IS IT COMPULSORY TO CANCEL THE TRADE LICENSE BEFORE LEAVING THE COUNTRY FOREVER???
In the UAE, licenses for companies are generally given for a year. At the end of that duration i.e., a year, the said license must be renewed by paying the relevant fees and submitting the necessary documents required by the competent authorities. If such renewal is not done on time, then the validity of the license expires on its own.
However, this does not mean that the company shall cease to exist, or the license gets cancelled on its own. Instead, the company shall continue to exist in the records and registers of the governing authority as a company with an expired license. This means though the company has an existence, it will not be allowed to carry out its activities as per its license, as the license will be expired.
The license may be renewed at any time later, by paying the applicable fees with applicable penalties (if any) and submitting the necessary documents.
Let’s say, the person wishes to return to the UAE after a few years, then he can avail the following options:
- He may sustain the company’s licenses annually or revive the licenses upon his return. This shall allow the individual to obtain visas in the UAE, under the company’s sponsorship.
- As an alternative, he may also elect to sell/transfer all his shares in the company to another legal person (i.e., an individual or a corporate entity) and resign from all management positions in the company. That way, he may end his relationship with your company.
If the individual does not wish to return, then the best option would be to liquidate/wind up the company entirely before his departure from the UAE. The liquidation/ winding up will have to be done in accordance with the applicable laws of the jurisdiction in which the company is incorporated. Such a process shall ensure that the company is fully terminated, and no further action or claim can lie against the company.
CONCLUSION
It is also advisable to consult with a legal practitioner specializing in corporate laws in the UAE, who may provide you with the necessary advice on the matter.
