JAFZA offshore companies intending to shut down their operations can consider the process of voluntary company liquidation in Dubai, which offers the best form of an exit strategy. The summary winding up of companies in JAFZA allows the investors to exit operations by satisfying the requirements of all stakeholders involved. Offshore company liquidation in JAFZA is an elaborate process that requires lengthy procedures. Therefore, it is advisable to seek the assistance of experienced company liquidators in Dubai to successfully close down an offshore entity.
Nowadays, the UAE company liquidation process has become complex as the business owners are required to meet a series of regulatory requirements including Economic Substance Regulations (ESR), Value Added Tax (VAT) and Ultimate Beneficial Ownership (UBO). Navigating such requirements may add additional pressure on the company owners. Through this article, we will enlighten you on how to deal with the latest requirements to wind up an offshore company in JAFZA.
You can wind up a JAFZA offshore company by making a statement of solvency in accordance with the relevant regulations of JAFZA Offshore Companies Regulations of 2018. A resolution regarding the summary winding up of the company must be passed after each director signed the statement of solvency. The statement of solvency and a copy of the resolution must be submitted to the Registrar.
Appointment of Liquidator
Once the summary winding up of the JAFZA offshore company commences, the directors must pass a resolution to appoint a person to the liquidator. Company liquidators in Dubai can be licensed audit firms who will wind up the offshore company in accordance with relevant regulations and laws.
Confirmation of Liquidator’s Appointment
The liquidator is mandated to send a letter of acceptance to the Registrar after his appointment. It is important to note that the powers of the directors will cease once the liquidator is appointed.
Companies registered for VAT must apply for VAT deregistration with the Federal Tax Authority (FTA) within the mandatory deadline to do so. As per the relevant VAT regulations, VAT-registered companies undergoing liquidation in the UAE must apply for deregistration within 20 business days of becoming eligible for it. A penalty of AED 10,000 will be slapped on companies that fail to meet this key requirement.
Maintenance of Real Beneficiary Register
Just like other companies, an offshore company undergoing liquidation in JAFZA is required to comply with UBO regulations. As per the Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership, companies winding up their operations must hand over their Real Beneficiary Register and Partners and Shareholders Register to the Registrar within 30 days from the date of the liquidator’s appointment.
Furthermore, company liquidators in Dubai or the administrators must maintain the Registers for at least five years from the date of liquidation. UBO violations are subject to hefty penalties and reputation damage.
Economic Substance Filing Requirements
A JAFZA offshore company in liquidation is obliged to comply with ESR requirements if it has carried out any of the nine Relevant Activities at the time of liquidation. The nine ESR Relevant Activities are Banking, insurance, lease-finance business, holding company business, shipping business, headquarters business, investment fund management business, intellectual property business and distribution & service centre business. If the JAFZA offshore company has conducted any of these activities, it must meet ESR obligations such as ESR notification filing, ESR Report submission and the Economic Substance Test. Hiring the best company liquidators in Dubai can help you to avoid hefty penalties arising from ESR non-compliance.
Transfer of Intellectual Property
A JAFZA offshore company holding intellectual property assets such as patents, trademarks or copyright must transfer them to relevant persons before applying for the liquidation process. You can opt for IP licensing, or assignment processes to transfer the intangible assets.
Closing of Bank Account
Directors of the JAFZA offshore company must ensure that the company’s bank accounts are closed at the time of liquidation. A bank account closure letter must be obtained from the relevant bank to accelerate the JAFZA offshore company liquidation process. It is also important to note that the company liquidators in Dubai will ask for a bank account statement for the last financial year to compile the Liquidator’s report.
An advertisement for the company’s liquidation must be published in one local daily newspaper. It follows a lock-in period of 15 days, during which creditors can raise any claim.
Completion of Voluntary Liquidation
Marking the end of the process, the liquidator will submit a statement that the summary winding up of the JAFZA offshore company has been completed. The liquidator is also required to submit a final liquidation report to the JAFZA Registrar. The company will be officially liquidated once the Registrar strikes off the company’s name from the Register and issue a certification of dissolution.
Hire the Best Company Liquidators in Dubai, UAE
Opting for voluntary liquidation in the UAE is the best exit strategy for JAFZA offshore companies. For a better liquidation process, hire the best company liquidators in the UAE such as Jitendra Business Consultants (JBC). We have a qualified team of liquidators who can wind up your company in compliance with the JAFZA free zone authority regulations. JBC can also help you to comply with requirements related to ESR, VAT and the UBO.