The Dubai World Trade Centre (DWTC) is a premium UAE free zone launched in 2015 to drive foreign investments in sectors such as events & exhibitions. Entities operating in DWTC Free Zone can be closed by undertaking the process of voluntary company liquidation in Dubai. The liquidation provides an easier exit route for companies by settling the dues of all the stakeholders amicably.
The process of winding up a company in the DWTC free zone is not a laborious process if the business owners stick to the rules properly. Experienced company liquidators in Dubai will oversee the winding-up process, making things much easier for the company management. In addition to the standard procedures such as cancellation of visas and bank accounts, the business owners need to be mindful of meeting the regulatory requirements such as Value Added Tax (VAT), Ultimate Beneficial Ownership (UBO) and Economic Substance Regulation (ESR).
Many companies have incurred fines for not meeting such requirements due to a widespread misconception that companies undergoing liquidation in Dubai don’t fall within the scope of such regulations. This is wrong, and that is why we have written this article, which will help you understand the common steps and other new requirements to wind up a Company in Dubai World Trade Centre. Read on.
Board Resolution to Wind up the Company
Upon deciding to wind up the company in DWTC, the shareholders must pass a resolution to liquidate the entity. The resolution must also state the appointment of the official company liquidator. The board resolution must be submitted to the DWTC Authority after getting it notarized by the Notary Public. If corporate shareholders are involved, the board resolution must be provided by the parent company and must be attested by the UAE Embassy and Ministry of Foreign Affairs.
Letter of Confirmation from the liquidator
In the next step, the liquidator must submit a letter to the DWTC Authority expressing the willingness to liquidate the company in the DWTC Free Zone. The liquidator can be an audit firm licensed to perform its activities in the UAE.
Application for Liquidation
A liquidation form has to be submitted to the Free Zone Authority. Once the authority receives the application for company liquidation in Dubai, it will review and give approval. A provisional company liquidation certificate will be issued by the DWTC Authority.
Advertisement in the Newspaper
The details regarding the voluntary liquidation of the company should be published in two local newspapers for no less than three days. One should be in an English daily (Gulf News or Khaleej Times), and the other should be in an Arabic newspaper (Al-Bayan or Al Khaleej).
Notice Period for Liquidation
Once the newspaper advertisement has been published, a three week lock-in period will follow. The notice period allows any creditors or other interested parties to raise any objection to the liquidation of the DWTC free zone company.
Cancellation of Visas
All the visas of partners and the staff employed by the company must be cancelled. Clearance letters should be obtained from the Immigration department and Labour department. Upon completing the visa cancellation, the establishment card of the company needs to be cancelled from the immigration system.
Obtain No Objection Certificates
NOCs must be obtained from Dubai Customs, DEWA and Etisalat/Du etc. Bank account of the company must be closed, and a NOC must be obtained. A clearance certificate must also be obtained from RTA if the company has any vehicle registered against its name.
Lease Surrender
The liquidators in Dubai have to submit a lease surrender/NOC from the leasing department. In the case of a third-party business centre, the NOC must be obtained from the business centre authorities.
VAT De-registration
If the company has already been registered for VAT, liquidation makes it eligible for VAT de-registration. As per the UAE VAT Law, a VAT registrant must apply for de-registration within 20 days of becoming eligible. A company under liquidation that fails to do so will incur a penalty of AED 10,000.
Economic Substance Regulations
A DWTC company should assess if it falls within the scope of ESR while undergoing company liquidation in Dubai. If the company has conducted any of the nine Relevant Activities, they are liable to meet the ESR requirements, including ESR notification filing, submission of ESR Report and meeting the ESR test. The Relevant Activities under ESR are Banking business, Insurance business, Lease-Finance business, Investment Fund Management business, Holding Company business, Headquarters business, Shipping business, Intellectual Property business and Distribution & Service Centre business. Assessing ESR applicability before applying for liquidation in DWTC will save the companies from incurring hefty penalties.
Ultimate Beneficial Ownership Regulations
Companies undergoing liquidation in the UAE are required to meet their obligations under Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO). The companies must hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone authority within 30 days of appointing the liquidator. Moreover, the liquidator or administrator must maintain the registers for at least five years from the date of liquidation of the company. Assessing UBO compliance status before liquidation will save the companies from attracting a significant amount of penalties.
Submission of Liquidation Report
The process of liquidation of a DWTC company will conclude when the company liquidator submits the final liquidation report to the free zone authority. The name of the company will be removed from the DWTC register, and the authority will cancel the trade license of the liquidated company.
Hire the Best Company Liquidators in Dubai, UAE
Business owners thinking of shutting down the operations of their companies in DWTC must opt for a voluntary liquidation process. The process of company liquidation in Dubai has become more complex since the introduction of new compliance requirements such as VAT, ESR, UBO etc. To navigate the process successfully, business owners must appoint company liquidators in Dubai such as Jitendra Business Consultants (JBC), who are experienced in dealing with ESR, UBO etc. JBC has adequate resources and experience in helping business owners wind up a company with zero hassle. Avail of JBC’s company liquidation services in Dubai to close down a company without any complexities.