Closing a free zone company in the UAE requires careful planning and adherence to specific procedures outlined by the free zone authority where the business is registered. Whether your decision is due to financial challenges or strategic reorganization, following the proper steps is essential to ensure a smooth and compliant closure. Here’s a detailed guide on how to close a free zone company in the UAE.
Understand the Free Zone Authority’s Requirements
Each free zone in the UAE has its own set of rules and regulations regarding company closure. Authorities like DMCC (Dubai Multi Commodities Centre), JAFZA (Jebel Ali Free Zone), or DIFC (Dubai International Financial Centre) may have unique requirements, but the general process is similar.
It’s important to consult the specific free zone authority’s guidelines to understand:
- Documentation needed
- Fees for liquidation
- Deadlines for submitting documents
Pass a Resolution to Liquidate
If your company has shareholders, they must pass a resolution to liquidate the business. This resolution is typically notarized and attested (if applicable). It should explicitly state the intention to close the company and appoint a licensed liquidator.
Key points:
- Shareholder approval is mandatory.
- The resolution may need attestation from relevant authorities.
Appoint a Licensed Liquidator
Most free zones require you to appoint a registered liquidator to oversee the process. The liquidator’s role includes:
- Preparing a liquidation report.
- Settling outstanding debts.
- Distributing remaining assets to shareholders (if applicable).
The free zone authority will often provide a list of approved liquidators to choose from.
Settle Financial Obligations
Before proceeding with the company closure, all financial obligations must be cleared. This includes:
- Paying off any debts to creditors.
- Clearing all outstanding utility bills and other dues.
- Canceling contracts with suppliers and service providers.
- Settling employee salaries and end-of-service benefits.
Ensure all payments are documented, as the free zone authority may request proof.
Cancel Licenses, Visas, and Permits
You’ll need to cancel all business licenses, visas, and related permits associated with the company. This includes:
- Employee visas
- Owner visas
- Sponsorships under the company’s name
The free zone authority will guide you on the process and may charge fees for these cancellations.
Submit the Required Documents
The free zone authority will request specific documents to process the company’s closure. Commonly required documents include:
- Official liquidation application form
- Shareholder resolution to liquidate
- No Objection Certificates (NOCs) from banks, utility providers, and other authorities
- Liquidation report from the liquidator
- Copies of company licenses and registration certificates
Be sure to double-check the documentation requirements with your specific free zone.
Publish a Notice of Liquidation
Some free zones require a public notice of the company’s liquidation. This is often published in local newspapers for a specified period (usually 15-45 days) to give creditors a chance to raise any claims against the company.
After the notice period ends, and if no claims are raised, you can proceed with the final steps.
Obtain Clearance Certificates
Before deregistration, you must obtain clearance certificates from:
- Banks (to confirm account closure)
- Government entities (e.g., for utilities or customs)
- Free zone authorities (to confirm dues are cleared)
These certificates ensure that the company has no outstanding obligations.
Finalize the Liquidation Process
Once all documents are submitted and clearances are obtained, the free zone authority will issue a termination certificate confirming the company’s closure. This marks the official deregistration of your business.
Additional Tips for a Smooth Closure
Plan Ahead
Start the liquidation process early to avoid penalties or delays.
Hire Professionals
Engage a legal consultant or liquidator to guide you through the process.
Maintain Records
Keep copies of all documents and correspondence for future reference.
Conclusion
Closing a free zone company in the UAE involves several steps, from obtaining shareholder approval to settling financial obligations and securing clearances. By following the free zone authority’s specific requirements and engaging the right professionals, you can ensure a smooth and compliant company closure.
If you need assistance with closing your free zone company, consider consulting with licensed liquidators or business setup experts in the UAE to simplify the process.
