Company Liquidation in UAE
Every business has a journey, an exciting story of growth, challenges, and accomplishments. But sometimes, even the most successful stories reach their natural end, or perhaps a new direction calls. Deciding to close your company in the UAE, whether it's been booming on the busy mainland or operating from a dynamic free zone, can feel like stepping into a complicated maze. Danburite Corp will guide you in steps for peace of mind, outlining everything you need to know for efficient closure. Let's make this ending as strong as your beginning.
What is Company Liquidation?
Company liquidation, also known as winding up or dissolution, is the formal legal process of closing down a business entity. It involves settling all financial obligations, selling assets, paying off liabilities, and distributing any remaining funds to shareholders. Once liquidated, the company is removed from the commercial register and ceases to exist as a legal entity.
Reasons for Company Liquidation
- Fulfillment of original business purpose
- Financial difficulties or insolvency
- Strategic changes or restructuring
- Mergers or acquisitions
- Shareholder disputes
- Inability to meet legal or regulatory requirements
- Voluntary decision by shareholders to cease operations
Types of Company Liquidation in the UAE
There are primarily two types of company liquidation in the UAE, each with distinct processes and requirements:
Voluntary Liquidation (Solvent)
This is initiated by the company's shareholders or board of directors when they decide to close the business, often when the company is solvent and can pay its debts.
Key Characteristics:
- Initiated by shareholders or directors
- Company is solvent and can pay its debts
- Requires shareholder resolution
- Appointment of liquidator
- Assets distributed to creditors and shareholders
- Formal deregistration with authorities
Compulsory Liquidation (Court Ordered)
This occurs when a company is forced into liquidation by a court order, usually due to insolvency, inability to pay debts, or failure to comply with legal requirements. Creditors or shareholders typically initiate this process.
Key Characteristics:
- Forced by court order
- Typically due to insolvency
- Initiated by creditors or shareholders
- Court-appointed liquidator
- Priority given to creditor repayments
- Investigation into company affairs
The liquidation process in the UAE requires careful compliance with legal procedures. Professional guidance is recommended to ensure proper closure of business operations and fulfillment of all regulatory obligations.
Company Liquidation Process in the Mainland UAE
Stage 1: Initial Liquidation Notification and Appointment of Liquidator
- Board Resolution and Shareholder Approval: Pass and notarize a board resolution approving liquidation and appointing a registered liquidator, then submit to DED.
- Liquidator's Acceptance Letter: The appointed UAE-licensed audit firm must issue an official acceptance letter.
- Initial Application for Cancellation: Submit to DED with required documents to receive the initial liquidation certificate.
- Newspaper Advertisement: Publish liquidation notice in two local Arabic newspapers. A 45-day grace period is mandatory for creditor claims.
Stage 2: Final Liquidation and De-registration
- Cancellation of Visas and Establishment Card: Cancel all employee visas and the company establishment card.
- Bank Account Closure: Close all company bank accounts and obtain closure letters.
- Obtain Clearance Certificates (NOCs): Required from:
- Dubai Customs
- DEWA / SEWA / FEWA
- Etisalat / Du
- MOHRE
- Federal Tax Authority (VAT & Corporate Tax)
- Leasing entity (tenancy contract)
- ESR and UBO compliance
- Liquidator's Final Audit Report: Includes assets, liabilities, employee dues, and confirmation of no outstanding debts.
- Final Submission to DED: Submit final report and clearances for verification.
- License Cancellation: Upon approval, DED issues Final Liquidation Certificate and cancels the trade license.
Simplify Your Company Liquidation
Let our experts guide you through every step of the UAE company liquidation process. Ensure compliance, avoid delays, and close your business with confidence.
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While the general principles are similar to mainland liquidation, free zones often have a more efficient process, sometimes referred to as a "one-window solution." The timeframe is typically shorter, ranging from 30 to 60 days. Free zone liquidations tend to be faster due to the consolidated authority and fewer external dependencies.
Key Steps for Free Zone Company Liquidation
Notify Free Zone Authority
Inform the relevant free zone authority of the intention to liquidate and adhere to their specific notice period requirements.
Board Resolution to Dissolve and Appoint Liquidator
Shareholders pass a resolution to liquidate the company and appoint a liquidator approved by the free zone authority.
Liquidator's Acceptance Letter
The appointed liquidator provides a formal acceptance letter to the free zone authority.
Visa and Work Permit Cancellation
All employee and partner visas and work permits under the company must be cancelled.
Tax Deregistration
File a final return and apply for deregistration with the FTA. Ensure compliance with ESR and UBO requirements.
Settle Liabilities and Close Bank Accounts
All outstanding debts must be settled and company bank accounts closed.
Obtain Clearances
Secure clearance certificates from:
- Free Zone Authority departments
- Utility providers (DEWA, Etisalat/Du)
- Immigration and Customs
- Authorities overseeing regulated activities
Newspaper Advertisement (if required)
Some free zones may require a newspaper advertisement.
Liquidator's Final Liquidation Report
The liquidator prepares a final report confirming settlement of all liabilities.
License Cancellation
Submit all documents to the free zone authority for final license cancellation.
Essential Documents Required
Required Documents:
- Copy of Trade License
- Memorandum of Association (MOA)
- Passport copies and Emirates IDs
- Board Resolution for liquidation
- Liquidator's Acceptance Letter
- Clearance letters from authorities
- Bank account closure confirmation
- Proof of newspaper publication
- Employee visa cancellation documents
- Tenancy contract cancellation
- Final Audit Report
- Tax deregistration certificates
The Role of the Liquidator
The liquidator plays a key role in both mainland and free zone company liquidation. They are responsible for:
- Conducting an inventory of assets and liabilities.
