Business Restructuring

Two different kinds of restructuring

The word covers two situations that have almost nothing in common except the name.

The first is distress: the business is losing money, running out of cash, or facing creditors it cannot pay on current terms. The work is urgent, the options narrow with time, and the single most important variable is how early it starts.

The second is structural: the business is fine, but the way it is organised is not. Several licences accumulated over years with no coherent logic. Trading and property in the same entity. A free zone company doing mainland business. Activities that should be separated for tax, risk or saleability sitting together for no reason other than history.

The second is planning work and is best done calmly. The first is triage. Confusing them — treating a cash crisis as a structuring project, or a structuring question as an emergency — is itself a common failure.

Who we do this for

For distress: businesses with sustained losses, a cash position that will not cover the next quarter, creditors on extended terms, or a facility being withdrawn.

For structural work: groups with several entities and no coherent rationale, businesses preparing for a sale where the structure will complicate it, businesses whose free zone status is at risk from mainland activity, families planning succession, and businesses where one activity carries risk that should not sit alongside the others.

What we actually do

The sequence matters here, so we run it the same way each time:

1. Establish the actual position first. In distress this is urgent and frequently uncomfortable, because the reported position and the real one have often diverged.
2. Build the short-term cash forecast. How long the business has on current trajectory is the single fact that determines which options remain open.
3. Identify the cause rather than the symptom. Loss-making contracts, a cost base sized for a larger business, working capital consumed by growth, a structural margin problem — each has a different remedy.
4. Map the options with what each requires and what it costs: operational change, cost reduction, disposal of an activity, refinancing, creditor negotiation, or orderly closure.
5. Model each one so the choice is made on numbers rather than on hope.
6. Deal with creditors early where that is the route. Negotiating from a position of having a plan is materially different from negotiating after a missed payment.
7. Execute, with a clear sequence and someone accountable for each step.
8. Rebuild the reporting, so the position stays visible afterwards rather than drifting again.

Group structures that grew rather than were designed

A very common UAE pattern: a business starts with one licence, adds a free zone entity for a particular purpose, sets up a second mainland company for a partner arrangement, and acquires a property in a third. Ten years later there are five entities, three of which nobody can fully explain.

The costs of that are real and mostly invisible until something forces attention:

• Corporate tax registration and filing obligations for every entity, including dormant ones, each with its own penalty exposure
• The 0 per cent band and any tax group decision complicated by entities nobody needs
• Free zone status put at risk by mainland activity that ended up in the wrong company
• Related party transactions between entities with no agreements and no transfer pricing basis
• Audit and licence renewal costs multiplied across entities that serve no purpose
• A structure that materially complicates any sale, because a buyer has to understand all of it

Rationalising this is unglamorous work with a clear payback: fewer filings, less audit cost, a cleaner tax position, and a business that can actually be explained to a buyer or a bank.

Acting early is the whole game

In distress, the range of available options narrows almost daily, and the difference between a business that recovers and one that does not is usually how early somebody was willing to look at the numbers honestly.

With six months of cash, most options are open: renegotiation, disposal of an activity, refinancing, cost reduction with proper notice, an orderly sale. With six weeks, most are gone, and what remains is worse for everyone including the creditors.

The barrier is rarely analytical. It is that acknowledging the position feels like conceding it, so the conversation is deferred until it is forced. We would far rather be called by a business that still has options than by one that has run out of them, and there is no version of this conversation where we make somebody feel worse for having it early.

The failures we are called in to fix

What we see most often:

• Waiting until cash is critical, by which point the useful options have gone.
• Treating a structural problem as a cash problem, and cutting costs when the issue is that the business is organised wrongly.
• Cutting indiscriminately, removing the capability the recovery depends on.
• Avoiding creditors, which converts a negotiation into a confrontation.
• Adding entities to solve problems, compounding a structure that is already the problem.
• Restructuring without fixing the reporting, so the position drifts again within two years.
• Leaving dormant entities in place, each carrying registration, filing and penalty exposure.

When this needs to happen

For distress, immediately — and earlier than feels necessary. The options available at six months of cash runway are categorically different from those at six weeks.

For structural work: before a sale process, before a fundraise, when a free zone position is at risk, when succession is being planned, or simply when nobody in the business can explain why an entity exists. None of those are urgent, and all of them get more expensive the longer they are left.

What you end up with

• An independent assessment of the actual position
• Short-term cash forecast establishing how much time there is
• Root cause analysis distinguishing symptom from cause
• Options with what each requires, what it costs and what it achieves
• A recommended plan with a sequence and accountability
• Support in creditor and lender discussions
• Reporting rebuilt so the position stays visible

Documents we will ask for

To start, we need:

• Current financial position and recent management accounts
• Cash position and short-term forecast
• Creditor listing with terms and any arrangements already made
• Details of facilities, security and covenants
• Group structure with every entity, including dormant ones
• Contracts that are material to the position, particularly loss-making ones
• Employment position and headcount
• An honest account of how the position arose

Fees

The initial assessment is a fixed fee and is deliberately quick, because in distress the assessment itself has to be affordable and fast or it does not happen.

Implementation is scoped once the route is chosen. Structural reorganisation is quoted as a project. We are explicit that some engagements conclude that the best available outcome is an orderly closure, and where that is the honest answer we will say it rather than charging for a recovery plan we do not believe in.

Related

Frequently Asked Questions

Last reviewed 27 July 2026. Rates, thresholds and deadlines change — the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.