Whether due to financial restructuring, market exit, or business closure, company liquidation is a significant legal process that businesses in the UAE must handle with care. Liquidation isn’t just about closing operations—it’s about legally and transparently winding up affairs, settling liabilities, and ensuring regulatory compliance.

 

What is Company Liquidation?

Company liquidation (or winding up) refers to the legal process of closing a company, selling its assets, paying off liabilities, and distributing any remaining funds to shareholders. Once liquidated, the company is removed from the commercial register and ceases to exist as a legal entity.

Types of Company Liquidation in the UAE

1. Voluntary Liquidation

Initiated by the shareholders or owners, often due to:

  • Business goals being met 
  • Financial restructuring 
  • Group consolidation 
  • No future prospects 

2. Compulsory Liquidation

Mandated by court order due to:

  • Insolvency or bankruptcy 
  • Failure to meet legal or regulatory requirements 

Where is Your Company Registered?

The liquidation process depends on your business jurisdiction:

Jurisdiction Authority Involved
Mainland Department of Economy & Tourism (DET)
Free Zone Respective Free Zone Authority
Offshore Registered Agent & Authority (e.g., RAK ICC, JAFZA Offshore)

Step-by-Step Guide: Company Liquidation in the UAE

 Step 1: Board Resolution

Pass a resolution by the board of directors (for LLCs or private companies) approving the liquidation. This resolution must be:

  • Notarized 
  • Submitted to relevant authority 
  • Published (for some entities) 

 Step 2: Appoint a Licensed Liquidator

A registered audit firm or liquidation expert must be appointed to handle the winding-up process and issue an official Liquidator’s Letter.

Pro Tip: Choose a liquidator approved by your licensing authority. Hallmark Auditors is authorized for liquidation across Free Zones and Mainland Dubai.

 Step 3: Apply for Initial Approval

Submit initial documents to the relevant licensing body:

  • Copy of trade license 
  • Shareholder passports 
  • Board resolution 
  • Liquidator’s Letter 
  • Emirates ID (if applicable) 

Once approved, the process moves to public notification.

 Step 4: Publish Notice of Liquidation

A liquidation notice is published in two local newspapers (in Arabic) for 45 days. This notice allows any creditors to raise objections or claims.

 During this period, the company must:

  • Stop new business activities 
  • Begin clearing debts and employee dues 

 Step 5: Cancel Visas & Close Accounts

  • Cancel all employee visas and labor cards 
  • Settle all gratuity payments 
  • Cancel immigration and MOHRE records 
  • Close corporate bank accounts 

Failure to cancel visas can result in fines or rejection of your liquidation application.

 Step 6: Clearance Certificates

Obtain No Objection Certificates (NOCs) from:

  • Etisalat/DU (telecom) 
  • DEWA/SEWA/FEWA (utilities) 
  • Ministry of Human Resources & Emiratisation 
  • Emirates Post (PO box) 
  • Free Zone authority or DET (final approval) 
  • Bank (account closure confirmation) 
  • Lease agreement termination (Ejari or equivalent) 

  Step 7: Submit Final Audit Report

The liquidator must prepare and submit a Final Audit Report (Statement of Affairs) covering:

  • Assets & liabilities 
  • Debt settlements 
  • Employee dues 
  • Remaining balances 

This is a mandatory document to complete deregistration.

 Step 8: Obtain Final Liquidation Certificate

Once the audit and compliance are verified, the authority issues a Final Liquidation Certificate and cancels the trade license.

 Congratulations, your company is now officially closed.

 Required Documents for Liquidation in UAE

  • Trade license copy 
  • MOA & company documents 
  • Shareholder passports & Emirates IDs 
  • Board resolution 
  • Liquidator’s appointment letter 
  • Final audit report 
  • Clearance letters 
  • Newspaper publication proof 
  • Visa cancellation documents 
  • Tenancy contract cancellation (Ejari) 

 How Long Does Company Liquidation Take?

Jurisdiction Estimated Duration
Mainland (LLC) 60 – 90 days
Free Zone (DMCC, DAFZA, etc.) 30 – 60 days
Offshore (RAK ICC, JAFZA) 20 – 45 days

Note: Timelines depend on the completeness of documents, NOC processing, and final authority review.

What Are the Costs of Liquidation?

Component Estimated Cost (AED)
Newspaper Advertisement (2 papers) 1,500 – 2,500
Liquidator Fees 5,000 – 15,000
Visa Cancellation 500 – 800 per visa
Final Audit & Statement of Affairs 2,500 – 10,000
Authority & admin fees 1,000 – 3,000

The total cost typically ranges between AED 10,000 – AED 25,000+, depending on company size, sector, and number of employees.

 Avoid Penalties: Tips for Smooth Liquidation

  • Start early before license expiration 
  • Ensure zero liabilities and debts 
  • Use an experienced, approved liquidator 
  • Avoid delaying newspaper publication 
  • Maintain proper records for final audit 
  • Comply with visa and labor law obligations 

 How Hallmark Auditors Can Help

At Hallmark Auditors, we provide end-to-end company liquidation services in the UAE, including:

  • Legal documentation 
  • Audit and liquidation reports 
  • Visa cancellations 
  • Clearance coordination 
  • Final de-registration 

With 20+ years of experience, our specialists ensure a compliant, smooth, and stress-free closure of your business in Dubai or any UAE Free Zone.

 

Understanding how to liquidate a company in the UAE is essential to protect your legal standing and reputation. From audit reports to license cancellation, the process involves multiple steps that must be followed diligently.

If you’re planning to exit the UAE market or restructure your business, consult professional auditors and legal advisors to ensure a hassle-free experience.