This terminology can be confusing.

A business can be:

a KEZAD Free Zone company

while its particular:

• office;
• warehouse;
• logistics facility;
• industrial unit;

land plot; or

goods

are not situated inside the specific geographical area that qualifies for special VAT Designated Zone treatment.

That does not turn the company into a Mainland company.

It means:

Free Zone status for licensing and corporate purposes does not automatically establish VAT Designated Zone status for a particular location or transaction.

This is a key distinction for this page.

These concepts should not be used interchangeably.

KEZAD Free Zone

This is the company's licensing and corporate jurisdiction.

KEZAD Group currently offers both:

Free Zone jurisdiction; and

Mainland / Domestic Economic Zone jurisdiction.

A company incorporated as a KEZAD Free Zone company remains a Free Zone entity unless its legal status changes.

VAT Designated Zone

A Designated Zone is a specific concept under UAE VAT legislation.

The FTA requires the area to satisfy geographical, fencing, security, Customs and operational conditions before it receives the relevant special VAT treatment.

Therefore:

and:

outside Designated Zone boundaries ≠ Mainland company.

The Federal Tax Authority currently lists the following two directly relevant Abu Dhabi names:

The FTA does not simply list:

“Every KEZAD Free Zone facility everywhere in Abu Dhabi and Al Ain”

as one universal Designated Zone.

This is why the exact geographical location matters.

Where the company's premises or relevant goods are outside the qualifying Designated Zone area, the company should not apply the special “outside the UAE” treatment that may apply to certain qualifying goods transactions inside a Designated Zone.

The FTA's guidance states that where a Designated Zone contains areas that satisfy the statutory requirements and areas that do not, the zone is treated as outside the UAE only to the extent the conditions are met.

For liquidation, this can affect:

• sale of inventory;
• transfer of stock;
• machinery disposal;
• warehouse stock;
• intercompany transfers;
• movement of goods;
• asset distributions;
• imports;

exports; and

final taxable transactions.

The VAT position should be determined before assets are moved or disposed of.

Not automatically.

VAT Designated Zone status and the UAE Corporate Tax Free Zone regime are different concepts.

A KEZAD Free Zone company can still be a Free Zone Person for Corporate Tax purposes even where a particular facility does not receive VAT Designated Zone treatment.

However, the 0% Corporate Tax rate is not automatic.

A company must satisfy the statutory requirements to qualify as a Qualifying Free Zone Person, and the 0% rate applies to Qualifying Income, not automatically to all income.

So:

and:

Free Zone company ≠ automatically pays 0% Corporate Tax.

The company's final-period Corporate Tax status should be reviewed during liquidation.

1. Confirm the Company Is Actually a KEZAD Free Zone Entity

Review:

• business licence;
• certificate of incorporation;
• legal type;
• shareholders;
• directors;

Free Zone registration; and

constitutional documents.

Do not confuse a KEZAD Free Zone company with a KEZAD Domestic Economic Zone company.

KEZAD offers both jurisdictions.

2. Confirm the Exact Facility and VAT Location

This is the key additional step for this page.

Record:

• exact site;
• plot number;
• building;
• warehouse;
• facility name;
• Free Zone location;

customs-controlled boundary; and

location of inventory.

Then determine whether that location is within the legally qualifying VAT Designated Zone.

The FTA's test is geographical and operational, not simply based on the words “KEZAD Free Zone” appearing on a licence.

3. Conduct a Pre-Liquidation Review

Review:

• assets;
• cash;
• receivables;
• suppliers;
• creditors;
• loans;
• guarantees;
• employees;
• employee benefits;
• residence permits;
• inventory;
• machinery;
• customs;
• VAT;
• Corporate Tax;
• bank accounts;
• lease;
• utilities;
• telecom services;
• external permits;

litigation; and

penalties.

This provides the basis for selecting the correct winding-up route.

4. Determine Whether the Company Is Solvent

Identify all known and contingent liabilities.

These can include:

• suppliers;
• employees;
• tax;
• customs;
• landlords;
• lenders;
• shareholders;
• contractual termination charges;

guarantees; and

litigation.

A company should not enter a solvent summary winding up if it cannot satisfy the applicable six-month test.

5. Prepare the Statement of Solvency

Where summary winding up is appropriate, each director should sign the required statement only after properly reviewing the company's financial position.

6. Pass the Winding-Up Resolution

Complete the shareholder resolution within the applicable 28-day period after signing the solvency statement.

7. File With the Registrar

Submit the resolution and solvency statement within the regulatory 21-day filing period.

