How to Liquidate a Company in Dubai Outsource City

How to Liquidate a Company in Dubai Outsource City?

Dubai Outsource City, a premium free zone in Dubai is regulated and controlled by the Dubai Development Authority (DDA). Apart from licensing, DDA also regulates the process of company liquidation in Dubai Outsource City. Liquidating a company in Dubai Outsource City involves a series of predefined steps. In recent times,  the liquidation process in the UAE has become a bit more complex when the government introduced regulations such as Value Added Tax (VAT), Ultimate Beneficial Ownership (UBO), and Economic Substance Regulation (ESR).

Business owners need to clearly understand their legal obligations while winding up a company in Dubai Outsource City. Hiring highly experienced company liquidators in Dubai makes the process much easier and faster. Meanwhile, you can read the below blog to understand the conditions and requirements to wind up a company in Dubai Outsource City. Read on.

1. Notify Dubai Development Authority 

The first step of company liquidation in Dubai Outsource City begins when the business owners notify the DDA about the liquidation. They should inform the reason why the company is heading for liquidation. Some of the top reasons for company liquidation in the UAE are loss, debt, achieving the company’s objective, low demand for the company’s products in the market etc.

2. Board Resolution to Liquidate the Company 

In the next step, the shareholders should pass a resolution to shut down the company in Dubai Outsource City. The resolution should state the appointment of the liquidator with name and address. The resolution must be on the company’s official letterhead. Share golfers must get the resolution notarized by the Notary Public. Once the resolution is notarised, the shareholders can submit it to the DDA along with the official fee for company liquidation in Dubai Outsource City.

3. Acceptance Letter from the Liquidator 

The liquidator must send a letter to the DDA accepting the appointment. Company liquidators in Dubai can be any audit firm with a valid license.

4. Advertisement in the Newspaper & Lock-in Period 

The notice about the company’s liquidation must be published in both English & Arabic Newspapers. The newspaper advertisement must state that the interested parties can make any claim against the company within the lock-in period of 45 days, counting from the date of newspaper advertisement. DDA will not accept any claim made after the lock-in period.

5. Obtain Clearance Certificates 

If any outstanding liabilities are owed to TECOM Group, you must get clearance from the finance department of TECOM Investments. Next, NOC must be obtained from the Leasing Department stating the date on which the company will be vacating the premises. NOC should also be obtained from Dubai Customs, DEWA and Etisalat / Du. A letter of closure must be obtained from the bank where the company had a corporate account.

6. Cancellation of Visas 

Visas of all the employees and partners must be cancelled. You should ensure that clearances are obtained from the Immigration department and Labour department. The company’s establishment card must also be cancelled after the visa cancellation.

7. VAT De-registration 

If the company is already registered for VAT, you must apply for VAT de-registration before commencing the liquidation process. Application for registration must be filed within 20 days of becoming eligible for it. Non-compliance with the requirement will lead to hefty penalties up to AED 10,000.

8. Economic Substance Regulations 

Companies undergoing liquidation in Dubai Outsource City should assess whether they fall within the scope of ESR. Companies that carry out any nine Relevant Activities in the UAE come within the scope of ESR. If your company falls within ESR scope, it is imperative to meet ESR obligations such as ESR notification filing, submission of ESR Report and meeting the Economic Substance Test. 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. Companies undergoing liquidation in Dubai Outsource City must conduct ESR assessment to avoid hefty penalties.

9. Ultimate Beneficial Ownership Regulations 

Liquidators in Dubai Outsource City should ensure the company has met its obligations under

Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO). Companies are required to

hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the DDA within 30 days of appointing the liquidator. The liquidator or administrator must maintain the RBR and PSR for at least five years from the date of liquidation of the company. Failing to comply with UBO regulations during liquidation will attract hefty administrative penalties.

10. Submission of Liquidation Report 

The process of company liquidation in Dubai Outsource City will come to an end upon submitting the final liquidation report to the DDA. Once the liquidation report is received, the DDA will strike off the company’s name from its register. Thereafter, the trade license of the liquidated company will be cancelled.

Hire the Best Company Liquidators in Dubai, UAE 

Company liquidation in Dubai Outsource City is a complex process that warrants diligent execution. This means, appointing experienced company liquidators in Dubai is the key to winding up a company without any hassle. Jitendra Business Consultants (JBC) is a leader in the industry providing the best company liquidation services in Dubai. We help business owners to close down free zones, mainland and even offshore companies. JBC has sufficient resources and experience to undertake complex procedures such as ESR and UBO to expedite the process of liquidation. Consult with JBC’s company liquidators in Dubai today to close down a company without any hassle.