Company Liquidation in Dubai

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When it’s time to close your business, Arabian Wingz is here to help. Our expert company liquidators in Dubai make the complete closure process easier and more affordable for you. We offer fast and reliable solutions to businesses of all sizes. Working together with us will help you handle this complex process without any stress and worries.

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What is Company Liquidation in Dubai, UAE?

In simple words, company liquidation in Dubai, UAE, is the closure of the business. De-registration and dissolution of the company are synonymous with company liquidation. It is a procedure when all the acquisitions of a business are sold and all the obligations are paid off. Hence, the business comes to an end. It comprises the liquidation of the enterprise’s capital, where assets and liabilities are set off to be equally divided among the shareholders. This cancellation of the company also involves the redistribution of any substantial earnings among all the shareholders and creditors, depending on their shareholding percentage.

Types of Liquidation in the UAE

Generally, there are two types of Liquidation in the UAE:

Voluntary Liquidation: When all the directors, owners, and shareholders of the company decide that there is no point in continuing business operations, voluntary dissolution is carried out. This type of business liquidation UAE is self-induced and is known as shareholders' liquidation. Unstable operating conditions, ongoing losses, termination of objects, loans, and more are some of the reasons for the voluntary liquidation of the company.
Compulsory Liquidation: Compulsory dissolution of a business is conducted when a business’s debts are not fulfilled during a given timeline. Hence, investors and creditors ask the court authorities to liquidate the company to get their dues. This forceful movement is conducted by the court to wind up the company and support investors in recovering their capital.

Choosing Between Liquidation, Deregistration & Bankruptcy

Most business owners in the UAE are not aware that there is a certain difference between company liquidation, deregistration, and bankruptcy. If you also think that these three terms are similar, you must understand that each of these exit strategies has a different process, purpose, and legal impact. Let us first know about these three company closure options UAE.

Liquidation

This is one of the three company closure options UAE, and if you follow this formal process for closing your business, you have to settle all debts and distribute the remaining assets among all the shareholders equally. This closure option is mostly chosen when a business decides to shut down but still has unpaid liabilities. The decision of company liquidation in Dubai can be voluntary or court-ordered, depending on a business’s financial situation. For this closure procedure, you first need to hire a trusted liquidator who will help you notify authorities, cancel licenses, clear finances, and fulfill other requirements before officially closing your company.

Deregistration

Company deregistration Dubai is another option for company closure for a business. It is mostly chosen when a business does not want to operate anymore and has no unpaid debts or legal issues. As the business has already paid debts and cleared legal concerns, this closure procedure is quicker and faster than liquidation. Professional company liquidators in Dubai can help you apply for cancellation, prepare the required documents, and submit final audit reports.

Bankruptcy

Are you confused about which option is better to choose, liquidation vs bankruptcy UAE? As we already discussed, liquidation is mostly chosen when a business has unpaid debts to pay. This legal process for closing a business is also chosen when a company has unpaid debts, but also the company is not able to repay its debts, and wants protection from creditors. This is the most complex among the three company closure options UAE, and may involve debt restructuring, asset liquidation, or even a complete shutdown.

Company Liquidation in Dubai: Free Zone vs Mainland

Company liquidation in Dubai for a business can vary depending on where it is established, the mainland or a free zone. Many business owners are still not aware that these two processes are different, and understanding them is important to ensure a smooth company closure. Here are the key differences between the free zone and mainland company liquidation processes in Dubai:

Legal Authority & Governing Body: In case of a mainland company liquidation, the closure process is managed by DED, while in free zones, the same process is managed by a specific free zone authority, like DMCC.
Documentation & Process: For the mainland liquidation process, an official board resolution, clearance certificates, and audit reports are some important documents needed. Free zone company liquidation in Dubai requires less paperwork, but legal accuracy is equally important in this also.

Notice Period & Public Announcement: A public announcement of at least 45 days is required if a mainland company wants to close its operations. But this public announcement is not mandatory for free zone company closure Dubai, making their closure process faster.
Cost & Timelines: Generally, the company liquidation in Dubai procedure for free zone businesses, like DMCC liquidation, is faster and affordable, while for mainland businesses closure, many complex steps need to be followed, making this process time-consuming and costly.

Whether you’re planning a free zone company closure Dubai or a closure of mainland business, a professional liquidator can help you by confirming all legal steps are followed correctly.

Why Businesses Need Company Liquidation Services in Dubai?

Closing a company in Dubai is more than just stopping work. As a business owner, you must know that it involves many legal steps and government regulations. Also, if the steps are not followed accurately, you may face more problems. A trusted provider of company liquidation services in Dubai can help you know the rules, prepare the paperwork, and handle other approvals.

Settle Obligations & Compliance: Proper company liquidation in Dubai is important to confirm a business's compliance with legal laws and avoid future legal issues. A trusted service provider can help you maintain compliance and make sure all the creditors and stakeholders are paid fairly.
Legally Sound Closure: Trusted liquidators in Dubai guide and help you follow all legal steps from start to finish, guaranteeing you don’t miss any required approvals to close the business in the emirate.
Proper Asset Distribution: Company liquidation services in Dubai allow fair handling and distribution of the company’s remaining assets among owners, shareholders, and creditors.
Employee Protection: During the company's closing, the company liquidators in Dubai simply do everything for businesses. They also confirm that employees' due salaries and visa cancellations are properly handled.

