Shareholders or directors of a company registered in a free zone can close its operations through voluntary liquidation in the UAE. For voluntarily winding up a free zone company in the UAE, the shareholders must pass a board resolution to appoint a liquidator approved by the free zone authority.
Jitendra Chartered Accountants (JCA) is one of the best company liquidators in the UAE, approved by all the free zones. Shutting down a company is not an easy task, but JCA’s expertise and experience will help you wind up your entity without any hassle.
Who are Company Liquidators in the UAE?
A liquidator must be appointed to close down a company in the UAE. A liquidator is typically an audit firm with a valid license to carry out its operations in the UAE and approved by the Free zone to carry out audits/liquidation. Liquidators wind up a company on behalf of the shareholders or directors. We offer the best company liquidation services in the UAE free zones.
UAE Free Zone Company Liquidation Requirements
You need to be mindful of the following UAE free zone company liquidation requirements:
- Shareholders must prepare a resolution to liquidate the company and appoint a licensed liquidator in the UAE
- The company under liquidation should not have any liability or assets
- Settle the salary and other benefits to the employees
- All the visas issued under the company name must be cancelled
- The company’s bank account must be closed
- Any fees or charges due to the free zone authority must be cleared
- You should obtain relevant clearances
- Put necessary newspaper advertisements for closure of the company as per free zone requirements
- The liquidator must confirm that the company has no assets/obligations/liabilities by making a final liquidation report
Clearances for UAE Free Zone Company Liquidation
Before you start the liquidation process for your company registered with a free zone, you must obtain clearances from authorities including:
- Free Zone Authority’s clearance certificate
- Clearance certificate from utility providers (DEWA, Etisalat/Du etc.)
- Immigration clearance
- Customs Department clearance
- Clearance from authorities that oversee any regulated activity
- Bank account closure letter
Process of Free Zone Company Liquidation in the UAE
The process of company liquidation in the UAE free zones generally goes like this:
Board resolution: Shareholders meet and pass a resolution to liquidate the company and appoint an approved company liquidator.
Letter from Liquidator: Liquidator sends a letter to the relevant free zone authority confirming his responsibility for liquidating the company
Advertisement in Newspaper: Place an advertisement in the newspaper notifying the winding up of the company (if required by free zone)
Notice Period of Liquidation: There will be a lock-in period after the newspaper advertisement. Creditors or other parties can make any claim during this period. The lock-in period may vary depending on the free zone authority.
Submission of Clearance Documents: Obtain and submit all the clearance certificates and relevant documents to the free zone authority.
Close books of accounts: Close the books of account with NIL asset and liability and provide to liquidator including details of all settlements.
Compliance Requirements: De-register from Taxes like VAT, Excise & Corporate Tax including AML and final ESR submissions.
Final Liquidation Report: The liquidator submits the final liquidation report to the free zone authority
License Cancellation: The free zone authority cancels the license of the company and removes its name from the register.
Maintain UBO register for 5 years after license cancellation.
JCA’s Free Zone Liquidation Services in the UAE
Our free zone company liquidation services in the UAE include:
- Drafting of relevant documents
- Assistance in preparing the board resolution
- Drafting the letter of acceptance from the liquidator
- Drafting applications for liquidation and submitting them to the free zone authority
- Publishing the newspaper advertisement for liquidation
- Assistance in getting clearance letters
- Audit of financial statements for liquidation
- Preparation of the final liquidation report
Documents Required for Free Zone Company Liquidation
- Bank Closure letter with bank statement up to closure
- Clearances from Dewa, Etisalat, Du, Rent, PO Box, etc.
- Trial balance and Documents to support all the transactions (as required in the audit)
- NIL Assets and NIL liabilities to ensure
- Customs No Objection Letter (If it is a trading company)
Why Hire JCA’s Free Zone Company Liquidation Services?
- Highly experienced in the UAE company liquidation process
- Expertise in the UAE laws and regulations
- Knowledge of free zone regulations
- Independence and impartiality
- Approved by all the free zones in the UAE
- More than two decades of practice in the UAE
Frequently Asked Questions (FAQs)
What are the major causes of liquidation in the UAE?
Business owners opt for voluntary company liquidation in the UAE due to reasons such as economic downturn, increasing competition, a change in consumer behavior, or mismanagement.
What are the compliance requirements to meet during liquidation?
Before opting for free zone company liquidation in the UAE, you must:
- Apply for VAT deregistration
- Meet obligations linked to Economic Substance Regulations (ESR)
- Corporate Tax Final Return and Deregistration
- Meet Ultimate Beneficial Owner (UBO) requirements
What are the different types of company liquidation?
- Voluntary Liquidation: The shareholders or directors decide to close the company through a board resolution
- Compulsory Liquidation: Liquidation of a company in the UAE through a court order