Voluntary liquidation in Dubai Multi Commodities Centre (DMCC) is one of the exit options for companies to wind up the business making losses or achieving their objectives. Being one of the most progressive free zones in Dubai, the DMCC has set out a robust solution for business owners planning to wind up their company. Businesses need to appoint company liquidators in Dubai to start with the process of liquidation.
While hiring liquidators, the business owners should choose experienced firms as the UAE liquidation process has become more complex after the introduction of Ultimate Beneficial Ownership (UBO), and Economic Substance Regulations (ESR). Also, it is important to understand each step associated with the process of winding up a company in DMCC. Read ahead to understand the latest requirements and conditions to close down a company in DMCC.
Shareholder’s Resolution
Shareholders are required to pass a resolution to liquidate the company. Along with the decision to liquidate the company, the resolution should also state the appointment of a liquidator. The liquidator should be an audit firm in the UAE. The liquidator will carry out the entire process of liquidation in DMCC on behalf of the company owners. Business owners should take care to hire reputed company liquidators in Dubai to complete the process efficiently.
Confirmation of appointment from Liquidator
In the next step of company liquidation in DMCC, the liquidator should confirm their appointment to the free zone authority. The confirmation of appointment should be in the form of a letter written on their company letterhead with the original signature from the authorised signatory.
Return All the Legal Documents
The business owner or shareholders must return all the legal documents of the company to the DMCC Authority. The legal documents may include License, Memorandum of Association (MoA), Certificate of Registration, Share Certificates, Personnel Secondment Agreement etc. In case any document is lost, the management should submit an undertaking letter along with fees for each document lost.
Hand Over Establishment Card
If any establishment card has been issued, it must be returned to the DMCC Authority. The establishment card must be handed over along with a fee for closing the file in Immigration. In case the establishment card is lost, the company should present an undertaking letter along with the fee for closing the file in the Immigration. A police report should also be submitted.
Submit Clearance Letters
The company should submit a clearance letter from utility providers such as Etisalat, Du, and DEWA. Clearance should also be obtained from the bank where the company has an account. The clearance letter should confirm that the company has closed all accounts and services.
No Objection Certificate from Customs
A No Objection Certificate (NOC) has to be obtained from Dubai Customs and submit it to the DMCC Authority. The submission of NOC from Customs applies to all Trading License holders undergoing company liquidation in DMCC. NOC can be obtained by applying through the website of Dubai Customs. Company liquidators in Dubai can advise businesses on obtaining the NOC.
Clearance Letter from the Landlord
Companies with a physical office are required to obtain a clearance letter from the landlord. The NOC should state the landlord has no objection toward the company’s liquidation in DMCC and there are no outstanding rent or liabilities. Companies operating from Flexi-desks must liaise directly with the Business Centre Team to terminate the lease. The termination process is still necessary for expired leases.
Clearance for Companies Carrying out Special Activities
Companies that carry out special activities in Dubai must obtain clearance from the government bodies that regulate such activities. For instance, educational institutions or training institutes must obtain clearance from the Knowledge and Human Development Authority (KHDA), real estate businesses must get clearance from RERA and healthcare-related companies must obtain NOC from Dubai Health Authority (DHA). Company liquidators in Dubai can advise the business owners on the list of special activities and relevant regulatory bodies.
NOC from Community Property and Assets Management
Companies that own property in Almas, Au, Ag and Jewellery and Gemplex Towers must obtain clearance from Community Property and Assets Management (CPAM), DMCC.
Cancellation of Visas and other Permits
Companies undergoing liquidation in DMCC must cancel their visas, including the employee visas. They should also cancel PIC (Permanent Identity Cards) and TAC (Temporary Access Cards) issued under the company’s name. The cancellation can be done through the DMCC portal.
Lock-in Period for Company Liquidation in DMCC
The notice of liquidation will be published by DMCC for 14 days. Creditors or any other parties can raise their objection to the company’s liquidation in DMCC during this period.
VAT De-registration
The process of VAT De-registration applies to companies that have already registered for VAT. By deciding to undertake liquidation, a company becomes eligible to apply for VAT De-registration in the UAE. As per the UAE VAT Law, companies must apply for VAT De-registration within 20 days of becoming eligible for it. The Federal Tax Authority (FTA) will impose penalties up to AED 10,000 on companies that fail to comply with this rule. Business owners should promptly apply for VAT De-registration as fines will further delay the process of company liquidation in DMCC.
Maintaining Real Beneficiary Register
As per Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO), companies undergoing liquidation in the UAE must hand over their Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone authority within 30 days of appointing the liquidator. The liquidator or administrator must also maintain the two registers for at least five years from the date of liquidation. Hefty penalties will be imposed on the companies that violate this requirement.
Comply with Economic Substance Regulations
Companies under liquidation in DMCC must comply with Economic Substance Regulations (ESR) if they carry out any of the nine relevant activities in the UAE. The nine relevant activities are banking, insurance, holding company, lease-finance, investment fund management, shipping, headquarters business, Intellectual Property business and distributions and service centre business. They must comply with ESR obligations such as ESR notification filing and report submission. Failing to comply with the regulations will attract hefty penalties from the National Assessing Authority.
Final Liquidation Report
The liquidator must submit a liquidation report and a closed audit report at the end of the liquidation process in DMCC. The DMCC will then issue a License Termination Letter and a De-registration letter.
Hire the Best Company Liquidators in Dubai, UAE
Business owners can opt for voluntary liquidation in DMCC to wind up their companies operating in the free zone. The process of liquidation in the UAE has become more complex with the introduction of ESR and UBO, which means the companies need to approach the winding-up process more carefully. Leading company liquidators in Dubai such as Jitendra Business Consultants (JBC) can help the business owners simplify the DMCC liquidation process.
JBC is one of the leading providers of company liquidation services in Dubai with specialised expertise in VAT De-registration, ESR and UBO. We have a qualified team and sufficient resources to carry out the process of company liquidation in DMCC with finesse. Call our efficient company liquidators in Dubai to wind up your company without any hassle.