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Company Liquidation Services in Dubai: Why Liquidate?

Business Liquidation UAE can be the right choice for your business in the Emirates if it is facing financial and legal issues. Here are some of the key reasons that demand the liquidation of the company:

Expensive Administration

Liquidation is required when the company is small and administration is too costly.

No Cash

If a company has no funds to pay back creditors and the ATO, then liquidation is carried out immediately.

Facing Loss

If businesses are dealing at a loss and cannot be recovered from previous losses, then they must secure professional services from trusted liquidators in Dubai.

Zero Assets

If a business has no assets or a small amount of assets, then the company needs to be diluted.

Company Liquidation Services Are Also Good For The Director Because:

It can make the director personally liable for all the company’s tax obligations and debts.
This leads the director to feel stressed and worried about trying to save the company.
Prevents creditors from disturbing directors
Provide the chance to move on with life

Why You Should Liquidate a Dormant Company in UAE

Many business owners are still not aware of the severe legal consequences they can face by keeping their inactive company open in the Emirates. Here are the major risks that make company liquidation in Dubai of a dormant company necessary:

Penalties & Fines: If you don’t liquidate a dormant company UAE, you might get penalized with heavy fines, as keeping an inactive business is considered non-compliant in the country.
Accrual of Visa Sponsorship Issues: Secondly, if you have an inactive company with un-cancelled employees and investor visas, it can cause you major immigration complications. The company’s owner’s future visa application for the UAE may get blocked due to this non-compliance.
Personal Liability Risks: Even if the business operations have stopped, the company remains legally active unless it is closed formally. Failing to liquidate Dubai company can cause owners and shareholders to pay the company‘s debts with their money.
Legal Blacklisting: One of the major liquidation penalties UAE is being blacklisted by authorities, which make it complicated for stakeholders who want to open new businesses or take part in government contracts in the future.

Corporate Tax and VAT Responsibilities During Company Liquidation

During business liquidation UAE, there are some obligations that must be fulfilled. If they are avoided, the business will face severe penalties. Here are some main obligations to follow while closing a company in the country:

VAT Deregistration Timeline

Once you become eligible for company closure, you must apply for VAT deregistration Dubai within 20 business days. From unpaid VAT payments to submitting the final return and receiving FTA confirmation is involved in this process.

Corporate Tax Returns Before Closing

Corporate tax closure UAE is another mandatory obligation that must be followed to avoid any tax-related future complications from FTA.

ESR Final Submissions (if applicable)

If your company falls under the ESR, you need to file an ESR notification and report it, which confirms your business’s compliance with regulations.

FTA Clearance

The final clearance of tax during liquidation UAE is another major obligation that must not be avoided. You must review VAT and tax returns, unpaid dues, and receive confirmation from the FTA.

Company Liquidation in Dubai Process

When it comes to the procedure of company liquidation in Dubai, there are no specified actions. You are required to comprehend that the business liquidation procedure relies on numerous aspects, including the state of the business, the kind of liquidation, the motives behind the business liquidation or de-registration, and more. The procedure of business liquidation for one firm would be distinct from another. Here is a general overview of the process:

Company Liquidation in Dubai: Steps

The company should call a broad meeting of shareholders to vote on a solution to liquidate the business. The resolution should be agreed upon by a large proportion of the shareholders present at the meeting.
The business should hire a professional company liquidation services provider to supervise the liquidation procedure. The liquidator may be selected by the general discussion of shareholders or by the committee of directors.
Make sure that your business has stopped operations. If there are any remaining assets, a decision must be made regarding their disposal, such as transferring them to a related company or distributing them to stakeholders. All outstanding liabilities should be settled.

Officially close the company's bank account and obtain the necessary documentation.
Work with auditors to prepare financial statements up to the liquidation date. These statements should be submitted to the concerned state authorities during the liquidation process.
Remove the company from VAT registration and settle any corporate tax responsibilities.
Cancel any investor visas and UAE work permits for company employees.
Provide a comprehensive collection of documents to the registered agent for signing.

The liquidator is responsible for publishing a business liquidation UAE notice in a newspaper to ensure that the maximum number of creditors are notified.
The liquidator then submits a notice of liquidation completion. Once the company is removed from the official register, a liquidation certificate will be issued.
To complete the process, a notice confirming the end of company liquidation in Dubai, UAE, will be published on the regulator’s website. The company is officially considered liquidated from the moment the certificate is issued and can only be reinstated by a court order.

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What are the Necessary Documents for Company Liquidation Services in Dubai?

