How to exit a UAE business in Dubai: sell the company, liquidate it or take a pause?

Good to Know · 9 October 2026 · Marsel Shadmanov · Updated: 9 October 2026

Author: Marsel Shadmanov · Tax consultant: Vikas Rathore · Updated: 9 October 2026

Your UAE company is no longer needed for its original project. Closing it is an option, but not the only one: sometimes it makes more sense to sell the company, transfer your stake to a partner or sell its assets separately. If your plans are still uncertain, you could consider keeping the company during a temporary pause. The choice depends on what the owner wants to bring to an end: their participation as an owner, the business operations or the legal entity itself.

In brief

Selling shares: the owner exits; the legal entity, its history and its tax position remain with the buyer.

Selling assets: property changes hands; the company stays and must still settle its debts and taxes.

Liquidation: the company ceases to exist through the registrar's procedure — not by letting the licence lapse.

Pause: the company stays, and so do accounting, Corporate Tax and VAT obligations.

Corporate procedures differ by jurisdiction, but tax deregistration application deadlines are federal: where deregistration is required, three months for Corporate Tax and 20 business days for VAT, each counted from its applicable triggering event.

Selling a company or a stake: the owner exits, the business remains

This option is worth considering if the business has value for another owner: customer relationships, existing contracts, a team, equipment, stock or established operations. The buyer could be an external investor, another entrepreneur or an existing partner. Registration and a licence alone do not mean that a buyer will be willing to pay the desired price.

Selling a company usually means transferring shares or ownership interests. In this type of transaction, the legal entity continues to exist; its ownership changes. The buyer therefore assesses not only the assets and future income, but also the company's history, debts, tax position, disputes and contractual obligations. Selling one owner's stake while the other partners remain is a separate situation: their rights and any restrictions in the corporate documents need to be checked.

Start by defining what the transaction covers. Is the whole company being sold, or only part of the ownership? What happens to loans the owner has made to the company? Will the seller remain in a management role during a transition period? Which amounts will the buyer pay immediately, and which depend on conditions being met? These questions affect the actual outcome of the exit just as much as the stated price.

The next step is to prepare information for due diligence: corporate documents, up-to-date ownership details, financial statements and management information, and details of debts, tax registrations, employees and key contracts. The parties then agree the sale terms and establish the necessary approvals and arrangements for registering the share transfer with the relevant registrar. The specific procedure depends on the company's legal form, jurisdiction and activities.

Tax losses deserve a separate check. Under Article 39 of the Corporate Tax Law, carried-forward losses can generally be used only if the same person or persons have held at least 50% of the ownership continuously from the start of the period in which the loss arose to the end of the period in which it is used — or, where ownership has changed by more than 50%, if the company continues to conduct the same or a similar business. Companies whose shares are listed on a recognised stock exchange are treated differently. A buyer should not assume that the company's losses will be available; the position needs to be checked for the specific transaction before the price is agreed.

Check change-of-control provisions in contracts, personal guarantees and the previous owner's authority separately. After the transaction, information on shareholders, ultimate beneficial owners and signatories must be updated wherever required. A bank account should not be presented as a separate product that the buyer receives without checks: the bank applies its own customer due diligence procedures to new owners and managers. There can be no advance guarantee that all existing banking terms will remain unchanged.

The outcome of this type of exit is not simply a signed agreement, but a formally completed change of ownership and a clear understanding of what remains the seller's responsibility. The terms agreed between the parties do not, in themselves, release obligations to third parties: for example, releasing a personal guarantee may require the creditor's separate consent.

Discuss selling your company with Garant

Selling assets: transferring property, not the legal entity

Sometimes a buyer wants specific assets rather than the entire business: equipment, remaining stock, rights to a brand or a particular business line. In that case, the parties may consider an asset transaction. It is important to distinguish this from a share sale: the company itself may own the assets being sold, and the proceeds go to the company, not automatically to its owner.

The first step is to list what is being transferred and check ownership of the assets, any security interests and any restrictions. The parties then establish whether related contracts and rights can be transferred and whether consent is needed from counterparties, the landlord or the relevant authority. Do not assume that the licence, employees and all customer contracts will transfer automatically with the equipment.

