Closing a business in the UAE involves a structured process to ensure compliance with legal and regulatory requirements. Whether you’re operating in a mainland or free zone jurisdiction, understanding the steps involved is crucial for a smooth and penalty-free closure.
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Shareholder Resolution and Liquidator Appointment
The process begins with a formal resolution by the company’s shareholders to dissolve the business. This resolution must be notarized and should include the appointment of a licensed liquidator to oversee the winding-up process.
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Notification to Authorities
Submit the liquidation resolution to the relevant authority—either the Department of Economic Development (DED) for mainland companies or the respective free zone authority. This step officially notifies the government of your intent to close the business.
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Public Announcement
Publish a notice of liquidation in two local newspapers, one of which must be in Arabic. This announcement provides a 45-day period for creditors to submit any claims against the company.
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Settling Debts and Liabilities
During the 45-day notice period, settle all outstanding debts and liabilities. This includes payments to creditors, employees, and any pending government fees. Obtaining clearance certificates from relevant authorities is essential to proceed.
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Cancellation of Visas and Work Permits
Cancel all visas and work permits associated with the company, including those of employees, partners, and dependents. Coordinate with the Ministry of Human Resources and Emiratisation (MOHRE) and the General Directorate of Residency and Foreigners Affairs (GDRFA) for this process.
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Closure of Bank Accounts and Utilities
Close all corporate bank accounts and obtain closure letters from the banks. Additionally, cancel utilities such as electricity, water, and telecommunications, ensuring you receive no-objection certificates (NOCs) from each service provider.
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Final Audit and Liquidator’s Report
The appointed liquidator will prepare a final audit report detailing the company’s financial status and the distribution of assets. This report is submitted to the relevant authority as part of the closure documentation.
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Cancellation of Trade License
After fulfilling all obligations and submitting the necessary documents, apply for the cancellation of the trade license. Upon approval, the authority will issue a certificate of deregistration, officially confirming the company’s closure.
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Post-Closure Compliance
Maintain all company records, including financial statements and clearance certificates, for a minimum of five years. This is crucial for any future audits or legal requirements.
Conclusion
Winding up a company in the UAE requires meticulous planning and adherence to legal procedures. By following the outlined steps and ensuring all obligations are met, you can close your business efficiently and maintain compliance with UAE regulations.
For information on “Closing a business in UAE”, contact finnection via email at info@finnection.ae or call us at our toll free number +971 800 0120070
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