During times of economic slowdown or changes in market and customer base conditions, companies with a presence abroad may consider consolidating their operations and closing branches or subsidiaries in a foreign country. In this article we provide an overview of the practical administrative steps that are required to close or ‘deregister’ a branch office of a foreign company in the UAE.

A branch is not ‘liquidated’ but rather just closed or ‘deregistered’ so the appointment of a local liquidator is not required, unless the mother company LLC is itself being liquidated.

The processes apply to foreign branches, mainland branches of Freezone companies or local mainland branches of Limited Liability Companies based onshore in the UAE.

To commence the process of deregistration, a duly authorised board resolution from the foreign parent company of the branch office will be required to agree to and commence the process of deregistration of the branch office in the UAE. A power of attorney may also be required to grant an individual or company power to represent the foreign parent company during the process of deregistration. The process of de-registration will require the following steps:

1. Termination of the National Service Agreement
   A branch of a foreign company is required to engage a National Service Agent (NSA) pursuant to the terms of a notarised National Service Agent Agreement (NSAA) (please see our previous article here on branch formation and NSA). To terminate a branch, the National Service Agent Agreement will need to be terminated by way of a termination document to be drafted and uploaded to the online UAE Notary system for approval. Once approved, all parties are required to attend the UAE Notary public to sign the termination document in person.
   
   
2. Application for the issuance of a branch deregistration certificate
   An application will need to be submitted to the Department of Economic Development (DED) to request for a file to be opened to cancel the branch office’s trade licence. Once a file has been opened, an advertisement of the intended deregistration process will need to be placed in a local newspaper for a duration of 45 days. The purpose of the advertisement is to give creditors a grace period of 30 days from the issue date of the advertisement to submit their claims. At the end of the advertisement period and provided there are no outstanding claims, the DED will produce a letter confirming that the branch is in the process of deregistering (DED Letter).
   
   
3. Obtain clearance from the Labour & Immigration Department
   Once the DED Letter has been obtained, all employee visas should be cancelled and outstanding salaries must be paid. Once this is completed, the branch can apply to the Ministry of Human Resources and Emiratisation (MOHRE) for a closure certificate (MOHRE Closure Certificate).
   
   
4. Obtain third party clearance
   All files maintained with third party service providers such as telecommunication providers (DU or Etisalat, etc) electricity and water authorities, as well as the lease agreement with your Landlord and the Municipality clearance for your office space - Ejari (Dubai) or Tawtheeq (Abu Dhabi), must be closed and confirmation of closure obtained in writing from the third party service providers (Third Party Clearance).
   
   
5. Bank account closure
   An application will need to be submitted to the Ministry of Economy (MOE) for a closure certificate and collection of the original bank guarantee receipt of AED 50,000. Once the closure certificate and receipt are obtained, a request can be submitted to the branch’s bank for the release of the AED 50,000 bank guarantee. Once the bank guarantee has been released, the branch’s account can be cleared and the bank account can be closed.
   
   
6. Obtain a licence cancellation certificate
   Submit the Third Party Clearance documents, the MOHRE Closure Certificate and evidence of the closure of the branch’s bank to the DED for approval to obtain a certificate of deregistration.

For information regarding the practical information on the steps required to liquidate or wind up an LLC in the UAE, see our article here.

In addition, our article here provides an overview of the role of a liquidator and the process for engaging a liquidator in the UAE.

How can PRO Partner Group help?

PRO Partner Group can assist you with the practical steps, procedures and PRO work required to undertake all the relevant applications to close and deregister a branch office in Dubai, Abu Dhabi and across the UAE. We will work closely with your team to coordinate the timely wind down of the business and closure of all visas and licences to ensure an orderly and cost effective process.

If you need assistance on this or any other related company set up, restructuring, local partner or PRO matters in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at info@ppg.ae or complete the contact form below and we will be delighted to assist you.