Closing a company in Dubai requires following specific steps and complying with local laws and regulations. This process can be complex and requires a solid plan to ensure that the company closes legally and properly. In this article, we will review the steps for closing a company in Dubai, in cooperation with Itqan Company, which provides the necessary support to successfully implement this process.
Starting and running a company is an exciting challenge and an ongoing effort, but in some cases entrepreneurs may face the need to close their company. This step may be difficult and complicated, but in cooperation with Itqan, a company specializing in legal and financial consulting in Dubai, the company closure process can be simplified and the necessary guidance and support provided.
In this great article, we will explore together the basic steps of closing a company in Dubai and how Etqan can help with the process. We will be subjected to the necessary legal and financial procedures, including canceling registration, closing bank accounts, settling financial obligations, settling contracts and dealing with employees and government agencies.
By consulting with Itqan’s experts, you will receive assistance in designing your company’s closing strategy in a professional and effective manner. You will be able to assess the financial and legal impact of the closure and ensure compliance with local legal requirements. You’ll get guidance on how to deal with stakeholders, including investors, suppliers, customers and employees.
Steps to close a company in Dubai
Steps to close a company in Dubai
Closing a company in Dubai is a delicate process that requires following a series of careful steps to ensure compliance with local laws and regulations. Below we will review the steps for closing a company in Dubai in detail.
First and foremost, a formal decision must be made to close the company. A meeting of the Board of Directors and shareholders should be held to reach this important decision. After making the decision, you can move to the next step.
Secondly, the relevant authorities must be informed of the closure decision. This includes informing the Dubai Department of Economic Development and other government bodies that deal with the company. In general, a formal application must be submitted containing the required information and documentation supporting the closure decision.
Third, assets need to be liquidated and financial liabilities settled. The company has to pay outstanding debts and settle other financial dues. Accurate financial reports and detailed announcements must be submitted to relevant authorities to clarify the company’s status and settle financial claims.
Fourth, licenses and registrations must be cancelled. This includes canceling all licenses and permits obtained by the company. Official requests must be submitted to cancel licenses and the required documents must be submitted to the relevant authorities.
Finally, after completing all previous steps, the company must be officially closed. The closure announcement can be published in local newspapers and the Official Gazette of Dubai. Ultimately, closing a company is an important procedure that must be carried out with caution and taking into account all required legal and administrative procedures.
Documents required to submit a request to close a company in Dubai
To apply to close a company in Dubai, there is usually a set of documents required, which usually include:
- A copy of the company’s articles of incorporation.
- A copy of the decision issued by the Board of Directors to close the company.
- The company’s latest financial report.
- The original copy of the company’s license.
- Social insurance document and work document.
- A copy of the passport of the legal official.
- Completed company closure application form.
Costs associated with closing a company in Dubai
Company closing costs in Dubai may vary depending on several factors, including:
- Closing fees: Government agencies may require fees to process a company closure request, and these fees vary depending on the type, location, and size of the company.
- Legal expenses: You may need to consult a lawyer to prepare and submit the required legal documents, and this may incur additional costs.
- Settle Debts and Obligations: Before closing the company, you may need to settle all debts and financial obligations related to the company.
- Registration and License Costs: You may need to pay remaining fees to renew licenses or other government registrations.
- Administrative costs: These may include costs such as paying financial dues to employees, submitting the necessary documents to close bank accounts, and others.
How to close a company in Dubai
Tax obligations necessary to close a company in Dubai
When closing a company in Dubai, it may involve some tax liabilities that you should pay attention to:
- Settlement of due taxes: All taxes due to the company must be paid, including value added tax (VAT), income tax, and any other taxes.
- Submitting final tax declarations: You may need to submit final tax declarations for the company for the period prior to its closure, in order to ensure that there are no accumulated tax dues.
- Tax Refund: If a company qualifies for a tax refund, an application must be submitted to recover any amounts owed from the tax authorities.
- Providing notice of closure: A formal notification must usually be given to the relevant authorities in Dubai of the company’s intention to close its business.
- Tax deregistration: The company must be deregistered with the Tax and Customs Department after the company is closed.