8. Appoint a Liquidator Where Applicable

Where the current procedure requires or the company chooses to appoint a liquidator, complete the appointment and relevant filings.

9. Settle Creditors

Identify and settle legitimate amounts due to:

• suppliers;
• logistics providers;
• employees;
• landlords;
• banks;
• tax authorities;
• customs;
• utilities;

related parties; and

professional advisers.

Assets should not simply be distributed to shareholders while liabilities remain unresolved.

10. Review Inventory Before Disposal

This is particularly important for industrial, logistics and warehousing companies.

Remaining inventory can include:

• imported stock;
• raw materials;
• finished goods;
• spare parts;
• machinery;
• packaging;
• tools;

equipment; and

goods awaiting re-export.

Determine VAT treatment based on the actual physical and legal location, not just the company's Free Zone licence.

11. Apply the Correct VAT Treatment to Final Asset Sales

If goods are outside the legally qualifying Designated Zone area, the company should not automatically use the special Designated Zone VAT treatment available to qualifying transactions within those areas.

The FTA states clearly that the special treatment applies only to the extent the relevant geographical and operational conditions are satisfied.

Final transactions can include:

• inventory sales;
• machinery sales;
• asset transfers;
• shareholder distributions;
• scrapping;

transfers to related companies; and

export transactions.

Each should be assessed properly.

12. Close Customs Registrations Where Applicable

Review:

• customs codes;
• open declarations;
• temporary imports;
• guarantees;
• duty liabilities;
• bonded inventory;

re-export arrangements; and

outstanding customs queries.

Being outside the Designated Zone boundary can affect the relationship between Customs location and VAT treatment, so these workstreams should be coordinated.

13. Settle Employees

Company closure may involve:

• formal termination;
• notice;
• final salary;
• unused leave;
• applicable end-of-service benefits;
• expenses;
• company property;

employment records; and

residence cancellation.

Employees should be addressed before final company deregistration.

14. Cancel Residence Permits

Review all active:

• employee residence permits;
• investor/shareholder permits where applicable;
• manager visas;

dependent sponsorships; and

establishment-related immigration records.

KEZAD's current Free Zone tariff lists AED 500 for residence-permit cancellation.

Current fees should always be reconfirmed immediately before submission.

15. Complete VAT Deregistration

VAT deregistration is separate from KEZAD licence cancellation.

The FTA currently states that where VAT deregistration is mandatory:

the application must generally be submitted within 20 business days after the deregistration obligation arises;

• the service is free of charge;

the FTA's current estimated processing period is 20 business days after receiving a completed application; and

the final VAT return and payable tax must be completed no later than 28 days after the effective deregistration date.

For a company closing its business, potential supporting documents include:

• cancelled trade licence;
• liquidation letter;
• board resolution;

financial statements; and

employee information.

16. Complete Corporate Tax Deregistration

Corporate Tax must also be closed separately.

FTA guidance states that a juridical person should file its Corporate Tax deregistration application within three months of cessation, dissolution, liquidation or the relevant event causing the entity to cease.

As of August 2026, the FTA's current Corporate Tax deregistration service:

is free of charge; and

is normally processed within 40 working days after receipt of a completed application.

Additional time may be required if further information is requested.

17. Review Qualifying Free Zone Person Status

A KEZAD Free Zone company located outside a VAT Designated Zone boundary does not automatically cease to be a Free Zone Person for Corporate Tax.

The company should separately review:

• QFZP status;
• Qualifying Income;
• non-Qualifying Income;
• Mainland activity;
• permanent establishments;
• related-party transactions;
• transfer pricing;

audited financial statements; and

final-period Corporate Tax treatment.

This is an important AEO distinction:

VAT geographical status and Corporate Tax Free Zone status are not the same test.

18. Close the Corporate Bank Account

Before closing banking arrangements, settle:

• receivables;
• employees;
• suppliers;
• VAT;
• Corporate Tax;
• Customs;
• loans;
• cards;

guarantees; and

shareholder distributions.

Do not close the account too early if the company still needs to make or receive liquidation-related payments.

19. Terminate the Warehouse, Industrial Plot or Office

KEZAD offers a wide range of Free Zone facilities including land plots, logistics parks, warehouses, offices and light-industrial facilities across its wider network.

Closure can involve:

• lease termination;
• rent settlement;
• machinery removal;
• warehouse clearance;
• utility disconnection;
• restoration;
• access cards;
• security deposits;

property inspection; and

final handover.

Industrial-property closure can materially extend the overall timeline.

