RAK ICC in the UAE is one of the most reputed offshore that offers the best economical and efficient company formation options for foreign investors. However, the investors are required to undertake company liquidation in the UAE once the RAK ICC company ceases to continue its operations. The investors can opt for voluntary liquidation in RAK ICC by appointing a company liquidator with the appropriate publication in the local media.
Some investors may think that they can abandon their company without any consequences however, this is not true as the owners’ liabilities will not cease if they abandon and they have to face serious consequences. Company liquidators in the UAE advise you to opt for voluntary liquidation, which is the best exits strategy for offshore companies.
This article guides you through the process and the latest requirements of liquidation of a RAK ICC company. We have included all the latest requirements as of 2021 with a special focus on Economic Substance Regulation (ESR) and Ultimate Beneficial Ownership (UBO). Read ahead.
1. Declaration of Solvency
As per Article 204 of RAK ICC Regulations 2018, the directors of the company must make a declaration of solvency or a resolution in the approved form. The declarations should state the reason for liquidating the RAK ICC company and the time to complete the liquidation process. The resolutions should be passed and signed by all the directors of the RAK ICC company.
2. Appointment of Company Liquidator
The directors must appoint a liquidator by passing a board resolution. The liquidator is required to file within 14 days of his appointment, the following documents:
- a notice of his appointment in the approved form
- the declaration of solvency made by the directors or a certified extract in the approved form
- a copy of the liquidation plan
- Notify his appointment to the RAK ICC authority
A liquidator is an audit firm licensed in the UAE. The liquidator will be handling all the mandatory steps for winding up a RAK ICC company. Once the liquidator is appointed, the powers of the directors will cease.
3. VAT De-registration
If a RAK ICC company is registered for Value Added Tax (VAT) in the UAE, it must apply for registration. Liquidation makes a company eligible for VAT de-registration and all companies must apply for VAT de-registration within 20 business days of becoming eligible. Companies that fail to do so will incur penalties up to AED 10,000. A company under liquidation in the UAE can’t afford to incur penalties from Federal Tax Authority (FTA) as it leads to a waste of money and time.
4. Maintenance of Real Beneficiary Register
Companies under liquidation in the UAE must comply with the recent UBO regulations. As per Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership, companies that are winding up must hand over the Real Beneficiary Register and Partners and Shareholders Register if any, or a true copy to the Registrar within 30 days from the date of the liquidator’s appointment. The liquidator or the administrators are also required to maintain the Registers for at least five years from the date of liquidation.
5. Economic Substance Filing Requirements
A company under liquidation in RAK ICC should assess its ESR obligations to ensure compliance. If the company has carried out any of the nine Relevant Activities at the time of liquidation, it has to meet ESR obligations such as filing annual ESR notification, submit ESR Reports and should meet the Economic Substance Test for any period during which it carries on a Relevant Activity and derives Relevant Income. Considering the companies that offer company liquidation services in the UAE will help RAK ICC firms avoid hefty ESR non-compliance penalties.
6. Transfer of Intellectual Property
If the company has any trademark patent or copyright registered under its name, then it should be transferred before the conclusion of liquidation. The companies can opt for licensing, or assignment processes with the help of IP attorneys to transfer the intangible assets.
7. Closing of Bank Account
The directors should ensure that all the bank accounts associated with their RAK ICC offshore entity should be closed. The liquidator will need a bank account statement for the last financial year to compile the Liquidator’s report. It is also important to obtain the Bank Account Closure Confirmation from the bank as proof for account closure.
8. Newspaper Advertisement
The company liquidator in the UAE must publish the commencement of the liquidation of the entity in one local daily newspaper. The notification serves as an invitation for anyone to object to the liquidation within 15 days from the date of the publication.
9. Completion of voluntary liquidation
Once the RAK ICC company liquidation is completed, the liquidator should file a statement that the liquidation has been completed. The liquidator must also submit the liquidation report to the RAK ICC Authority marking the completion of the company liquidation process. Upon receiving the report the Registrar will initiate the following actions
(a) strike off the company from the Register of Companies
(b) issue a certificate of dissolution in the approved form certifying that the company has been dissolved
The dissolution of the company is effective from the date of the issue of the certificate. Hire the best company liquidators in the UAE to swiftly completing the process of closing down the company.
Hire the Best Company Liquidators in the United Arab Emirates
Carrying out voluntary liquidation in the UAE is the best exit strategy for offshore companies registered with RAK ICC. The directors of the company can hire the best company liquidators in the UAE such as Jitendra Business Consultants (JBC). In terms of experience and qualified professionals, JBC remains to be the leader in providing company liquidation services in the UAE. JBC can responsibly handle the maintenance of RBR & PSR registers for the companies along with ensuring compliance with ESR filing requirements and VAT De-registration. JBC’s qualified company liquidators in the UAE are key to ensure that your company is shut down without any hassle.