Company Liquidation in UAE is the formal procedure for shutting down a business in the country. Alternatively, it's referred to as "winding up" or "closing" a business. During liquidation, all of the company's assets are sold off, and the proceeds are then used to pay off any outstanding debts and expenses. After paying these responsibilities, any money that remains might be divided among the company's shareholders.

When a business goes through liquidation, it stops operating and stops hiring people. The business license of the company is canceled as part of the liquidation process, and its name is deleted from the Trade Registry. The company is now regarded as no longer existing by the government.

Company Liquidation in Dubai

In the UAE, a company may need to go through liquidation for one of two main reasons:

  • The company has fulfilled its initial objectives and the entity is no longer required.
  • The company is regarded as insolvent.


Even if there are no outstanding debts to be paid to creditors, a company that is no longer required should be formally liquidated. If the trade license is not properly liquidated, there may be serious consequences.

During the liquidation process, violating regulations could result in several penalties. Additionally, the UAE government places the company, its directors, and its shareholders on a blacklist. Such consequences may negatively affect their involvement in other businesses and may even prevent them from starting new businesses in the future.


Factors of Company Liquidation in UAE

The Company Liquidation process can be influenced by three factors:

  • Type of Ownership
  • Type of Liquidation
  • The jurisdiction of registration, whether Mainland UAE or Free Zone


Type of Ownership

Applying for the cancellation of the business license through the relevant Department of Economic Development is the first step in winding up a sole establishment or proprietorship. Furthermore, it is essential to secure the required permits from relevant authorities, such as

  • Ministry of Human Resources and Emiratisation
  • Directorate of Residency and Foreigners Affairs
  • The relevant water and electricity authorities
  • The leasing entity


It is required to appoint a liquidator if your business has the legal form of

  • General Partnership
  • Limited Liability Company
  • Simple Limited Partnership
  • Public Joint Stock Company
  • Private Joint Stock Company


Type of Liquidation in UAE

The formal process of winding up a company's operations, known as company liquidation, may be carried out either voluntarily or through compulsory measures.

Voluntary Company Liquidations:

Shareholders of a corporation have the option to voluntarily liquidate a financially sound company. Similarly to this, the directors of an insolvent business can choose to shut down operations and liquidate its assets to pay creditors.

Compulsory Company Liquidations:

Creditors can ask the court to order a company's liquidation if the company does not pay the debts within the time frame. In such scenarios, the court has the power to impose the liquidation process, obliging the business to liquidate its assets to clear the outstanding obligations.


Jurisdiction of registration

It is not necessary to appoint a company liquidator in UAE Free Zones when dissolving a business. Depending on the rules and regulations set forth by the specific Free Zone Authority where the company is registered, there may be several procedures for shutting a Free Zone Company.

It is necessary to notify the relevant Free Zone Authority in advance to initiate the closure of a Free Zone company. The authority will then go on to publish a liquidation notice. It will be the responsibility of business owners to get No Objection Certificates (NOCs) from utility service providers and other pertinent government or Free Zone departments as needed.

The business owners must proceed with the cancellation of staff visas and work permits as well as the closing of bank accounts after the required documents have been authorized. The Free Zone Authority should finally send them a formal termination letter, which will mark the completion of the company closure procedure.

BMS Auditing is the top Liquidation Company in Dubai with a team of Liquidators to offer full-fledged professional Company Liquidation Services in Dubai, Abu Dhabi, Offshore businesses, Free Zone Businesses and the whole parts of UAE.


Process of Company Liquidation in UAE

The Formal process of Company Liquidation in the UAE is as follows:

  • Preparation and approval of shareholders' resolution for dissolution: The dissolution of the company resolution adopted by the shareholders must be drafted and approved. The resolution must be notarized by a Notary Public for Limited Liability Companies (LLCs) registered in the UAE.

If the shareholders are not physically present in the UAE, the resolution must be notarized, followed by attestation from the UAE Ministry of Foreign Affairs and Ministry of Justice, at the relevant UAE embassy. Most Free Zone companies need to have their documents notarized by a Notary Public.


  • Appointment of a liquidator: A liquidator must be appointed, and it is necessary to receive a formal acceptance letter from the liquidator.


  • Submission of the shareholders' resolution: The shareholders' resolution must be delivered to the appropriate licensing authority along with all the required documents and fees. The required documents include a copy of the company's Trade Licence, Memorandum of Association, Powers of Attorney (if applicable), and copies of passport or Emirates ID for all partners, owners, and shareholders. Additionally, a deregistration application form must be included.


  • Publication of a notice of liquidation: Following the issuance of a provisional liquidation certificate, the business is required to publish a notice of liquidation in a publication that is accessible to the general public. The English and Arabic versions of this notice should also be published. Depending on the registered authority, different notification requirements may apply; normally, two to four notices are required.


  • Notice period: A notice period of up to 45 days could be required, depending on the registration jurisdiction. During this time, the following actions are permissible:
    • All workers and partners will have their work permits and visas canceled.
    • Obtaining a clearance letter from the Immigration Department.
    • Obtaining a clearance letter from the Labour Department.
    • Obtaining clearance letters from utility companies for water, electricity, and telecom services.
    • Obtaining a clearance letter from the leasing entity or landlord.
    • Obtaining a clearance letter from the Road & Transport Authority (RTA) if there are registered vehicles.
    • Obtaining a clearance letter from the Federal Customs Authority (FCA).
    • Closing the company's bank account and obtaining a closure letter.
    • Undertaking VAT de-registration and obtaining a VAT clearance letter from the Federal Tax Authority (FTA).


  • After the notice time expires, the appointed liquidator will begin working on the Liquidation Report. The competent Authority must receive this report and all required supporting documents. The necessary cancellation fees must also be paid. After reviewing the application, the Authority will issue a "License Cancellation Certificate" if it is approved.


Documents Required for Company Liquidation in UAE

When it comes to winding up a company in Dubai, there are specific documents that you need to prepare, as required by the Dubai government. Here's a list of the essential papers you'll need for the company liquidation process in Dubai:

  • Power of Attorney (if any)
  • Copy of the license
  • De-registration application form
  • Resolution of the shareholders
  • Copy of your Emirates identification
  • Copies of all shareholders’ passports
  • Copy of the Memorandum of Association (MOA), with any changes


Company Liquidation Services in UAE

Liquidating a company may take a long time and cost a lot of money because companies must work with many external parties and organizations to carry out things accurately and on time. Any step or missing documents could cause unnecessary delays and problems.

As a result of the implementation of the Value Added Tax (VAT), Economic Substance Regulations (ESR), and Ultimate Beneficial Ownership (UBO) regulations, the process of liquidating a company in the United Arab Emirates has become more complicated in recent years. Companies must therefore conduct the winding-up process with greater caution and precision.

For all forms of UAE entities, including LLCs, free zone businesses, and offshore companies, BMS Auditing offers comprehensive company liquidation services in UAE. Depending on the needs of the customer, our services range from full support for the liquidation process to helping with certain steps in the procedure. Please contact us for more information about our liquidation services.

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