If any business registered in the UAE wants to shut down and cancel its license, it will have to get the cancellation certificate from the relevant authority. If the license is not renewed, the relevant authority will automatically initiate the process of cancellation of business license and deregistration as per licensing law. Each company that plans to close down or is in the liquidation phase will have to complete the official cancellation process to finalize all legal formalities related to its license. The steps for company liquidation vary depending on the type of license the business owns. Below, we have explained the main types of licenses active in the UAE and the process for canceling a trade license in Dubai.

• Trade License: Covers all trading and commercial activities

• Industrial License: Applies to manufacturing and industrial operations

• Service License: For professionals such as doctors, consultants, and lawyers

What Is a Trade License?

A trade license is an official document issued by the UAE government that allows businesses to operate legally. It specifies the nature of business activities – whether commercial, professional or industrial – that a company can undertake.

Importance of a Trade License

No business can legally operate in the UAE without a valid business license. It serves as a basis for contracts, banking transactions and working employees. Keeping your trade license valid, it is ensured that your business complies with UAE laws and regulations. If a business fails to renew or maintain its license, it may face fines, legal disputes or damage to its reputation. Therefore, if you have stopped the operation of your business, it is equally important to cancel your business trade license rather than letting it expire or remain unattended.

Difference Between License Cancellation And Liquidation in UAE

Actually, the operator can terminate their trade license contract for a specific reason. This process is also known as cancellation of trade license registration, where the company chooses to completely cease its business operations.

On the other hand, company liquidation in the UAE is governed by the Federal Law on Commerce of 2015. Cancellation of trade license is an important step in the liquidation process.

During company liquidation in Dubai, the business ceases to exist, and its assets are reviewed, sold and their claims are distributed among the shareholders and creditors.

Types of Liquidation in UAE

Voluntary Liquidation

Management, management and creditor management are important. Voluntary liquidation occurs when the company can no longer meet its debts or liabilities. Shareholders decide on the liquidation option after reviewing its finances.

Once the company is closed, the creditors are first paid, and the remaining documents, if any, are called to the shareholders.

Compulsory Liquidation

Compulsory Liquidation occurs when the company's representatives or any other problem is requested by its creditors, workers or shareholders. In the same case, the court issues an order to seize the company's assets. The proceeds from the sale of these assets are used to settle the utility - starting with the highest-paying creditors and ending with the lowest-paying creditors.

How to Cancel a Trade License in Dubai?

The process of canceling a trade license in Dubai involves several important steps. Here is a complete guide:

Preparing The Resolution

The first step in canceling a Dubai Department of Economic Affairs (DED) trade license is to draft a board resolution and a cancellation agreement. Both documents must be signed and notarized by a notary public.

Application For Cancellation of Trade License

Once the initial documents are ready, business owners need to submit an official application requesting the cancellation of the Dubai trade license.

Cancellation of Employment Visa

Next, you must cancel all active employment visas associated with the trade license. Obtain the necessary approvals from the relevant government authorities before proceeding.

Note: If your business is registered on the mainland, you must obtain permission from the Department of Economic Development (DED).

If your company operates in a free zone, approval from the Free Zone Authority is required.

Publication

After the visa is cancelled, you must publish a notice of liquidation in two local newspapers. In addition, a joint declaration from the liquidator and partners must confirm that no third-party objections have been raised during the notice period.

Pay the Dubai Trade License Cancellation Fee

You will then need to pay the applicable Dubai Trade License Cancellation Fee. Our business experts can help you with a clear breakdown of the cost structure so that you can plan your next steps efficiently.

Clearance

The final step is to obtain visa clearance and cancel the company establishment card. Once the authorities have issued all the necessary approvals, your Dubai Trade License will be officially cancelled.

Recommended to Read: Main Difference Between Commercial And Professional Licence In Dubai (2025)

Essential Documents Required for Trade License Cancellation in Dubai

As a business owner, ensure that you provide the following documents to complete the DED trade license cancellation process:

• Passport copy

• Visa copy

• Trade license copy

• Copies of newspapers showing the published liquidation notice

If you want a hassle-free and smooth process, our experienced business setup consultants can handle the entire process on your behalf.

How Much Does It Cost to Cancel a Trade License in Dubai?

The total cost of canceling a trade license in Dubai is AED 3,520. Below is a detailed breakdown of the costs involved:

• Company Dissolution Fee: AED 2,000

• License Cancellation Fee: AED 500

• Cancellation Advertisement Fee: AED 500

• Business Cancellation Fee: AED 500

• Knowledge Dirham Fee: AED 10

• Innovation Dirham Fee: AED 10

Can I Freeze My Trade License in Dubai?

Yes, you can freeze your Dubai trade license for up to three years by paying a license freezing fee. However, the freezing period cannot exceed this limit.

To freeze your trade license in the UAE, you must meet certain requirements:

Submit an official letter from your company requesting the temporary suspension of the license.

Provide a letter from the Ministry of Human Resources and Emiratization confirming that all employees listed under your license are no longer active.

Include a report from the DED Inspection Department verifying this.

How Long Does It Take to Cancel a Trade License in Dubai?

The process of canceling a trade license usually takes about 40 to 60 days, excluding public holidays. It is important to decide whether you are planning to renew or cancel your business license before the renewal date approaches.

If you wait until the last minute, you may have to face punishment and a late fee. After a one-month grace period for renewal passes, the government charges both cancellation fees and additional penalties.

To avoid these additional costs, you should start the process of canceling the license at least 3 months before your renewal date. This ensures a smooth process and helps you avoid unnecessary punishment associated with late renewal.

Why Choose Our Services?

DBS business setup ensures a smooth and reliable business setup and cancellation process for customers in Dubai. Our team of professionals offers expert guidance and full support to make business -related processes simple and transparent.

For more information or personal assistance, book a free consultation with our experts today.