The price, transfer arrangements, documents and tax implications require a separate assessment. For VAT, the transfer of a whole business, or an independent part of it, to a taxable person for the purpose of continuing that business is not treated as a supply at all under Article 7(2) of the VAT Law — it falls outside the scope of VAT, which is different from an exempt or zero-rated supply. The sale of separate assets is generally a taxable supply. The treatment depends on the terms of the particular transaction and whether the buyer actually continues the business, not on the transaction's name. After receiving the proceeds, the company may still need to repay debts and settle outstanding amounts.

Selling assets does not, in itself, close the company. Afterwards, the owner must decide whether to continue with other activities, retain the legal entity or proceed with liquidation. If the aim is to exit the business completely, this next step needs to be included in the plan from the outset.

Discuss the transaction structure with Garant

Liquidation: ending operations and closing the company

Liquidation is considered when there are no plans to continue the business and a sale is unsuitable given the circumstances or the economics of the transaction. Its purpose is to wind up the company's affairs and bring its existence to an end through the required procedure, rather than simply stop renewing the licence.

Before starting the procedure, it is useful to establish a picture of the company's assets and liabilities: cash and property, amounts owed by customers, debts to suppliers, loans, rent, amounts due to employees and unresolved disputes. This helps identify what needs to be completed and whether the company can meet its obligations. If there are insufficient funds to settle its liabilities, ordinary voluntary liquidation cannot be treated as a universal solution: the procedures under the Financial Restructuring and Bankruptcy Law, promulgated by Federal Decree-Law No. (51) of 2023, will need to be assessed. Companies in the DIFC and ADGM, and free zone companies subject to their own insolvency rules, fall under those separate regimes rather than the federal law.

The closure process is governed by the registrar's requirements and the applicable rules. Depending on the company's legal form and jurisdiction, it may require a resolution by its owners, the appointment of a liquidator, notices, settlement with creditors and final documents. The same set of documents, timeframe or cost cannot be promised for mainland companies and companies in different free zones.

Registrars typically ask for a liquidator's report and for financial information drawn up to the liquidation date. Whether audited financial statements are also required, and in what form, depends on the specific authority and should be confirmed with it before the work starts. In any case, the final accounts must reconcile with the figures used for tax deregistration, so the accounting work and the tax filings should be planned together rather than one after the other.

Employee and visa matters, leases and other contracts, permits, receivables and banking arrangements are addressed alongside this process. The sequence matters: for example, arrangements for collecting outstanding payments and settling amounts due need to be agreed before the bank account is closed. If the owner's visa is linked to the company, its future status also needs to be checked separately.

Closure with the registrar and tax deregistration are separate actions, and the tax deadlines are federal — the same for mainland companies and every free zone. For Corporate Tax, there are three distinct steps. First, the deregistration application: under Article 2 of FTA Decision No. 6 of 2023, issued under Article 52(1) of the Corporate Tax Law, a juridical person must file it within three months of the date it ceases to exist, ceases its business, is dissolved or liquidated. Second, the returns and payments: all Corporate Tax returns up to the cessation date, including the final one, must be filed and all tax and penalties settled. Third, completion: under Article 52(2)–(3), the FTA deregisters the company only once those obligations are met, and the registration remains live until then. Late filing of the deregistration application carries a penalty of AED 1,000, plus AED 1,000 for each further month, up to AED 10,000 under Cabinet Decision No. 75 of 2023 as amended.

For VAT, where the conditions requiring deregistration are met, the application must be submitted within 20 business days of the event giving rise to that obligation, under Article 14(1) of Cabinet Decision No. (52) of 2017 (the VAT Executive Regulation), as amended. Article 64(2) of the same Regulation requires a person whose VAT registration has been cancelled to submit a final Tax Return for the last Tax Period for which they were registered.

For late submission of a VAT deregistration application, Table 1, Item 4 of Cabinet Decision No. (40) of 2017 on Administrative Penalties, as amended by Cabinet Decision No. (129) of 2025, effective from 14 April 2026, provides for an initial penalty of AED 1,000, plus AED 1,000 for each month of continued delay, capped at AED 10,000. Termination of the licence does not, in itself, mean that tax registrations have been closed.

