Opting for voluntary company liquidation in Dubai International Humanitarian City offers a viable exit strategy for businesses operating within the free zone. The summary winding-up process allows business owners to exit their operations legally, saving them from abandoning their companies, shareholders and employees. By appointing company liquidators in Dubai, you can exit the business by fulfilling the requirements of all stakeholders involved such as shareholders, investors and employees.
However, business owners need to follow the mandatory steps and standard procedures associated with the process of company liquidation in the UAE. The following blog will give you an insight into how to liquidate a company in Dubai International Humanitarian City.
Passing a Board Resolution
A board resolution passed by the directors or shareholders is the first of many requirements associated with the process of company liquidation in Dubai International Humanitarian City. The resolution must be passed in the general assembly and signed by all the shareholders/directors.
Appointing a Company Liquidator
A liquidator must be appointed through the resolution to carry out the process of company liquidation. Company liquidators in Dubai can be any audit firm holding a valid license to operate in the UAE. The resolution must state the name and address of the audit firm in charge of the liquidation process.
Letter of Acceptance from Liquidator
The liquidator must then send a letter to the free zone Registrar expressing a willingness to accept the position. This is to ensure that the liquidators’ appointment by shareholders/directors is registered in the commercial register of the free zone.
Visa & Establishment Card Cancellation
All the visas held by the company under its name must be cancelled including that of the employees. Apart from that, the company’s establishment card must also be cancelled. Companies providing the best company liquidation services in Dubai can advise you on the visa cancellation process.
Obtain Clearances and No Objection Certificates
If you have any facilities inside the free zone, you must return the keys and get clearance from the leasing department. Clearances must also be obtained from Dubai Customs, DEWA, Etisalat etc. A closure letter must be obtained from the bank after closing the corporate bank account under the company’s name.
The public and creditors must be notified about your company’s liquidation through a newspaper advertisement. The news of company liquidation in Dubai International Humanitarian City must be published in one Arabic language national UAE newspaper and one English language national UAE newspaper. A lock-in period of 45 days follows, during which interested parties can raise a claim against the winding up of the company.
Apply for VAT Deregistration
Companies under liquidation in Dubai International Humanitarian City must apply for VAT deregistration if their VAT registration status is active. As per the UAE VAT regulations, a VAT-registered company must apply for VAT deregistration within 20 days of the cessation. A penalty of AED 10,000 will apply to companies violating this requirement.
Meet Economic Substance Requirements
First of all, a company under liquidation in Dubai International Humanitarian City must assess whether it falls under the scope of Economic Substance Regulations (ESR). It 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.
If yes, the company should meet ESR requirements such as ESR notification filing, ESR report submission and meeting the ESR test. Filing to meet such requirements will attract hefty penalties from relevant authorities. Company liquidators in Dubai can help the companies to check their ESR compliance status and avoid penalties.
Maintenance of UBO Registers
Companies undergoing Liquidation in Dubai International Humanitarian City must meet their obligations related to Ultimate Beneficial Ownership (UBO) regulations. As per No. (58) of 2020 on Ultimate Beneficial Ownership, companies that are under liquidation 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. Furthermore, the liquidator or administrator must maintain the RBR and PSR for at least five years from the date of liquidation of the company.
Submission of Liquidation Report
The liquidator is required to submit a liquidation report to the free zone authority, signalling the formal conclusion of the liquidation process. Once the liquidation report is received, the free zone Registrar will strike off the company’s name from the register and cancel its trade license. Hiring experienced company liquidators in Dubai is key to ensuring that the liquidation report is prepared as per the relevant laws and standard procedures.
Hire the Best Company Liquidators in Dubai, UAE
The process of company liquidation in Dubai International Humanitarian City must be executed in line with the standard procedures and applicable laws. Hiring the best company liquidators in Dubai such as Jitendra Business Consultants (JBC) will help you to ensure that your company is wound up as per the relevant laws without any hassle. JBC has a team of highly qualified liquidators with years of experience in both company liquidations. By enlisting our assistance, you need not worry about key requirements including VAT deregistration, ESR and the UBO. Avail of our company liquidation services in Dubai to ensure that your company is shut down without any hassle.