Last reviewed: 5 October 2026
A company can have no revenue and still have obligations. Licence fees, employment matters, tax filings, lease commitments and shareholder loans may remain even if the business never issued an invoice. Letting a licence expire should not be treated as completing the company’s closure.
Begin by distinguishing inactivity, licence cancellation and legal dissolution or deregistration. They are not interchangeable. Official government guidance requires businesses closing on the mainland to cancel the relevant licence and related permits; free-zone closures follow the relevant authority’s process. [1][2]
Establish the company’s current position
Prepare a short status report covering the legal form, licensing authority, licence expiry, shareholders, manager, employees, visas, bank accounts and tax registrations. Collect the constitutional documents and any outstanding authority notices. A company with no bank account may still have incorporation expenses or liabilities paid by a shareholder.
Reconstruct the accounting position rather than declaring that every figure is zero. There may be capital, deposits, refundable balances, unpaid suppliers or funds owed to an owner. These items matter when preparing final accounts and deciding how any remaining assets should be dealt with.
For example, an inactive consultancy may never have earned revenue but may still owe rent, visa-related costs and repayment of a founder’s documented loan. A closure plan needs to account for those items before the partners describe the company as having no liabilities.
Follow the correct approval and closure process
The required resolutions, liquidation steps, notices and supporting documents depend on the company’s legal form and authority. Mainland and free-zone procedures should not be mixed into one universal checklist. Obtain the current requirements from the relevant authority before arranging notarisation, advertising or professional appointments. [1][2]
Where a liquidator is required, confirm eligibility and scope. Keep copies of the appointment and acceptance, applicable notices, clearance documents and final report. An initial dissolution or liquidation-stage document may be only one step towards final deregistration.
If shareholders disagree about closing, first establish the required approvals and available legal options. One partner’s wish to stop trading does not necessarily authorise that person to dissolve the company alone. Likewise, transferring shares to another owner is different from closing the legal entity.
Deal with employees and external commitments
Review employee contracts, unpaid wages, leave and end-of-service matters under the applicable regime. Plan work-permit and residence-visa cancellations with the relevant authorities, including any dependent visas affected. Keep accurate settlement and cancellation records; do not ask an employee to acknowledge payment that has not been received.
Check leases, utilities, insurance, supplier contracts, subscriptions and customer commitments. Some arrangements require notice even where the company stopped using the service. Obtain written confirmation of termination and final balances where possible.
Coordinate banking carefully. The account may still be needed for final receipts, payments or refunds, while the closure authority may require particular evidence. Agree the sequence with the liquidator, accountant, bank and authority. Do not close access to records before statements and supporting documents have been secured.
Review corporate tax and VAT separately
No revenue does not automatically remove a company’s corporate-tax registration or filing obligations. Assess its status, relevant periods and any outstanding returns before closure. The FTA provides a specific corporate-tax deregistration service and identifies supporting documents, including licence cancellation evidence and financial statements for business closures. [3]
Do not assume that cancelling the trade licence automatically deregisters the company for tax. Identify the applicable application deadline from the actual cessation, dissolution or other relevant event and the current rules. A pending closure should not be used as a reason to ignore a filing already due.
VAT is a separate registration with its own conditions and final-return requirements. The FTA’s VAT deregistration guidance states that the final return and payment are due within 28 days of the effective deregistration date. [4] Confirm how this applies to your case and review the treatment of remaining assets with the tax adviser.
Keep evidence that closure is complete
Maintain a closure file containing the final authority certificate, tax decisions, employee and visa records, accounts, bank closure confirmation and material releases. Review any personal guarantees separately: ending the company does not itself prove that a bank, landlord or supplier has released an individual guarantor.
Nominate someone to retain records for the applicable statutory periods and respond to later queries. If the company cannot meet its debts, obtain advice on the appropriate insolvency or restructuring framework rather than distributing assets as if it were a straightforward solvent closure.
Practical closure checklist
- Confirm the legal form, authority and required approvals.
- Reconcile accounts, assets, debts and shareholder funding.
- Obtain the current liquidation or cancellation requirements.
- Resolve employee, permit and visa matters.
- Terminate contracts and coordinate final bank transactions.
- Complete applicable corporate-tax and VAT obligations.
- Secure final certificates, releases and a record-retention plan.
For a review of your closure documents and outstanding obligations, contact Prosperiti about company closure advisory.
You can also reach us on WhatsApp at +971 58 567 3776.
This article provides general information. Closure, employment and tax requirements depend on the company’s circumstances and relevant authorities.
Official sources
[1] UAE Government — Closing a business on the mainland
[2] UAE Government — Closing a business in a free zone