- Communicating with creditors and managing claims.
- Selling company assets to settle debts.
- Paying off all financial obligations, including employee dues, supplier invoices, and government fees.
- Preparing comprehensive financial statements and the final liquidation report.
- Ensuring compliance with all relevant laws and regulations throughout the process.
- Maintaining the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) for at least five years from the date of liquidation.
Essential Documents Required for Liquidation
While specific requirements may vary slightly between jurisdictions and company types, generally, the following documents are needed:
Required Documents:
- Copy of Trade License
- Memorandum of Association (MOA) / Articles of Association
- Passport copies and Emirates IDs of all shareholders/partners
- Board Resolution for liquidation
- Liquidator's Acceptance Letter
- Clearance letters from various authorities (DED/Free Zone, DEWA, Etisalat/Du, Customs, Immigration, etc.)
- Bank account closure confirmation letter
- Proof of newspaper publication (if applicable)
- Employee visa cancellation documents
- Tenancy contract cancellation/Ejari
- Final Audit Report / Liquidator's Report
- VAT and Corporate Tax deregistration certificates
Need assistance with your Free Zone company liquidation? Our experts can guide you through the entire process efficiently.
We ensure compliance, fast turnaround, and hassle-free closure for your business.
Costs and Timelines for Company Liquidation in UAE
Company liquidation cost and timeline in the UAE depend on the business jurisdiction, case complexity, and availability of required documents. Mainland company liquidation is more expensive and time-consuming due to regulatory requirements like audit reports and public announcements.
Dubai Mainland
| Service | Cost (AED) |
|---|---|
| Board Resolution | 620.00 |
| Typing Charges | 250.00 |
| Initial Fee | 520.00 |
| Immigration Printout | 350.00 |
| Labour Printout | 86.00 |
| Newspaper Advertisement | 1,600.00 |
| Final Payment | 1,520.00 |
| Final Submission | 115.00 |
Additional Documents:
| |
Abu Dhabi Mainland
| Service | Cost (AED) |
|---|---|
| Board Resolution | 105.00 |
| Notary Fee | 500.00 |
| Newspaper Advertisement | 1,500.00 |
| Immigration Cancellation | 255.00 |
| E-channel Cancellation | 255.00 |
| Liquidation Certificate from DED | 150.00 |
Additional Documents:
| |
Need help with Abu Dhabi company liquidation? Our experts are ready to assist you every step of the way.
MEYDAN FREE ZONE
| Service | Cost (AED) |
|---|---|
| License Cancellation Fee | 2,000.00 |
| Immigration Card Cancellation Fee | 2,000.00 |
| Investor Visa Cancellation | 800.00 |
| Innovation Fee | 10.00 |
| Knowledge Fee | 10.00 |
Need help with Meydan Free Zone company liquidation? Our experts are ready to guide you through every step of the process.
International Free Zone Authority (IFZA)
| Service | Cost (AED) |
|---|---|
| License Cancellation | 2,000.00 |
| Establishment Card Cancellation | 500.00 |
| Visa Cancellation (Inside) | 750.00 |
| Visa Cancellation (Outside) | 1,500.00 |
Need help with IFZA Free Zone company liquidation? Our experts are ready to assist you through every stage of the process.
RAKEZ - Ras Al Khaimah Free Zone
| Service | Cost (AED) |
|---|---|
| License Cancellation | 3,000.00 |
| Immigration File Cancellation | 685.00 |
| E Channel Registration & Refund Deposit | 685.00 |
| Visa Cancellation | 685.00 |
Need help with RAKEZ Free Zone company liquidation? Our experts are ready to assist you through every stage of the process.
Dubai Multi Commodities Centre (DMCC)
| Service | Cost (AED) |
|---|---|
| License Cancellation | 4,015.00 |
| Immigration Card Cancellation | 200.00 |
| Visa Cancellation | 458.00 |
Need help with DMCC Free Zone company liquidation? Our experts are ready to guide you through every step of the process.
Sharjah Media City (SHAMZ)
| Service | Cost (AED) |
|---|---|
| License Cancellation | 2,100.00 |
| Visa Cancellation | 650.00 |
| Immigration Card Cancellation | 630.00 |
Need help with SHAMZ Free Zone company liquidation? Our experts are here to support you through every stage of the process.
Why Choose Danburite Corporate for Company Liquidation in UAE?
Company liquidation is a cautious process that requires expert knowledge of local laws, regulations, and administrative procedures. Failing to comply with mandatory steps can lead to significant fines, legal complications, and affect future business endeavors in the UAE.
What makes Danburite Corporate different for liquidation services?
Danburite Corporate is a leading provider of corporate services in the UAE, specializing in efficient and compliant company liquidation for businesses across mainland and free zones. Our experienced team offers A-to-Z support, ensuring you leave nothing behind.
What services do you provide during liquidation?
We provide expert consultation, legal documentation, liquidator appointment, government liaison, financial settlement, visa cancellations, and strategic guidance throughout the entire liquidation process.
How do you handle legal compliance?
Our team of legal advisors assists in drafting all necessary board resolutions, applications, and legal documents, ensuring full compliance with DED or free zone authority requirements.
Do you handle government coordination?
Yes, we handle all communication with relevant authorities including DED, free zones, immigration, MOHRE, FTA, and utility providers to secure necessary clearances and approvals.
How do you manage financial aspects?
Our team guides you through settling outstanding debts, employee end-of-service benefits, and preparing comprehensive financial statements and the final liquidation report.
What about visa cancellations?
Our expert PRO Services team manages the cancellation of all employee and partner visas, establishment cards, and other related permits efficiently.
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