Business owners registered with Dubai World Trade Centre can opt for company liquidation as an exit strategy. Company liquidation in Dubai World Trade Centre is the best exit strategy available for the businesses registered with the free zone as it enables them to wind up their operations in line with the interests of all the stakeholders involved. By appointing the best company liquidators in Dubai, you can ensure you have met all the mandatory requirements for winding up your company.
The process of company liquidation in Dubai requires you to follow a series of predefined steps and meet certain mandatory requirements. This article is written for you to learn about all of the key steps and requirements related to winding up a company in the Dubai World Trade Centre. Keep reading to know what those steps and requirements are:
Pass a Board Resolution
The company under liquidation in Dubai World Trade Centre must pass a board resolution in the first step. The board resolution must be signed by all the shareholders of directors. The resolution must be notarised and attested before sending it to the free zone authority.
Appoint a Company Liquidator
A company liquidator must be appointed to wind up the company in Dubai World Trade Centre. The liquidator can be an audit firm licensed to carry out its operations in the UAE.
Letter of Acceptance from Liquidator
Once appointed, the liquidator should send a letter to the free zone authority confirming his willingness to act as the liquidator for the Dubai World Trade Centre company.
Cancellation of Visas
All the visas under the company must be cancelled, including that of the company’s employees. You must also ensure that the establishment card of the company has also been cancelled.
Closure of Bank Account
If the company has an active bank account, it should be cancelled before winding up the company. A closure letter must be obtained from the bank in this regard.
Obtain Clearance Letters
Clearance letters should be obtained from government departments and utility service providers. You need to obtain NOCs from Dubai Customs, Emirates Post (if you have a PO Box), DEWA, Etisalat/Du etc. A clearance letter from RTA will be necessary if any vehicle is registered under the company’s name.
The company under liquidation needs to submit a lease surrender/NOC from the leasing department of Dubai World Trade Centre. If the company is operating in a third-party business centre, the NOC must be obtained from the business centre.
Return the Original Documents
At the time of incorporation, the free zone authority may have issued certain documents such as the trade license, Memorandum of Association (MoA), Articles of Association (AoA) etc. All such documents should be returned to the free zone authority at the time of liquidation.
Apply for VAT Deregistration
Companies under liquidation in the UAE must check their VAT registration status. If you have active VAT registration, you must apply for VAT deregistration before liquidating your company in the UAE. The application for VAT deregistration should be submitted to the Federal Tax Authority (FTA) within 20 days of becoming eligible for it. A penalty of AED 10,000 will apply if you fail to meet this mandatory requirement.
Hand over UBO Registers
According to the Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO), the company needs 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. The administrator or liquidator should also maintain the registers for at least five years from the date of liquidation. Violators will incur hefty administrative penalties.
Meet Economic Substance Regulations
Companies undergoing liquidation in the UAE must meet the requirements as per the Economic Substance Regulations (ESR). You have to file an ESR Notification, ESR Report and meet the ES test if you have 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. Violation of ESR requirements will attract hefty penalties and other severe consequences.
Details regarding the liquidation of the company must be published in both English (Gulf News or Khaleej Times) and Arabic newspapers (Al Bayan or Al Khaleej). There will be a waiting period of three weeks following the advertisement.
Submission of the Liquidation Report
At the end of the process, the liquidator needs to submit a final liquidation report to the free zone authority. The Registrar of the free zone will then strike off the name of the company from the Register along with cancelling the company’s trade license.
Hire the Best Company Liquidators in Dubai, UAE
Hiring experienced company liquidators in Dubai is essential to ensure your company is closed down in line with all the relevant laws. Jitendra Business Consultants (JBC) offers bespoke company liquidation services in Dubai that can be used to shut down your operations hassle-free. We have an impressive track record in liquidating free zone, mainland and offshore companies operating in the UAE. Consult with us today to ensure your company is wound up peacefully.