED and federal laws |
| Process Efficiency & Timeline | Faster, digital documentation | May involve manual processes |
| Visa Clearance Differences | Free zone handles directly | MOHRE and immigration approvals required |
| Key Advantages & Best For | Cost-efficient, quick, best for startups | Greater flexibility, suitable for larger businesses |
Growth & Future Opportunities
Cancelling a trade license doesn’t mean the end of your entrepreneurial journey. Many businesses close with the intention of restructuring or starting fresh.
- Business opportunities after cancellation – Entrepreneurs often pivot to more profitable sectors.
- Restructuring & mergers – Old entities may dissolve to make way for strategic partnerships.
- Leveraging good business record for future ventures – Proper cancellation reflects positively on your record, making it easier to start again.
Farahat & Co. can help you in cancelling your trade licence
The cancellation of a trade license in the UAE is a well-organized process that has legal, financial, and administrative prerequisites. Getting it wrong may expose you to liabilities, fines or even bad publicity. Farahat and Co. is a business consultancy in the field of advising businesses in the cancellation of trade licenses, liquidation of the company, and its restructuring. Documentation, clearances, and approvals of the government are done by our experts thus making the process smooth, compliant, and cost-effective.
When you are thinking of terminating the trade license in the UAE, consider Farahat and Co. today and leave the paperwork to us and concentrate on your future.
