To close a UAE free zone company properly, you apply to the free zone authority to wind up or deregister, cancel every visa and establishment card, settle staff and suppliers, have the final accounts prepared, and then deregister for Corporate Tax and VAT with the Federal Tax Authority (FTA). The order matters because the tax deadlines are short: a company has 3 months from ceasing business to apply for Corporate Tax deregistration, and 20 business days to apply for VAT deregistration once that obligation starts. Letting the licence expire ends nothing; it adds penalties to a company that still legally exists.
Every rule below was read on official DMCC, RAKEZ, Ajman Free Zone, FTA, Ministry of Finance, ICP and MOHRE sources on 13 September 2026. Figures are indicative, and this is general information rather than legal or tax advice.
Key takeaways
- A juridical person must file its Corporate Tax deregistration application within 3 months of ceasing business, dissolving or liquidating, under FTA Decision No. 6 of 2023.
- The FTA will not deregister a company until every Corporate Tax return is filed and all tax and penalties are paid, including the return for the period up to the cessation date.
- Late deregistration costs AED 1,000, then AED 1,000 again each month, up to AED 10,000, for Corporate Tax and for VAT alike.
- DMCC makes a liquidator mandatory for companies and publishes the winding-up for 14 calendar days; RAKEZ and Ajman Free Zone each run a 14-day newspaper publication.
- Staff must receive wages and end-of-service benefits within 14 days of the contract ending, under Article 53 of the UAE Labour Law.
The order that avoids penalties
A common mistake is to start with the visible tasks, such as cancelling the owner’s visa or closing the bank account, and leave the tax and staff steps until later. The sequence below suits most free zones; local differences follow.
- Pass the shareholders’ resolution to close the company, and for a DMCC company decide the winding-up mode and appoint a liquidator.
- Stop trading on a documented date and record it in the resolution, because the Corporate Tax deregistration deadline runs from cessation.
- Pay staff their final wages and end-of-service benefits, and settle suppliers, landlord, telecom and utility accounts so you can collect the clearance letters the free zone asks for.
- Submit the deregistration or winding-up request to the free zone, then cancel employee visas, the establishment card and finally investor visas.
- Have the final financial statements prepared up to the cessation date, and the liquidation report where the free zone requires one.
- File the final Corporate Tax return and apply for Corporate Tax deregistration; file the VAT deregistration application and the final VAT return.
- Close the bank account only after the FTA confirms deregistration and any refund or final payment has cleared.
The FTA’s stated processing time for Corporate Tax deregistration is 40 working days, extendable by a further 40 if it asks for more information. A company that closed its account in week two has no clean way to pay a late assessment in week ten.
Why the tax clock can start before the free zone finishes
The free zone process and the tax process run on different triggers. This is the part of closing a UAE free zone company that is easiest to miss.
FTA Decision No. 6 of 2023, in force since 1 June 2023, says a juridical person files for deregistration “within 3 months of the date the entity ceases to exist, cessation of the Business, dissolution, liquidation or otherwise”. So if a trading company in JLT stops invoicing in June but only receives its DMCC termination letter in October, the FTA may treat the 3 months as starting in June.
DMCC publishes a winding-up for 14 calendar days before dissolving the company. RAKEZ and Ajman Free Zone both run 14-day newspaper publications. Add document collection, clearances from utilities and landlords, and visa cancellations, and the free zone side alone can use most of that 3-month window.
The practical answer is to prepare the Corporate Tax file in parallel rather than waiting for the termination letter. The FTA’s Corporate Tax deregistration service page (updated 31 August 2026) asks for the licence cancellation and financial statements up to and including the cessation date when the reason is closure or liquidation. The statements can be drafted while the free zone publication runs, so the application goes in the day the cancellation document arrives.
How DMCC, RAKEZ and Ajman Free Zone handle closure
Three well-documented zones show how much the requirements differ.
| Item (read 13 Sept 2026) | DMCC | RAKEZ | Ajman Free Zone |
|---|---|---|---|
| Liquidator | Mandatory for companies | Not listed on the deregistration checklist | Not mentioned in the FAQ |
| Publication period | 14 calendar days | 14 days in a local newspaper | 14 days newspaper announcement |
| Published fee | Not stated in the guidance notes | AED 3,000 publication; AED 4,500 industrial licence cancellation (physical facility card) | AED 2,135 cancellation fee |
| Penalty if not deregistered in time | Registrar may petition the court for winding-up if the company is struck off | AED 50 per day, plus AED 1,100 immigration fine | One-month grace period after expiry for renewal |
DMCC
DMCC’s closing a company guide links to guidance notes dated 5 May 2026 (version 4) that set out four modes of winding-up. In a summary winding-up the directors declare the company can be wound up within 6 months; in a solvent winding-up, within 12 months. The other two are insolvent voluntary winding-up, where creditors appoint a liquidation committee of three to five members, and involuntary winding-up by the court. Solvent and summary routes need a declaration of solvency signed by the directors. Once the Registrar approves, the owners’ portal access is replaced by access for the appointed liquidator. The liquidator’s report is submitted in original, and if it includes the last financial year’s statements, a shareholder or director signs them.
RAKEZ
The RAKEZ free zone deregistration checklist (issue 02, dated 13 August 2017 and still hosted on rakez.com) asks for a shareholders’ resolution or owner’s declaration, a general manager’s resignation letter confirming all dues were received, the original licence, an exit survey and clearances such as RAK Customs, FEWA and the telecom provider. Its deadlines are tight: payment within 10 days of the deregistration invoice, investor visa cancellation submitted within 10 days of that invoice, and any leased facility restored to its original condition within 15 days, signboard included. The physical facility service card lists 5 working days for licence cancellation once everything is in.
