It is not easy for a business owner to wind up his business as the process of voluntary company liquidation involves many complex steps and requirements. If you have not written a sound exit strategy at the time of incorporation, you may have to deal with severe stress and unpleasant surprises at the time of company liquidation in the Dubai Silicon Oasis free zone. With the right exit strategy and assistance from the best company liquidators in Dubai, business owners can navigate the intricacies of winding up a free zone company.
In this blog article, we will discuss all the steps and latest requirements to liquidate a free zone company in Dubai Silicon Oasis. Read ahead to know what it takes to wind up a company in Dubai Silicon oasis:
Submit a Liquidation Notice to the Free Zone Authority
The free zone authority mandates that business owners planning to wind up their Dubai Silicon Oasis company must first submit a notice of liquidation. The notice should expressly state the reason for winding up the company. Dubai Integrated Economic Zones Authority (DIEZ) is the authority regulating Dubai Silicon Oasis Authority free zone.
Present a Board Resolution to the Authority
Once the liquidation notice is submitted, you are required to pass and submit a board resolution to the Authority regarding the company’s liquidation. The board resolution must be signed by all the shareholders/directors. The board resolution must be attested by the Notary Public before presenting to the free zone authority.
Appoint a Company Liquidator
A liquidator must be appointed to carry out the process of company liquidation in Dubai Silicon Oasis. You can appoint a UAE-licensed audit firm as the official liquidator for your company.
Submission of Liquidator’s Acceptance Letter
After the appointment, the liquidator is required to send an acceptance letter to the free zone authority. At this point, the powers of the shareholders/directors cease and get transferred to the official company liquidator.
Cancel the Visas and the Establishment Card
Before shutting down a company in Dubai Silicon Oasis, you must cancel all the visas issued by the company including that of the employees. Do not forget to cancel the establishment card of the company as well.
Obtain Clearance Certificates
You need to obtain clearance certificates from various free zone departments, government authorities and utility service providers to successfully close down a company in Dubai Silicon Oasis. Clearances must be obtained from the following authorities:
- Dubai Customs
- Dubai Silicon Oasis Facilities Management
- Dubai Silicon Oasis Finance Department
- Dubai Silicon Oasis Government Services Department
Return Original Documents to the Authority
All the documents issued to you by the free zone authority at the time of incorporation must be returned while undertaking the liquidation process. The original documents include a Trade License, Tenancy Contract, Memorandum & Articles of Association, Investment Service Agreement, Share Certificate, Certificate of Incorporation etc.
Close the Bank Account
If your company’s bank account is active, it must be closed at the time of liquidation. You must also obtain an account closure letter from the bank and submit it to the free zone authority.
Return the Premises Keys
When you liquidate a company in Dubai Silicon Oasis, your lease agreement also gets cancelled. It means you are not allowed to use the premises any more. Hence, you must return the keys to your office, shop or warehouse to the free zone authority.
Publish a Newspaper Advertisement
An advertisement must be published in both Arabic and English newspapers to notify the public about the company’s liquidation. Interested parties can make a claim during the 15-days lock-in period from the date of publication. The free zone Authority will not entertain any claim made after the expiry of the grace period.
Apply for VAT Deregistration
Most companies forget to apply for VAT deregistration while undergoing liquidation, incurring hefty penalties and delaying the winding-up process. Companies with active VAT registration must apply for deregistration within 20 days of cessation. The Federal Tax Authority (FTA) will impose a penalty of AED 10,000 on companies that fail to comply with this requirement.
Comply with ESR Requirements
Companies undergoing liquidation in the UAE need to check whether they fall within the scope of the Economic Substance Regulations (ESR). If your company has carried out any of the nine relevant activities, ESR requirements must be fulfilled. Hefty penalties will be imposed on companies that fail to meet their ESR obligations. The nine relevant activities are banking business, insurance business, holding company business, headquarters business, shipping business, Intellectual Property (IP) business, lease finance business, investment fund management business, and distribution and service centre Business.
Meet Ultimate Beneficial Ownership Requirements
A liquidating company in the UAE is required to hand over its 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 needs to maintain these registers for not less than five years from the date of liquidation. Failing to meet this requirement will make you liable to pay hefty fines.
Submission of Liquidation Report
Your company’s liquidation process will be complete when the liquidator submits his final liquidation report to the free zone authority. After the submission, the free zone Registrar will strike off the company’s name from the Register along with cancelling its trade license. Hiring the best company liquidators in Dubai is vital to prepare flawless liquidation reports.
Hire the Best Company Liquidators in Dubai, UAE
While initiating company liquidation in Dubai Silicon Oasis, you might have to navigate many complex steps and requirements. The best solution to deal with such intricacies is to hire experienced company liquidators in Dubai such as Jitendra Business Consultants (JBC). We offer reliable liquidation services in Dubai and across the UAE. JBC provides liquidation services for all types of companies including LLCs, free zone & offshore companies. We can ensure that your company is wound up in compliance with existing laws and regulations.