Licences & changes
Keeping a company dormant
There is no dormant status that suspends your obligations. A company with no activity still renews, still registers for corporate tax, still files, and still accrues penalties if it does not.
What it covers
What this licence actually permits.
UAE company law and tax law do not provide a dormancy regime that reduces obligations for a company with no trading activity. A dormant company still has a licence that expires annually and must be renewed with its fees paid and its tenancy current. It is still a taxable person that must be registered for corporate tax and must file returns. Its UBO register must be maintained. Where it carries on a Relevant Activity — and a holding company does — its ESR notification is still due.
This is where the AED 10,000 corporate tax late-registration penalty has landed most often. Owners with a shelf company, a vehicle from an abandoned venture or a holding entity that has never traded reasonably conclude that a company doing nothing owes nothing, and they are right about the tax and wrong about the registration. The realistic choice is therefore binary: either maintain the company properly, with the annual cost that implies, or close it properly. Keeping it alive and unattended is the option that combines the cost of the first with the penalties of neither.
At a glance
- Dormancy
- No status that suspends obligations
- Licence
- Renews annually with fees and current tenancy
- Corporate tax
- Registration mandatory; returns still due
- Penalty
- AED 10,000 for late registration, levied on dormant companies
- UBO
- Register maintained and updated
- ESR
- Notification due where a Relevant Activity applies
What it costs
The procedure
What the amendment involves.
- Decide deliberately between maintaining and closingUnattended is not a third option; it is the most expensive one.
- If maintaining, budget the full annual costLicence renewal, tenancy or flexi-desk, registered agent where applicable, accounting and filings.
- Register for corporate tax regardlessDormancy is not an exemption, and the penalty has been levied on companies with no revenue at all.
- File nil returns on timeA nil return filed is a completely different position from no return filed.
- Keep the UBO and ESR positions currentA dormant holding vehicle is exactly the entity that needs an ESR notification.
Related
Questions
There is no dormancy status that suspends obligations. The licence still renews and the company still registers and files for corporate tax.
It generally owes no tax, but it must be registered and must file. The penalty for failing to register applies regardless of revenue.
Closing costs a defined amount once. Maintaining costs a smaller amount annually and indefinitely. Abandoning costs more than either.
Holding company is a Relevant Activity, and the notification is generally due regardless of income.
One question
What are you actually trying to change?
Name, activity, manager or address — each is a formal amendment with its own fee, and most require a fresh MOA addendum before the licence is reprinted. Bundling several amendments into one submission usually costs less and takes no longer than doing them one at a time.
How amendments runOr just ask usShare transfers are notarised, not administrative. Every shareholder signs or is represented under an attested power of attorney, the bank has to be told, and the UBO register updates within days rather than at the next renewal.
Transferring sharesOr just ask usThen do it properly rather than letting the licence lapse. An abandoned company accrues renewal penalties, immigration liabilities and a corporate tax deregistration fine, and it blocks the shareholders from clean incorporations later.
Closing down cleanlyOr just ask us