20. Cancel the KEZAD Free Zone Licence

KEZAD's current published Free Zone tariff lists:

These are individual KEZAD service tariffs, not the total liquidation cost.

Additional expenses may include:

• liquidator fees;
• accounting;
• tax compliance;
• employees;
• multiple visas;
• Customs;
• warehousing;
• lease termination;
• creditor settlement;
• translations;
• notarisation;

penalties; and

other company-specific costs.

21. Complete Final Dissolution

For a summary winding up, after the company's liabilities have been discharged and applicable assets distributed, the directors or liquidator deliver the required final statement confirming that no assets and liabilities remain.

Registration of that statement results in dissolution under the published regulations.

A creditors' winding up follows a different final procedure.

There is no single total price.

KEZAD currently lists its licence-cancellation tariff at AED 2,500, but that is only one component of the business exit.

The final cost can depend on:

Can a KEZAD Free Zone company be outside a VAT Designated Zone?

Yes. Free Zone company status and VAT Designated Zone status are different concepts. The FTA states that Designated Zone treatment applies only to the specific geographical area satisfying the prescribed conditions.

Does being outside the Designated Zone make a KEZAD company Mainland?

No. A company can remain legally registered in KEZAD Free Zone while its premises or goods do not qualify for Designated Zone VAT treatment.

Is every KEZAD Free Zone facility VAT-free?

No. Even inside a Designated Zone, the special VAT treatment applies only to specific transactions and conditions. A Free Zone licence alone does not make every transaction VAT-free.

Which KEZAD-related zones are explicitly on the FTA list?

The FTA currently lists Free Trade Zone of Khalifa Port and Khalifa Industrial Zone among Abu Dhabi's Designated Zones.

How do I know whether my KEZAD warehouse is inside the Designated Zone?

Check the exact plot, location and Customs-controlled geographical boundary against the applicable Designated Zone information. The company name or licence alone is insufficient.

What happens to VAT if my KEZAD warehouse is outside the Designated Zone?

The company should not automatically apply the special Designated Zone rules to goods located outside the qualifying geographical area. Normal UAE VAT treatment should be assessed for the actual transaction.

Does non-designated VAT status affect Corporate Tax Free Zone treatment?

Not automatically. Corporate Tax uses a separate Free Zone Person/QFZP framework. VAT Designated Zone location is not the sole test for Corporate Tax qualification.

What is KEZAD summary winding up?

It is the winding-up route provided in the published ADFZ regulations for a company with no liabilities or one capable of discharging its liabilities in full within six months.

What is the KEZAD statement of solvency?

It is a statement signed by each director after full inquiry into the company's affairs confirming the financial position required for summary winding up.

How soon must the summary-winding-up resolution be passed?

Within 28 days after the statement of solvency has been signed.

How soon must it be filed?

Within 21 days after the winding-up resolution is passed.

Does every KEZAD company need a liquidator?

Not under one identical rule. The published summary-winding-up provisions state that a company may appoint a liquidator, while creditors' winding up has separate requirements.

Is there a 45-day creditor notice?

Do not automatically apply a Dubai Mainland 45-day rule. The KEZAD/ADFZ regulations contain their own creditor-notice provisions.

What happens if the company cannot pay its debts?

The summary procedure may no longer be appropriate, and the company can transition toward creditors' winding up under the published regulations.

How much is KEZAD licence cancellation?

KEZAD's current Free Zone tariff lists AED 2,500 for licence cancellation. This is not the total liquidation cost.

How much is establishment-card cancellation?

KEZAD currently lists AED 500.

How much is residence-permit cancellation?

KEZAD currently lists AED 500.

What happens to VAT during liquidation?

Where VAT deregistration becomes mandatory, the FTA generally requires the application within 20 business days. The final VAT return and payable tax are due within 28 days from the effective deregistration date.

What happens to Corporate Tax?

Corporate Tax must be deregistered separately. A juridical person generally has three months from the applicable cessation, dissolution or liquidation event to apply.

Can I just let my KEZAD licence expire?

No. Licence expiry should not be treated as completion of company liquidation, tax deregistration, immigration closure or legal dissolution.

Can an inactive KEZAD Free Zone company be closed?

Yes, but inactivity itself does not dissolve the company. The appropriate corporate, tax and administrative procedures still need to be completed.

Can The Capital Zone handle this type of KEZAD closure?

The Capital Zone Liquidators can coordinate the company-exit process from jurisdiction and VAT-location verification through winding up, employees, tax, Customs, banking, facility closure and final deregistration.