The process of voluntary liquidation in Fujairah Creative City free zone provides the entrepreneurs with the best strategy to exit their business. However, the winding-up process will be easy and hassle-free only if you plan your exit from the beginning. Prior planning is recommended as the liquidation process is lengthy, involving mandatory steps such as the appointment of company liquidators in the UAE and meeting compliance requirements related to Economic Substance Regulation (ESR), Ultimate Beneficial Ownership (UBO) and Value Added Tax(VAT).
Voluntary liquidation of a company in the UAE is regarded as the best exit strategy as it lets the business owners satisfy all the stakeholders involved such as investors, shareholders, creditors, employees etc. Moreover, it saves you from avoiding legal issues from leaving your company and employees in the lurch. Read ahead to understand the latest steps and requirements to wind up a company in Fujairah Creative City free zone:
Pass a Board Resolution
The first step of voluntary company liquidation in Fujairah Creative City begins with the directors or shareholders passing a board resolution on the winding up of the company. The resolution must mention the reason to shut down the company. Moreover, the resolution must be signed by all the directors/shareholders before sending it to the free zone Registrar.
Appoint a Company Liquidator
Appointment of company liquidators in the UAE is a mandatory prerequisite to voluntarily winding up a company. The resolution must mention the name and address of the company liquidator.
Letter of Acceptance from the Liquidator
Once appointed by the directors, the liquidator must send a letter to the Fujairah Creative City free zone authority confirming the appointment. Company liquidators in the UAE can be any audit firm with a valid license to operate in the country.
Cancellation of Visas and Establishment Card
All the visas under the company sponsorship need to be cancelled to successfully wind up a company in Fujairah Creative City Free Zone. Business owners must also not forget to cancel the company’s Establishment Card.
Clearance Letter from Bank
Most companies in the UAE have an active corporate bank account under their name. This bank account must be closed at the time of company liquidation in the UAE. The business owners must obtain a letter from the bank to prove the bank account has been closed.
Clearance from Authorities & Service Providers
Clearance letters must be obtained from various authorities and service providers such as the following:
- Fujairah Customs
- Telecom provider (Etisalat /du)
- Emirates Post (if the company has a P.O. Box)
Return Original Documents
You must return all the original documents under your company’s possession such as the Articles of Incorporation, Certificate of Incorporation, Shares Certificate, Lease Agreement etc.
An advertisement must be published in the daily newspaper about the company’s liquidation. A grace period of 45 days will follow, during which creditors and other parties can raise a claim against the company. The free zone authority will not entertain any claim made after the lock-in period.
Apply for VAT Deregistration
Companies under liquidation in Fujairah Creative City must apply for VAT deregistration if they have active VAT registration. As per the regulations, companies undergoing liquidation in the UAE must apply for VAT deregistration within 20 days of the cessation. The Federal Tax Authority (FTA) will impose a penalty of AED 10,000 if this requirement is not met. Most companies forget this critical requirement and burden themselves with hefty penalties at the time of liquidation.
Meet Economic Substance Requirements
Companies undergoing liquidation in the UAE should check whether they have any obligations toward the Economic Substance Regulations (ESR) requirements. If yes, they should fulfil ESR requirements such as ESR notification filing, ESR report submission and meeting the ESR test. ESR obligation can be determined by checking if the company has conducted any of the nine relevant activities such as Banking business, Insurance business, Lease-Finance business, Investment Fund Management business, Holding Company business, Headquarters business, Shipping business, Intellectual Property business and Distribution & Service Centre business.
Maintenance of UBO Registers
Companies winding up their operations in the UAE must hand over their Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone Authority within 30 days of appointing the liquidator. Apart from that the liquidator or administrator is required to maintain the RBR and PSR for at least five years from the date of liquidation. Avoiding this requirement will lead to hefty penalties as per Cabinet Decision No. (58) Of 2020 on Ultimate Beneficial Ownership.
Submission of Liquidation Report
The process of company liquidation in Fujairah Creative City will conclude once the liquidator submits the final liquidation report to the free zone authority. The Registrar will then strike off the company’s name from the register and cancel its trade license. The best company liquidators in the UAE can assist you to wind up a company without any hassle.
Hire the Best Company Liquidators in the UAE
The process of company liquidation in Fujairah Creative City is a lengthy process that requires the assistance of experienced hands. The best company liquidators in the UAE such as Jitendra Business Consultants (JBC) can ensure that your company is shut down as per existing laws and regulations. JBC offers the best company liquidation services in the UAE thanks to its dedicated team of efficient liquidators. With our assistance by your side, you need not bother about complex requirements related to VAT deregistration, ESR and the UBO.