Dubai Media City free zone is an integrated media hub that houses more than 3,000 companies. The companies operating in Dubai Media City free zone are allowed to exit the operations by carrying out voluntary liquidation. Business owners carry out company liquidation in Dubai Media City for several reasons including debt, loss, achieving business objectives, subdued demand for its products or services in the market or other reasons. You have to appoint the best-licensed company liquidators in Dubai to wind up the business.
Furthermore, the companies under liquidation have to comply with regulations such as Economic Substance Regulation (ESR) and Ultimate Beneficial Ownership (UBO) and VAT De-registration to successfully wind up a company in Dubai Media City. The UAE company liquidation process has to be done the right way to avoid legal complexities or delays and that’s why we invite your attention to this blog. Read ahead to know the standard procedures and latest compliance requirements to liquidate a company in Dubai Media City free zone.
Shareholders’ Resolution for Liquidation
The shareholders must pass a resolution to dissolve the company. The resolution to wind up the Dubai Media City company must be signed by all the shareholders and must be notarised by the Notary Public. The resolution must be submitted to the free zone authority along with the official fee for winding up the company.
Appointment of Official Liquidator
A company liquidator must be appointed through the shareholder’s resolution who will oversee the entire liquidation process. A company liquidator can be an audit firm licensed to carry out its operations in the UAE. Company liquidators in the UAE are entrusted with the responsibility of selling the company’s assets to discharge its outstanding liabilities. Once appointed, the liquidator is required to issue a letter of acceptance and submit it to the free zone authority.
Before moving on with the liquidation, you have to check your VAT registration status. If you are a VAT-registered company, you must apply for de-registration or else face hefty penalties. As per the UAE VAT law, a VAT-registered company must apply for de-registration within 20 days of becoming eligible. Companies that fail to carry out VAT de-registration within the stipulated time will attract penalties up to AED 10,000. Apart from the fines, the liquidation process will also be delayed if a VAT-registered company fails to complete the de-registration of VAT.
Economic Substance Regulation Obligations
While carrying out company liquidation in Dubai Media City, you must also assess your company’s obligations under ESR. If the company has carried out any of the nine ESR Relevant Activities, you need to meet obligations such as ESR notification filing, ESR report submission and meet Economic Substance Test for any period during which it carries on a Relevant Activity and derives Relevant Income.
The nine Relevant Activities are Banking business, Insurance business, Lease Finance business, Investment Fund Management business, Holding Company business, Headquarters business, Shipping business, Intellectual Property business and Distribution & Service Centre business. Failing to meet ESR obligations while undergoing liquidation will result in hefty penalties.
Ultimate Beneficial Ownership Obligations
Companies undergoing liquidation in the UAE must meet the UBO requirements as per Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership. As per the resolution, a company undergoing liquidation must hand over the Real Beneficiary Register and Partners and Shareholders Register, or a true copy to the Registrar within 30 days from the date of the liquidator’s appointment. Furthermore, the administrator or official liquidator must maintain the UBO registers for at least five years from the date of liquidation.
Clearances and Visa Cancellations
The company needs to work permits and cancel visas of all the employees and partners. Clearance must be obtained from the Immigration department, labour department, Dubai Customs, DEWA, Etisalat, and RTA ( if any vehicle is registered under the company). Clearance from TECOM Investment’s Finance Department must be obtained on all outstanding liabilities owed to TECOM Group.
Notice Period for Winding up the Company
The procedure of company liquidation in Dubai Media City requires you to publish an advertisement in local Arabic & English newspapers showing the liquidation notice with a notice period of 45 days. The notice period gives time for creditors or any other parties to raise any objections to the liquidation.
Completion of Liquidation in Dubai Media City
Upon completion of liquidation, the liquidator will submit a final liquidation report to the free zone authority. The Registrar will then cancel the trade license and remove the company name from the register.
Hire the Best Company Liquidators in Dubai
Voluntary Liquidation is the best strategy for Dubai Media City companies to exit their operations. If going ahead is tougher for any reason, you must hire the best company liquidators in Dubai such as Jitendra Business Consultants (JBC). JBC has a team of qualified professionals with year’s of experience in carrying out company liquidation in Dubai, UAE. JBC’s company liquidation services in Dubai are key to ensure that your company is shut down without any hassle.