Before starting the company liquidation process, it is important to gather all required documents. Businesses must work with professional company liquidators in Dubai, as they can assist with complex paperwork handling. Here is a complete list of documents needed to liquidate a company in Dubai, UAE:

Copy of Emirates ID
Copies of shareholders' passports
Resolution of the Shareholders
A Copy of Business License
De-registration Application Form
Power of Attorney, if any
Copy of Memorandum of Association(MOA), with any changes

The team of Arabian Wingz, the most trusted company liquidators in Dubai, is always ready to assist you with the comprehensive documentation procedure that is needed to liquidate a business. In addition to these documents, you are required to acquire approvals from the DDA Finance Department, the Dubai Customs Department, the DDA IT Section, and more. Our reliable liquidation experts have the experience and in-depth knowledge of the intricacies of business and present effective services to help you close your business seamlessly.

Common Mistakes to Avoid in UAE Company Liquidation

Careful planning and attention are essential to avoid any mistakes that can lead to delays, penalties, and legal troubles. Here are the most common liquidation mistakes UAE that must be avoided to maintain compliance:

Ignoring Employee Visa Cancellations: One of the most common company liquidation mistakes UAE is delaying employees’ visas cancellation, which can cause a business legal troubles.
Not Settling VAT and Corporate Tax: Unpaid corporate and VAT tax can also hinder a company’s closure, as it is a critical liquidation compliance Dubai. Ignoring this step can result in hefty fines and severe legal issues.
Missing Final Audit Submission: Not submitting the final audit during liquidation UAE is another mistake that can delay the company closure process due to request rejection.
Choosing an Unregistered Liquidator: Hiring and taking company liquidation services in Dubai from a liquidator who is not officially registered is another big mistake that must be avoided. Not only will the wrong liquidator delay your business closure process, but also cause you legal and compliance issues.

How Long Does Company Liquidation Take in Dubai?

The liquidation timeline Dubai of a company varies depending on its business structure and compliance status. Generally, this process takes a few weeks, but unsolved legal and compliance issues may extend it to several months. The company’s closure process starts with the preparation phase, in which a business needs to prepare documents, clear financial records, and settle any unpaid debts.

You can take the assistance of a professional liquidator who can provide you with an estimated idea about how long to liquidate a company UAE. The liquidator will handle everything from employee visa cancellation to pending dues clearance and final audit report submission. From the preparatory phase to the final liquidation certificate, an expert liquidator can help you with a smoother company closure.

Cost of Company Liquidation in Dubai

The cost of company liquidation in Dubai varies from one business to another, and it is mainly affected by a business’s size, company structure, and location. Generally, it can cost between AED 10,000 and AED 15,000 or more. This cost includes charges for trade cancellation, legal expenses, liquidator and administrative fees, and company dissolution charges. If a business has pending fines and unpaid taxes, the cost can be higher. It’s always advised to connect with a trusted company liquidator in Dubai because they can provide you with accurate information regarding this.

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Last Steps for Liquidation of the Company

After all the documents are submitted, the authorities will evaluate the application, and the final payment to the administration has to be completed. Following that, the final certification, called the license cancellation certificate, will be granted by the relevant authorities.

Arabian Wingz guarantees clients with appropriate processes for the company liquidation in Dubai, UAE. Reach out to our team for a one-on-one consultation on how to get started with the most suitable procedure.

How Arabian Wingz Can Assist in Company Liquidation in Dubai?

As one of the leading providers of company liquidation services, Arabian Wingz is dedicated to navigating you through the comprehensive procedure of liquidation. At Arabian Wingz, you will discover a professional team of company liquidation consultants who assist you in this crucial time and guide you to dissolve your company lawfully without any stress. We deliver company liquidation solutions for all kinds of free zones, offshore, and mainland companies across the UAE. Our experts are here to take care of all the paperwork, bank account dissolution, utility cancellations, no liability certifications, and more to make the whole procedure smooth and efficient for you.

Choose Arabian Wingz, Your Trusted Liquidator in Dubai

As a business owner in the UAE, you must be aware that any mistake during audit preparation, tax filings, and legal clearance can delay or even stop the process of company liquidation in Dubai. With the help of experienced company liquidators, businesses can easily navigate the various steps in this complex process.

Choose Arabian Wingz, as your trusted liquidator for smooth business liquidation UAE. Our expert team will assist you with VAT deregistration support, final audit preparation and submission, and tax compliance. Connect with us and let our professionals guide and assist you through every step of a legal and compliant company closure.

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FAQ's

How much does it cost to liquidate a company in Dubai?

The Dubai company closure depends on various factors, like the type of license, business structure, location, number of visas, and others. Generally, the company liquidation cost in Dubai ranges between AED 8,000 to AED 30,000.

Is company liquidation mandatory for non-operational businesses?

Yes, if your business is no longer operating, it is mandatory to perform a legal business liquidation in UAE. If a business fails to do so, it will have to face hefty fines and legal issues.

Can a company with debt be liquidated?

Yes, if a company has unpaid debts, it can access the company liquidation services in Dubai. All the creditors must be notified about the company’s closure, and the company’s assets must be used to settle their debts; only then company’s liquidation be completed.

How long does liquidation take in a free zone vs mainland?

The liquidation timeline varies based on the type of jurisdiction your business is established in. Generally, free zone company liquidation in Dubai may take 15 to 30 working days, while a mainland business closure may extend to 2-3 months.