Dubai Studio City free zone is touted as a global hub for production, broadcasting and entertainment businesses. The free zone is being regulated by the Dubai Development Authority (DDA), which oversee the licensing, regulation and de-registration of the companies operating in Dubai Studio City. Business owners planning to undertake company liquidation in Dubai Media City must follow the rules set out by the DDA to wind up their firms without any legal hassle.
The steps for liquidating a company in Dubai Media City is rather straightforward. However, the business owners need to ensure compliance with a few additional compliance requirements such as Economic Substance Regulations (ESR), VAT De-registration and Ultimate Beneficial Ownership (UBO). This article sheds light on how the businesses owners can wind up their companies in Dubai Studio City free zone without any hassle. Read ahead for the major steps in closing down a company in Dubai Studio City.
1. Notify the Free Zone Authority
Once the decision to liquidate the company has been made, the shareholders should submit a notice to the DDA, informing the Authority about the liquidation. The notification should also mention the reason the wind up the company in Dubai Studio City free zone.
2. Board Resolution to Liquidate the Company
After sending a liquidation notice to the DDA, the shareholders should pass a resolution to liquidate the company. The resolution should contain the name and address of the company liquidator in Dubai, who will oversee the process of winding up. The shareholder’s resolution must be prepared on the company’s letterhead and must be notarized by the Notary Public. The resolution should be signed by the shareholders before sending it to the DDA along with the mandatory fee for liquidation in Dubai Studio City.
3. Letter of Confirmation from Liquidator
The shareholders must appoint a liquidator to wind up the company. The liquidator can be an audit firm holding a valid license to carry out its operations in the UAE. It is advisable to choose company liquidators in Dubai with adequate experience and knowledge.
4. Newspaper Advertisement about Company Liquidation
An advertisement about the liquidation of the company must be published in both English & Arabic newspapers. The advertisement should clearly specify that any interested party can make a claim against the liquidation within a lock-in period of 45 days. The lock-in period is counted from the date of publication. DDA won’t entertain any objection raised after the end of the lock-in period.
5. Obtain Mandatory Clearances
A NOC must be obtained from the finance department of the TECOM Investments, clearing off all pending dues. A clearance certificate must be secured from the leasing department on the day in which the company vacates the free zone premises. NOCs must be obtained from the Government Services Operations (Including PO Box and Visa Cancellation), Dubai Customs, DEWA & Etisalat / Du. Most importantly, a closure letter from the bank must be obtained after closing the company’s bank count.
6. Cancellation of Visas
Company liquidators in Dubai must ensure that the visas of all the employees are cancelled. Also, immigration and labour department clearances must be obtained. The company’s establishment card also must be cancelled after the visa cancellation.
7. VAT De-registration
VAT-registered companies must apply for VAT-deregistration before filing for company liquidation in Dubai. As per the UAE VAT Law, a VAT-registered company must apply for de-registration within 20 days of becoming eligible for it. Companies that fail to apply for de-registration within the stipulated timeframe will attract penalties up to AED 10,000.
8. Economic Substance Regulations
Companies under liquidation must meet their ESR obligations if they carry out any of the nine Relevant Activities in the UAE. The nine Relevant Activities 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. If the company has carried out any one of those activities, it must fulfil ESR obligations such as ESR notification filing, ESR Report submission and meeting Economic Substance Test. Failing to meet ESR requirements while undergoing liquidation in Dubai will lead to hefty penalties.
9. Ultimate Beneficial Ownership Regulations
Companies in the UAE must disclose the details of their Ultimate Beneficial Owner to the DDA. As per the Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership, the companies under liquidation in Dubai Studio City must also meet their UBO obligations. They should hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the DDA within 30 days of appointing the liquidator. Furthermore, the liquidators and administrators must maintain the RBR & PSR for at least five years from the date of liquidation. Companies will incur hefty administrative fines for failing to meet their UBO obligations.
10. Submission of Liquidation Report
Company liquidators in Dubai must hand over the liquidation report at the end of the process. Once the liquidation report is received, the DDA will remove the name of the company from the register and cancel the trade license of the liquidated company.
Work with the Best Company Liquidators in Dubai, UAE
Companies operating in Dubai Studio City free zone can wind up the operations by opting voluntary liquidation process. The process of liquidation in Dubai is lengthy and may consume more time. By hiring experienced company liquidators in Dubai, such as Jitendra Business Consultants (JBC), the business owners can simplify the liquidation process. JBC can help the business owners liquidate the company by navigating complex requirements such as VAT, ESR, UBO etc.