Once the procedure is complete, retain the confirmations and keep the records: Corporate Tax records must be kept for seven years after the end of the relevant tax period.

Discuss the closure route for your company

A temporary pause: keeping the company, not exiting it

If the project has been put on hold but the company may still be needed, compare the cost of keeping it with the cost of closing it and potentially registering a new company. The decision needs to take account not only of licence fees, but also of the address, accounting, reporting, banking requirements and obligations under existing contracts.

Having no sales does not mean that the company has acquired a special status or no longer has anything to do. The availability of formal suspension, its conditions and its effect on the licence must be checked with the relevant authority. Do not assume that a single procedure for putting a company 'on hold' is available to every company in the UAE.

One point is often missed: VAT registration does not pause with the business. If a registered company stops making taxable supplies, it may be required to apply for deregistration under the conditions in Article 21 of the VAT Law. The 20-business-day application deadline is set by Article 14(1) of Cabinet Decision No. (52) of 2017 (the VAT Executive Regulation), as amended. Once VAT registration is cancelled, Article 64(2) requires a final Tax Return for the last Tax Period for which the person was registered. Check the conditions before deciding to keep the registration 'just in case'. Corporate Tax returns remain due for every tax period while the company is registered, even with no income.

Also check how the pause will affect the lease, employees, visas and banking services. Keeping the company makes sense when the owner understands these costs and the reasons why it is still needed.

To prevent the pause from becoming indefinite, it is useful to set a review date and a budget in advance. If plans have not resumed by then, a sale or liquidation can be reconsidered. The pause itself does not end the owner's ownership or complete their exit from the business.

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How to start choosing the right option

Define the outcome you want: to cease being an owner, transfer an operating business to a buyer, sell assets or end operations completely. Then check the documents, obligations and restrictions. The same set of assets can lead to different decisions depending on debts, the ownership structure, contractual rights and whether there is a buyer.

Garant Business Consultancy can help you work through the exit structure, the corporate actions, the final accounts and the tax deregistration. The starting point will be the company's jurisdiction and legal form, its actual activities and the owner's desired outcome — not a procedure chosen in advance for every situation.

Discuss your company’s situation with Garant

FAQ

Can a company be sold if it is not trading?

Yes, in principle, but the absence of transactions does not, in itself, determine whether a sale is possible. The company's legal status, restrictions on share transfers, documents and obligations need to be checked, as does buyer interest. Registration does not guarantee that a company has market value.

Can I exit by selling my stake to an existing partner?

Yes, if the corporate documents and applicable rules allow it. It is important to agree the price, payment arrangements, transfer formalities, any continuing authority and the seller's separate obligations, including any guarantees.

Does selling all the assets close the company itself?

No. Selling property and ending the existence of a legal entity are separate actions. The company may still have proceeds from the transaction, debts, tax obligations and a need for subsequent closure.

Can I simply stop renewing the licence?

No. Not renewing the licence does not close the company or end its obligations. Late-renewal penalties can apply and increase under the licensing authority’s rules; DMCC, for example, publishes its renewal charges in a schedule of charges. Tax registrations do not close automatically either: the company must still file its returns and pay any tax due — Corporate Tax returns and payment are due within nine months of the end of the tax period, as the FTA reminds — and missing the deadlines triggers separate tax penalties. A company without a valid licence can therefore continue to accumulate penalties and debts. To end operations properly, formalise the company’s closure and complete the tax deregistration procedures.

How long will a sale or liquidation take?

For a sale, the timeframe depends on finding a buyer, due diligence and approvals. For liquidation, it depends on the jurisdiction, the status of outstanding payments and the applicable procedures, which may include their own mandatory notice or creditor-claim periods. On the tax side, the fixed statutory deadlines are the application deadlines: where deregistration is required, three months for Corporate Tax and 20 business days for VAT, each counted from its triggering event. Those are deadlines to apply, not the time it takes to complete the liquidation. A realistic overall timeframe can only be estimated after reviewing the particular company.

General information, not legal or tax advice for a specific company. Procedures depend on the jurisdiction, legal form and facts; obtain a current assessment before acting.