Ajman Free Zone
The Ajman Free Zone FAQ describes a request through the customer portal followed by an interview with customer care. Once approved, the company moves to “under cancellation” status and raises three separate requests: employee visas, the establishment card and shareholder visas. Warehouse and land clients also need clearances, including Ajman Port and Customs and FEWA.
Staff, visas and final settlements
Staff come before the licence. Federal Decree-Law No. 33 of 2021 requires the employer to pay wages and all other entitlements within 14 days of the contract ending (Article 53). For a full-time foreign worker with a year or more of continuous service, end-of-service benefit is 21 days’ basic wage for each of the first five years and 30 days for each year after that (Article 51). A small consultancy with three full-time foreign staff who have each worked four years owes each of them 84 days of basic wage, and that cash has to be in the account before the visas are cancelled.
The ICP residence cancellation service sets grace periods after cancellation: 180 days for Golden, Green and Blue Residence holders, 90 days for skilled workers in levels 1 to 3 and property owners, 60 days for permits issued with a guarantor or host, and 30 days for all other categories. After that, the fine is AED 50 per day of overstay. Telling staff their category and grace period in writing, before you cancel, saves them an overstay fine they did not see coming.
Cancel your own investor visa last. One issue we often see is an owner cancelling their residence first, then finding the bank and the remaining clearances much harder to handle from outside the country.
Final accounts and the liquidation report
Article 52 of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) states that a taxable person “shall not be deregistered unless it has paid all Corporate Tax and Administrative Penalties due and filed all Tax Returns”, including the return for the period up to and including the cessation date. That means one more set of financial statements covering a short final period.
For a DMCC company, those figures feed the liquidator’s report, so it pays to have the same firm, or at least the same trial balance, behind both. The FTA’s service page lists “Financial Statements” as the requirement for a closure or liquidation; it does not say audited. Your free zone or your liquidator may still ask for audited figures, so confirm what they need before commissioning the work.
Some penalties land on individuals rather than the company. Cabinet Decision No. 75 of 2023, as amended, charges a Legal Representative AED 1,000 from their own funds for failing to notify the FTA of their appointment on time, and AED 500 a month for a late return in the first 12 months, rising to AED 1,000 a month after that. If you appoint a liquidator, ask them directly whether they will act as the company’s Legal Representative with the FTA, and who files the final return.
Corporate Tax and VAT deregistration
Corporate Tax
The application is free and the FTA estimates 20 minutes to submit it. A sale of the business needs the sale agreement on top of the licence document and financial statements. Once approved, deregistration takes effect from the cessation date or another date the FTA determines. Missing the 3-month deadline triggers AED 1,000, then AED 1,000 on the same date each month, up to AED 10,000, under the Cabinet Decision linked above.
VAT
The FTA’s VAT deregistration page (updated 10 September 2026) lists licence cancellation among the triggers, requires the application within 20 business days of the obligation starting, and requires the final VAT return and payment no later than 28 days after the effective deregistration date. Its document list includes a turnover template covering taxable income and expenses since registration, the latest financial statements, and a Ministry of Labour letter confirming the employee count. The late application penalty in Cabinet Decision No. 40 of 2017, as amended, mirrors Corporate Tax: AED 1,000, then monthly, up to AED 10,000.
Twenty business days is roughly four calendar weeks, the shortest deadline in the whole closure for a VAT-registered company.
What happens if you simply let the licence lapse
An expired licence is not a closed company, and penalties arrive from several directions.
- The RAKEZ deregistration checklist sets a penalty of AED 50 per day when a company is not deregistered within the licence validity, and AED 1,100 if immigration is not closed before expiry.
- Ajman Free Zone’s FAQ gives a one-month grace period after expiry for renewal, after which the company is late.
- DMCC’s guidance allows its Registrar to petition the court for involuntary winding-up of a company that has been struck off.
- IFZA’s own article on missed renewals, dated 15 July 2026, warns that bank accounts may be restricted, visa renewals blocked, and that extended non-compliance can lead to blacklisting and forced strike-off.
- The FTA keeps treating the company as a taxable person. Late Corporate Tax returns cost AED 500 per month for the first 12 months and AED 1,000 per month after that, and unpaid tax attracts a 14% per annum monthly penalty.
The FTA can deregister a company on its own initiative under Article 52(4), but only from the later of the end of the tax period in which the conditions are met or the date the company ceases to exist. It does not cancel tax or penalties already due.
Planning the timeline
None of the current free zone documents we reviewed gives a start-to-finish duration. Add the published pieces for a solvent DMCC company: clearances and the liquidator’s appointment, visa cancellations, a 14-day publication, the liquidator’s report, then up to 40 working days at the FTA. That is months, not weeks, so have the Corporate Tax file ready before the termination letter arrives. A dormant company with no staff or VAT registration moves faster, but still needs Corporate Tax deregistration if it holds a tax registration number; see our notes on Corporate Tax registration for free zone companies and RAKEZ vs Ajman Free Zone running costs.
Getting the sequence checked
If you are planning a closure, the expensive mistakes are about order and dates rather than forms. Codeeo’s corporate tax consultancy is the place to start a conversation about your cessation date and FTA filings, and the accounting and bookkeeping and audit and advisory pages describe the support for final-period accounts. Talking it through before the shareholders’ resolution is signed costs less than untangling penalties afterwards.
Figures are indicative, read on official sources on 13 September 2026, and may change. This article is not legal or tax advice. Cover photo: Sheikh Zayed Road 10, via Wikimedia Commons (CC0).
