How to liquidate a company in the UAE?

Sole Proprietorship / Establishment - one participant

1. Submit an application through the Department of Economy and Tourism website , providing the following documents:

• permission to close the company from the Ministry of Human Resources and Emiratisation;
• permission to close the company from the General Directorate of Residency and Foreigners Affairs;
• a certificate of absence of any debts and closed accounts with all service providers (banks, water and electricity, etc.);

2. Obtaining a certificate from the landlords of the company's office

3. Obtaining additional information from government agencies if the activity is regulated by these agencies

4. Submit an application on the website, attaching all the received certificates

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Commercial Companies (2 or more participants)

Liquidation of companies with several founders can be divided into two stages:

1. First stage

1. Prepare a notarized protocol of the general meeting confirming the liquidation of the company.
2. Appoint a licensed liquidator. The liquidator cannot be the company's current auditor or a person who has audited the company's accounts in the five years preceding the appointment. Audit firms or certified public accounting firms are usually appointed as liquidators.
3. Prepare an official letter from the liquidator accepting his duties.
4. Apply for the cancellation of the license by completing the required form through the Department of Economy and Tourism website, after which the Department will issue a certificate of liquidation.
5. Publish a notice of liquidation in two local newspapers to notify creditors. They have 45 days from the date of the newspapers to make their claims.

2. Second stage

1. After 45 days from the publication of the liquidation, send a letter to the Department (Department of Economy and Tourism) on behalf of the liquidator and participants stating that there are no objections to the liquidation from third parties. The Department may also require permission from other government agencies to cancel the license.
2. Cancel the company card at the Ministry of Human Resources and Emiratisation.
3. Cancel visas of company-sponsored foreign participants at the Ministry Of Residency and Foreigners Affairs office applicable to them.
4. Obtain certificates from all service providers (banks, water and electricity, etc.) about the absence of any debts and close all existing accounts with them.
5. Obtain a certificate of lease termination from the landlords of the company's office.
6. Obtain certificates from the relevant government agencies if the activity is regulated.
7. The liquidator must conduct an audit to confirm that the company is free of financial encumbrances. As stated above, the liquidator must be an auditor independent of the company.
8. Submit all the above documents to the Department of Economy and Tourism to obtain approval for final cancellation.

The exact fee amount will be set by the Department of Economics and Tourism and after paying the fees, a license cancellation certificate can be obtained.

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“When interacting with government agencies, we recommend that you have all corporate documents (Business License, Certificate of Registration, Share Certificates, Memorandum of Association, Establishment card (if issued), liquidation decision), as well as documents of the company participants (Passports, Emirates ID).” Sergey Kovalkov, Head of International Practice инкорпораций

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Freezing of license

There is also the possibility of temporarily freezing a company's license for up to three years, subject to payment of a special fee. To do this, contact the Department of Economy and Tourism.

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Why is this needed:

• If a company continues to operate but does not renew its license after its expiration date, the company will be fined. If the license is not renewed for 5 consecutive years, it will be automatically cancelled.
• In addition, any member of the company who has a company with an expired license will not be able to renew the license or register any other company until the issues with the first company are resolved.
• Freezing a license can stop fines from accumulating. At the same time, the owner of a frozen license can start a new business by applying for a new license in his or her name.
• An application for freezing a license can only be submitted once during the company's existence.
• The licence freeze fee is AED 2,000 per year and AED 210 per month from the date of licence expiry.

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