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Need Assistance?

At Company formation our dedicated company formation agents are always here to assist you. Whether you’re exploring Mainland or Freezone options, our experts are online and ready to answer all your questions directly through the Websites & WhatsApp

From choosing the right jurisdiction to understanding licensing requirements, we’re here to guide you every step of the way — making your Dubai company formation journey simple, clear, and stress-free.

WhatsApp

WhatsApp us your query

Connect now

We are here to answer

Call now

Call us on +971504955205
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Liquidation Of
Companies in UAE

Add Your Heading Text Here

Liquidation Of
Companies in UAE

Liquidation

What is Company Liquidation?

Company liquidation is the process of legally closing down a company and distributing its assets (if any) to creditors and shareholders. Once liquidated, the business ceases to exist as a legal entity, and its trade license is officially cancelled. This process is also crucial for those looking to pause operations after company formation in the UAE, whether it’s in the mainland or a free zone company formation setup.

There are two types of liquidation:

1.

Voluntary Liquidation

This occurs when the shareholders decide to close a company that is still solvent (able to pay its debts). Common reasons include business restructuring, retirement, exiting the UAE market, or shifting business from one emirate to another, such as moving from company formation in Dubai UAE to Abu Dhabi mainland company formation.

2.

Involuntary (Compulsory) Liquidation

This is initiated by a court order when the company is insolvent (unable to pay debts) or fails to comply with legal requirements. In such cases, working with an experienced company formation agent in UAE or liquidation expert is highly recommended.

Liquidation

in Mainland vs. Free Zones

Free Zones:

Free Zone Companies

Managed by the respective Free Zone Authority (e.g., IFZA, MEYDAN, DMCC, JAFZA, DAFZA, RAKEZ). For example, those who began their business through SRTIP free zone company formation must adhere to specific authority guidelines. While the general process is similar, differences exist in required documents, notice periods, and fees—especially for companies that took advantage of SRTIP free zone license cost benefits.

Mainland Companies

Overseen by the Department of Economic Development (DED) in the relevant emirate, often involving coordination with company formation services in UAE.

Liquidation

Step-by-Step Process

For Mainland Companies:
Liquidation

Step-by-Step Process

For Mainland Companies:
01.

Board Resolution

Shareholders must pass a resolution to liquidate the company and appoint a registered liquidator. This is common for those who used company formation services in Dubai or other emirates.

02.

Notify the DED

Submit the initial liquidation request and board resolution to the DED. This step is often managed by a company formation agent in the United Arab Emirates.

03.

Cancel Visas

Clear all employment and residency visas under the company from the GDRFA and Ministry of Labour. Visa cancellation is a standard procedure in all Dubai company formations.

04.

Appoint a Liquidator

Hire a licensed liquidation firm to issue a Liquidator’s Acceptance Letter and final liquidation report. This service is often bundled with company formation packages in Dubai.

05.

Advertise the Liquidation

Place a legal notice in two local newspapers (one in Arabic, one in English) for 45 days. This allows creditors to raise claims. Such notices are required regardless of the original formation of the company in Dubai or other emirates.

06.

Settle Liabilities

Shareholders must clear all outstanding payments including:
• Employees
• Suppliers
• Utilities
• Rent (Ejari cancellation)

04.

Appoint a Liquidator

Hire a licensed liquidation firm to issue a Liquidator’s Acceptance Letter and final liquidation report. This service is often bundled with company formation packages in Dubai.

05.

Advertise the Liquidation

Place a legal notice in two local newspapers (one in Arabic, one in English) for 45 days. This allows creditors to raise claims. Such notices are required regardless of the original formation of the company in Dubai or other emirates.

06.

Settle Liabilities

Shareholders must clear all outstanding payments including:
• Employees
• Suppliers
• Utilities
• Rent (Ejari cancellation)

07.

Obtain Clearance Certificates

Clearances must be obtained from:
• GDRFA
• Ministry of Labour
• FTA (for VAT-registered companies)
• Utilities & Telecom
• Banks

Many company formation consultants in Dubai assist with this step to ensure smooth processing.

08.

Submit Final Audit Report

A licensed liquidator prepares this after clearing liabilities. This is particularly important in LLC formation hub cases.

09.

Apply for Final Cancellation

Submit final documents to the DED to receive the official License Cancellation Certificate. This marks the conclusion of the business formation Dubai lifecycle.

Liquidation

Step-by-Step Process

For Free Zone Companies:
Liquidation

Step-by-Step Process

For Free Zone Companies:
The process varies slightly depending on the free zone (e.g., RAKEZ, UAQFTZ, SRTIP), but typically includes:
  • Application for liquidation
  • Clearance of visas and dues
  • Return of establishment card
  • Final liquidation report
  • FTA deregistration
  • License cancellation
Some free zones may skip the 45-day notice but impose their own announcements. Company formation agents in Dubai familiar with these free zones can guide you.
SHAMS
SPC
The cost is typically lower for those who previously chose cheap company formation in UAE or formation company packages.
Liquidation

Cost of Company Liquidation

In United Arab Emirates

Costs vary depending on:

  • Mainland or Free Zone
  • Number of visas
  • Required clearances
  • Liquidator’s fees
  • Government charges

Estimated cost:

Mainland

AED 8,000–15,000

Free Zone

AED 5,000–12,000

Liquidation

Timeline for Company Liquidation

Liquidation

Timeline for Company Liquidation

Mainland

2–3 months

Free Zone

1–2 months

Faster timelines are often possible in zones like Ras Al Khaimah Creative Hub and SRTIP, known for efficient company formation services UAE.

Important: Corporate Tax & VAT Deregistration

Apply for Corporate Tax & VAT deregistration with the FTA within 20 business days of liquidation. Non-compliance can result in fines up to AED 10,000. This step is crucial in all UAE business formation scenarios.
Liquidation

Why Proper Liquidation is Crucial

Improper closure can lead to:

Fines

Blacklisting

Legal action

Immigration issues

Liquidation

Why Proper Liquidation is Crucial

Improper closure can lead to:

Fines

Blacklisting

Legal action

Immigration issues

Liquidation

Documents Required

Liquidation

Documents Required

Board Resolution

Trade License copy

Enjoy corporate and income tax exemptions.

Emirates ID & passport copies of the shareholders

MOA

Liquidator's acceptance letter

Clearance certificates

Ideal for Real estate brokerage, property development, real estate agencies, and investment opportunities.

Establishment card

Final audit report

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For expert assistance with company formation in Dubai or professional support with business liquidation

As a trusted provider of company formation services in the UAE, our certified agents in UAE are here to guide you every step of the way.Reach out today to get started
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Add Your Heading Text Here

For expert assistance with company formation in Dubai or professional support with business liquidation

As a trusted provider of company formation services in the UAE, our certified agents in UAE are here to guide you every step of the way.Reach out today to get started
Please enable JavaScript in your browser to complete this form.
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