Company liquidation in UAE Free Zones
Liquidating a company is more than just ceasing the business operations. It involves numerous procedures, which most of companies may not be aware of. In the case of free zones, the process will vary from one free zone to another. HLB HAMT has experience dealing with almost all the free zones across UAE and has helped many entities based in these free zones liquidate.
There are numerous free zones in UAE and each of these free zones has their one set of procedures and regulations. Free zone companies are regulated by the local government in each respective emirate.
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Company liquidation in UAE free zones can be categorized into three. They are;
- Summary winding up – Usually companies opt for this when they do not have any liabilities or has the ability to discharge its liabilities within a time period of 6 months and begin with a statement of solvency.
- Creditors winding up – When an entity passes a resolution for ceasing its operations, followed by a meeting with the company’s creditors, it is termed as creditors winding up.
- Bankruptcy –This can be initiated by the court as per the UAE Commercial Transactions Law No. 18 of 1993.
Company liquidation across various free zones in UAE
Liquidation in DMCC
In DMCC, the request for company liquidation must be made via the member portal. Once the request to close down the company has been made, the authorities, duties and responsibilities of the Directors of the company will be terminated. The next step involves reviewing and processing the application and then announcing the decision to liquidate in a local Arabic newspaper. This is followed by the filing of the final termination by the DMCC authorities and issuing the termination letters.
Liquidation in JAFZA
A company registered in JAFZA will have to follow certain procedures while planning to undergo liquidation. Entities that have leased a warehouse, office, showroom, or retail facility must inform about their decision to close operations at least 3 months in advance and in the case of businesses that have leased a plot of land, the authority must be informed 6 months prior.
JAFZA company liquidation – Steps to be followed
- Conduct an exit interview with Customer Service Department at JAFZA
- Fill the de-registration form
- Return certificates that include company formation certificate, share certificate, and audit report to the registration section of the free zone authority.
- Submit a liquidation report
- Clearance from Visa department confirming the cancellation of all the employees.
- Submit the lease termination form and the keys to the facility
- Submit a clearance letter or a settlement of the final bill from the Dubai Electricity and Water Authority (DEWA)(for entities that has a lease for a warehouse, office, LIU, plot, retail facility, or showroom).
- If there is any outstanding charge with the telecommunications provider, it will have to be sorted out.
- Get clearance from RTA, for businesses that hold the lease of a plot of land.
Company liquidation in SAIF free zone
- The board Resolution for liquidation that has been signed by the directors of the firm for FZC & Branch of foreign/local company,
- must include details such as the clauses for closure, authorization and account details for the purpose of transferring all refunds & deposits after the liquidation process is completed.
- should be notarized & attested in case of a foreign document for branch & subsidiary firms and if the owner/shareholder is foreign entity.
- Pay the required fee
- Before ceasing business operations in SAIF, an entity need to obtain the below-mentioned clearances/ certificates;
- Post office clearance after submission of P O Box Keys
- SAIF ZONE CUSTOMS clearance
- Visa Status report from the Visa department following the application to cancel all visas, ID Card & Immigration card
- Liquidation certificate
- Clearance certificate from the SAIF ZONE FACILITIES MANAGEMENT.
- Hand over the premises keys.
- Settle all the outstanding payments.
- Return all the original documents to Leasing, Licensing & Legal Affairs.
The final refund of available credit balance & lease deposit will be in the name of the entity via a refund request letter submitted to Finance & Accounts department.
Businesses will have to cancel the visas of all employees along with their work permits while closing down their operations, irrespective of the free zone in which they are operating. They are also required to inform the free zone authority in advance and publish in an Arabic newspaper about the intention for closing down. An NOC must be obtained from utility-providing companies and other applicable government/free zone departments. Following the completion of all the paperwork, the free zone authority will provide the official termination letter.
Business liquidation in UAE free zones can be made easier with the help of a consultancy specialized in the process. HLB HAMT can assist you throughout the process, completing the required documentation and co-coordinating with the authorities
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