How to close a company in the UAE?

Change is an inevitable factor in the world of business and investment, and in some cases companies are forced to go through the process of liquidation due to various circumstances: change in strategy, unwillingness to continue operations or other reasons. In the UAE, where business goes hand in hand with rapid development, winding up a company requires strict adherence to laws and procedures. Antwort Law talks about the stages and requirements of this procedure for those facing the need to liquidate their enterprise in the UAE.

 In our experience, liquidation of a company takes from 1 to 2 months, and the cost of the process is from $3,000, depending on the type of company, the zone of its registration (especially if it is a free economic zone) and the complexity of the liquidation procedure. For clients who are faced with the need to liquidate a company, we go through the following steps:

1. Making a decision on liquidation: It is necessary to hold an internal meeting of the company’s founders or board of directors to decide on liquidation. This must be documented and recorded in the minutes of the meeting.
2. Appointment of a liquidator: Once a decision has been made to wind up a company, a liquidator must be appointed. The liquidator can be either an internal employee of the company or an independent person. He will be responsible for carrying out all stages of the liquidation process in accordance with legal requirements.
3. Calculation and payment of debts: The liquidator must notify all creditors of the commencement of the liquidation process and pay all debts according to their priority.
4. Winding up: Once all debts have been paid and all company assets have been disposed of or transferred, the liquidator must formally wind up the company. This includes closing all bank accounts, terminating all contractual relationships and notifying all interested parties of the cessation of business.
5. Preparation and submission of documents to the relevant authorities: Various documents need to be prepared and submitted to the appropriate authorities in the UAE. This includes filing a winding-up application, submitting financial statements, and submitting the liquidator's report on the completion of all stages of the process.
6. Completion of the process: After carefully checking all the submitted documents and ensuring their compliance with the UAE laws, the registration authorities can issue a conclusion on the completion of the liquidation process. After this, the company is considered wound up, and its name is removed from the register of companies. The process of winding up a company in the UAE can be complex and requires careful attention to detail.

Opportunity to leave the company without closing

We do not recommend leaving the company without official closure and liquidation in the UAE due to possible legal and financial consequences. This approach can lead to accumulating debts, fines and other financial obligations, legal liability for company owners and directors, and visa issues to enter the UAE.

To avoid such consequences, it is important to properly formalise the closure of the company, following all local legislation requirements. To ensure the successful completion of this process, it is recommended to contact experienced professionals who can provide qualified assistance and advice at every stage. Antwort Law is ready to provide comprehensive support in liquidating a company in the UAE, ensuring compliance with all necessary rules and regulations and minimising possible risks and costs for the client.

Diana Gulevskaya

Partner
Antwort Law