Topics that may interest you: Establishing a company in Dubai
Impact of company closure on visas and work permits
Closing the company may affect the visas and work permits of its workers directly. Here are some possible effects:
- Work visas: Company employees may be required to search for new job opportunities and obtain new work visas after the company closes.
- Residence permits: Existing permit holders may have to find alternative solutions to renew their residence permits, whether that is through transferring the visa to a new company or requesting a new visa.
- Voluntary departure: Some workers may have to decide to voluntarily leave the country if they are unable to find new job opportunities after the company closes.
- Compensation and Rights: Employers must provide appropriate compensation in accordance with local laws, and secure employees’ rights related to final termination of employment.
- Settle personal debts: Some workers may need to settle personal debts before leaving the country, in order to avoid any potential legal problems.
Specific approval required to cancel public joint stock companies
In the UAE, to cancel public joint stock companies, there are several specific approvals that are required according to local laws and regulations. These approvals include at a minimum:
- Approval of the Ordinary General Assembly: Approval of the Ordinary General Assembly must be obtained to cancel the company. This requires calling a general assembly meeting and obtaining the approval of a majority of the qualified votes of shareholders.
- Approval of the judicial body: Approval of the competent judicial body in the emirate in which the company is headquartered may be required. An official application must be submitted to the judicial authority to obtain approval to cancel the company, and detailed documents and information are usually provided explaining the reasons and procedures taken for cancellation.
- Approval of the General Business Regulatory Authority (DED) in the relevant emirate. An official application must be submitted to the Authority and the required documents and information must be submitted to obtain approval to cancel the company.
- Settlement of obligations and debts: All obligations and debts owed to the company must be settled before obtaining approval to cancel them. Debts owed to suppliers and other receivables must be paid and proof of this must be provided.
Important tips to simplify and speed up the process of closing a company in Dubai
Here are some important tips to simplify and speed up the company closing process in Dubai:
- Plan ahead: Create a solid plan for the closing process that includes all required steps and specific deadlines.
- Communication with relevant authorities: Make sure to communicate with the relevant government authorities such as the Department of Trade and Industry and the Department of Taxes and Customs to understand the necessary procedures and requirements.
- Payment of financial obligations: Settle all debts and financial obligations related to the company, including taxes, fees, and debts to suppliers.
- Submitting the necessary documents: You may need to submit a set of documents such as the articles of incorporation, the decision to close the company, final financial reports, etc.
- Consult a lawyer or accountant: Work with a professional lawyer or accountant to help you complete the legal and financial procedures correctly and efficiently.
- Recording the closure in official records: Do not forget to register the closure of the company in all relevant government agencies and submit final reports.
- Asset and property distribution: Distribute the company’s assets and property in an appropriate manner and in accordance with local laws.
In conclusion, companies in Dubai must follow a series of precise steps to successfully complete the company closure process in accordance with legal and administrative requirements. After an official decision to close is made, relevant authorities such as the Department of Economic Development and other government bodies must be informed. Followed by the liquidation of assets and settlement of financial obligations, where the company must pay off debts and provide detailed financial reports and announcements. The licenses and permits granted to the company are then cancelled, by submitting license cancellation requests and submitting the required documents. Finally, the company’s closure is officially announced through publication in local newspapers and the Official Gazette.
The most important frequently asked questions about closing a company in Dubai
What are the basic steps to close a company in Dubai?
Owners must follow a specific approach that includes submitting a closure request to the relevant authorities, settling debts and company obligations, and submitting the required documents.
Do all debts need to be paid before closing the company in Dubai?
Yes, all debts and financial obligations must be paid before closing the company in Dubai. Owners are required to provide proof of debt settlement before receiving approval to close.
How long does it take to complete the company closing process in Dubai?
The time to complete the company closing process can vary depending on several factors, including compliance with administrative procedures and debt settlement. It may take a few months to complete the procedures completely.
Are there any tax obligations after closing the company in Dubai?
Certain tax obligations may apply after a business closes, such as filing final tax reports and paying any taxes due. You are advised to consult with a professional accountant for advice on potential tax liabilities.
What impact does the company closure have on visas and work permits?
After a company closes, the visa and work permit status of the employees involved must be adjusted. You may need to cancel work permits and update the visa status of workers so that they can legally remain in the country.
