Company Liquidation in Dubai
In the practice of work with foreign companies our clients quite often face the situations when they are not going to use their UAE company anymore. In this case we recommend closing it officially in order to not pay annual renewal costs and not bear the risks of abandoning the company.
Company liquidation in Dubai is a procedure in which a legal entity that has ceased its activities is officially closed. State authorities make a special mark in the Registry about that and issue relevant documents (certificate of dissolution) confirming that the company has been dissolved. The liquidation of a company is also called the deregistration procedure.
Why do we recommend closing the company officially instead of abandoning it? First of all, in order to receive an official document, certificate of dissolution, confirming that the company has fulfilled its obligation to creditors and is now legally closed. Secondly, company officers (director and shareholder) will have the opportunity to conduct any other business in the UAE without restrictions, acquire assets located in the UAE, take advantage of the UAE banking system, etc. At ITA Business Consultants, we streamline the company liquidation process, ensuring compliance with legal requirements while eliminating renewal costs and providing your official certificate of dissolution.
Types of dissolutions in Dubai
Compulsory dissolution
Voluntary dissolution
Initiated by company creditors when it becomes insolvent and cannot fulfill its obligations due to bankruptcy. In this case, creditors and counterparties have rights to go to court and ask to dissolve it in order to pay debts.
Initiated by the relevant decision made by company owners. In other words, this process fully depends on the will of the owners and their decisions.
Procedure of company liquidation in the UAE
We should note that the procedure for the liquidation of a company depends on the free zone and may have some differences. Below are the main basic steps that are important to take when planning the liquidation procedure of a company incorporated in the UAE.
- 01
Make sure that your company has stopped operating. If the company has assets, it is necessary to make a decision on the disposal of these assets, for example, to transfer them to a group company or directly to stakeholders. All remaining obligations should be settled.
- 02
Formally close the bank account and receive relevant documents.
- 03
Prepare with auditors financial statements up to the liquidation date. Financial statements should be provided to state authorities during the liquidation process.
- 04
Remove the company from VAT accounting and pay corporate tax.
- 05
Cancel investor visas and UAE work permissions issued to company employees.
- 06
Signing and presenting to the registered agent a prepared package of documents.
- 07
The liquidator will have to publish a notice of the company’s liquidation in a newspaper, so the maximum possible number of creditors can find this notice.
- 08
The liquidator files a notice of completion of liquidation. When the company is removed from the Register, it issues the certificate of the company’s liquidation.
- 09
To finalize the procedure, a notice of completion of the liquidation procedure is published on the Regulator’s website. The company is deemed liquidated from the time of issue of the certificate and may ONLY be restored by a court decision.
Documents required for deregistration process
To liquidate a company, it is necessary to prepare and collect the following package of documents in scans and originals:
Notice of appointment of liquidator;- Declaration of solvency;
- Liquidation plan approved by the company’s shareholders;
- Company liquidation provision signed by directors;
- M&AA, trade license, proof of settlement of liabilities;
- Clearance certificates from the relevant departments and bank account closure documents. We provide assistance with preparation of all necessary documents.
Why choose ITA Business Consultants
ITA is a licensed service provider existing in the local market of corporate services since 2020, so we will be glad to assist you with official dissolution of companies incorporated in the UAE. We provide support at all stages from preparation of documents to interaction with government authorities. We have our own office located at Dubai Marina where we always can arrange a meeting, all our employees are multi-speaking and have extensive experience in the field of administration of UAE companies.
Choosing ITA Business Consultants offers several benefits, especially for businesses looking to navigate the complexities of setting up, managing, and liquidating companies in the UAE. Here are the key advantages of working with us:
- Comprehensive Company Liquidation Services in Dubai
- Experienced Consultants
- Complex Client Support
- Expertise in UAE Business Regulations
- Personalized Effective Solutions
- End-to-End Service for Liquidation
FAQ
Generally, the liquidation process is time-consuming and lasts 3-4 months, but we need to mention that this term is significantly affected by the speed of providing correct documents by the clients themselves.
Yes, it is necessary because it is a legal requirement as well as to pay corporate tax.
Any adult capable person not associated with the company may be appointed as a liquidator. There are no requirements regarding citizenship/residency of the liquidator in the UAE.
In the case of non-renewal, fines will be imposed on the company. Their amount and calculation procedure are zone-specific. If you do not use the company and do not close it officially via the voluntary dissolution procedure, you may have difficulties in conducting your possible future business in the UAE, opening a bank account, buying real estate and so on.
In general, it is not, but certain free zones may establish their own rules. For example, in RAK there is a requirement that the company must be closed within 6 months after the renewal date.
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*The listed price does not include the state fees.