Trade license cancellation in Dubai - License degeneration

Trade license cancellation in Dubai

Do you want to shut down your business in Dubai? If that’s what you have in mind then the very first thing you should do is to opt for trade license degeneration in Dubai. It’s vital to cancel your trade license on time. Because when you don’t then you will have to pay fines and penalties to the government. 

Prospr doesn’t want you to pay unnecessary fines and fees, thereby we are here to guide you on the most important matter:

How to cancel a trade license in Dubai of Sole Proprietorship?

The process of trade license Dubai cancellation or degeneration depends completely on the type of business you have. If you are running a civil company or sole proprietorship then you are in luck as the whole process is simple.

Before you kickstart license cancellation process, you need to get clearance from the government department such as : 

  • Department of immigration
  • Labor department ministry
  • Dubai electricity and water
  • Ministry of Human Resources and Emiratisation
  • Directorate of Residency and Foreigners Affairs

Once you get all the clearance, the next thing is to apply for trade license cancellation at DED.  You also need to terminate your office tenancy and close your corporate bank account in Dubai.

Learn about Difference between commercial license and professional license in Dubai

How to cancel the trade license of a share holding company? 

If you are planning to close the business of your shareholder company, it’s vital to take care of all the liabilities you have toward partners and creditors. The purpose is to protect your share and interest. The process of canceling a UAE trade license is complex for a shareholding company as you need to liquidate the shares, collect the debts, and handle all liabilities before you apply with DED. 

There is a need for companies to appoint a liquidator. Here are some companies that needs to hire a professional liquidator

  • General Partnership
  • Limited Liability Company
  • Simple Limited Partnership
  • Public Joint Stock Company
  • Private Joint Stock Company 

Understand how to get a Ras Al Khaimah trade license

You need to prepare a notarised minutes of the general assembly, where you company that company is closing the business and has appointed a liquidator. 

Approval required for canceling a private shareholding company

You need to get approval from the Ministry of Economy.

Approval required for canceling a public shareholder company

You need approval from the Securities and Commodities Authority’s decision 

Once you have a liquidator, you will cancel your trade license Dubai by following two stages  

Must read about How to check Dubai trade license verification online?

Trade License Cancellation Process

 Stage 1

  1. Provide an official letter issued by a registered liquidator. This letter states that a professional is accepting the duty of your company liquidation. 
  2. Fill the form at DED, you will get a liquidation certificate from DED.
  3. You will be required to publish this notice of company liquidation in two local newspapers. Debtors will have a grace period of 45 days from the date of notice issue to submit their claims (if any). 

Stage 2:

  1. Furnish  a declaration letter from liquidators and partners. This letter declares no objection from other parties during the grace period. Submit this letter to DED.
  2. Get required approval from authorities for canceling the trade license of your company in Dubai.
  3. You need to cancel all the foreign’s partner visas your company sponsored at the respective General Directorate of Residency & Foreigners Affairs. Also, you must cancel the firm card at the Ministry of Human Resources and Emiratisation.
  4. Submit the required document at DED
  5. The fee of business license cancellation will be determined by DED.
  6. Once you pay the cost of UAE trade license cancellation, you will receive the certificate of deregistration (cancellation)

You must know that if a company is dissolved in one emirate then its branch established in other emirates will also be dissolved. 

Know about which activities require additional approvals from authorities

Trade license cancellation in Dubai - License degeneration

How to cancel a civil company trade license in Dubai

  1. First thing you will do is to fill out the trade license cancellation form. 
  2. Collect approval from relevant government bodies to cancel a license.
  3. Cancel the firm card at the Ministry of Human Resources and Emiratisation.
  4. There is a need to cancel all the foreigners’ visas that are issued by a company with this trade license. You will cancel it at the respective General Directorate of Residency & Foreigners Affairs.
  5. You will draft a cancellation contract for your company. This contract should be attested by the notary public. 
  6. Submit all the required documents alongside cancellation fee.
  7. Upon verification of your application, authorities will issue a license cancellation certificate. 

What is required to cancel a sole proprietorship license?

If you want to cancel your sole proprietorship license, then you need the following documents.

  • A no-objection letter issued by Ministry of Human Resources and Emiratisation
  • A residence cancellation proof by expat

Can I freeze my trade license in Dubai?

Yes, you can freeze your trade license in Dubai for up to 3 years. During that time you will pay a freezing license fee. But your license won’t remain freezed more than this period.

Here are some requirements you need to meet for freezing trade license UAE

  • You need to furnish a letter from your company. In this letter, you will request to stop the license temporarily.
  • Next, you need to provide a letter from the Ministry of Human Resources and Emiratisation. This letter states that sponsored people stated on the licenses are absent.  Beside, you will provide a report issued by the inspection division in DED.

Also understand How to get trade license without office?

How much is the cancellation fee for a trade license in Dubai?

Total cost of the business license cancellation fee is AED 3520. Here is a breakdown of cost:

  • License Cancellation Fee: AED 500
  • Knowledge Dirham fee: AED 10
  • Innovation Dirham Fee: AED 10
  • Cancellation Announcement Fee: AED 500
  • Company Dissolution Fee: AED 2,000
  • Deregister of a business company Fee: AED 500

source

How long does it take for trade license cancellation in Dubai?

License cancellation process will take 40 to 60 days excluding holidays. When your license renewal due date is approaching, it’s a good idea to think whether to renew your Dubai company license or cancel it. 

You can’t expect to cancel the license at the last minute because you will pay a penalty and fee. Why? Well, you will have a one month grace period to renew your license. Now if the license renewal deadline passes and you cancel your license. Government will take not only cancellation fees from your pocket but also fines and penalties.

That means you need to cancel your license at least 3 months before its due date to prevent fines and penalties associated with late renewal of a Dubai trade license

Know about: What is the cheapest trade license in UAE?

Want to shut down your business in Dubai? Prospr PRO services are available 

The process of canceling your Dubai company license is complicated but Prospr’s Pro services are always here to make this whole process hassle-free. No matter what approval or document you require, our PRO team is here to offer you a helping hand. Call now

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Samad Ahmed

Samad is a tech enthusiast dedicated to delivering socially responsible, ethical, and transparent products in the MENA region. With over a decade of business experience, he continues to support the entrepreneurial community as the owner of Prospr, a company specializing in business setup services across the UAE, particularly in Dubai.

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