Company Liquidation in Hamriyah Free Zone (HFZA) Process, Timeline & Costs

Company liquidation in Hamriyah Free Zone Authority (HFZA) is the formal legal process of winding up a business registered in the zone. It involves appointing a licensed liquidator (where required), settling outstanding debts and employee entitlements, cancelling visas and utility accounts, obtaining clearance letters from relevant authorities (customs, MOHRE, immigration, utilities, FTA where applicable), and submitting a final liquidation report so HFZA can cancel the trade licence and deregister the company. Liquidation ensures creditors are paid, legal obligations are closed off, and the company is removed from the free-zone registry without future liabilities.

Company Liquidation in Hamriyah Free Zone Overview

The Hamriyah Free Zone Authority (HFZA), established in 1995, is one of the UAE’s leading industrial and commercial hubs, offering 100% foreign ownership, zero corporate tax, and access to major ports and shipping routes. While the zone provides a business-friendly environment, some companies eventually decide to cease operations due to financial, strategic, or operational reasons.

If you’ve decided to close your company in the Hamriyah Free Zone, the process involves formal liquidation, requiring a licensed liquidator, regulatory notifications, and multiple clearances to ensure full compliance with UAE laws.

Types of Company Liquidation in Hamriyah Free Zone Authority (HFZA)

There are two main types of company liquidation in the Hamriyah Free Zone Authority (HFZA) Voluntary Liquidation and Involuntary Liquidation. Understanding the difference between these helps business owners follow the correct process and avoid legal or financial complications.

Voluntary Liquidation

This type of liquidation is initiated by the shareholders or directors of the company when they decide to close the business on their own terms.

Key features:

- Usually applies when a company has achieved its business goals, is no longer profitable, or the owners wish to exit the market.
- Requires a Board Resolution signed by all shareholders confirming the decision to liquidate.
- A licensed liquidator must be appointed to handle the process, including asset disposal, debt settlement, and final reporting to HFZA.
- The company must also publish a liquidation notice in local newspapers for 15–45 days to allow creditors to raise claims.
- Once all clearances and reports are submitted, HFZA issues a Final Liquidation Certificate confirming the company’s dissolution.

This is the most common and straightforward form of liquidation for businesses in HFZA.

Involuntary (Compulsory) Liquidation

Involuntary liquidation occurs when a company is forced to close by HFZA or a UAE court, typically due to:

- Insolvency or inability to pay debts.
- Violation of HFZA regulations.
- Expiry of license without renewal.
- Failure to maintain business activity or regulatory compliance.

In such cases, the Free Zone Authority or the court appoints an official liquidator to manage the winding-up process on behalf of creditors and authorities.

This process is more complex, as it may involve legal proceedings, audits, and debt recovery measures before the company is officially struck off.

Step-by-Step Process of Company Liquidation in HFZA

Step 1: Board Resolution

The liquidation process begins with the Board of Directors or Shareholders passing a formal resolution to close the company.

The resolution must clearly state the reason for liquidation.
It must be signed by all shareholders and notarized before submission.

This resolution acts as the legal foundation for initiating the winding-up procedure.

Step 2: Appointment of a Licensed Liquidator

The company must appoint a licensed audit firm or approved liquidator to manage the process.

Once appointed, all powers of the directors are transferred to the liquidator.
The liquidator oversees asset disposal, debt settlement, and ensures all actions comply with HFZA regulations.
A Letter of Acceptance from the liquidator must be submitted to HFZA.

Step 3: Notify the Hamriyah Free Zone Authority (HFZA)

Notify HFZA formally about the liquidation decision by submitting the following:

Signed and attested Board Resolution
Original Trade License and incorporation documents
Liquidator’s appointment letter and acceptance confirmation

HFZA will review and acknowledge the liquidation request before you proceed further.

Step 4: Settle All Financial and Legal Obligations

Before obtaining final approval, ensure all dues are cleared:

Cancel employee visas and labor cards through the Ministry of Human Resources & Emiratisation (MOHRE).
Obtain No Objection Certificates (NOCs) from:
- Customs Authority (if trading company)
- Sharjah Electricity, Water, and Gas Authority (SEWA)
- Telecommunication providers (Etisalat/Du)
- Landlord or property department
Settle dues with suppliers, banks, and employees.
Apply for VAT deregistration within 20 business days to avoid penalties (AED 10,000 fine for delay).

Step 5: Maintain Regulatory Compliance

During liquidation, you must comply with several UAE regulations:

Ultimate Beneficial Ownership (UBO) — Submit the Real Beneficiary Register (RBR) and Partner Register to HFZA within 30 days of liquidator appointment.
Economic Substance Regulations (ESR) — If your company performed any relevant activities, file ESR notification and report.
Maintain UBO & ESR records for 5 years after liquidation.

Step 6: Publish Liquidation Notice

HFZA requires a liquidation notice to be published in both English and Arabic newspapers.

The notice runs for 15 to 45 days, allowing creditors to raise claims.
If no objections are received, the liquidation can proceed to the final stage.

Step 7: Final Report Submission

Once all liabilities are cleared, the liquidator prepares a Final Liquidation Report, including:

Proof of debt settlement
Clearance certificates
Final audited financials (if required)

These documents are submitted to HFZA for review.

Step 8: Final Termination Letter

After verification, HFZA issues an Official Termination / Liquidation Certificate.
This legally dissolves the company and confirms its removal from the HFZA register.

Key Departments & Stakeholders Involved

Department	Role in Liquidation
Hamriyah Free Zone Authority (HFZA)	Main authority overseeing deregistration and approval
Federal Tax Authority (FTA)	VAT deregistration and tax clearance
Ministry of Human Resources & Emiratisation (MOHRE)	Employee visa and labor card cancellation
General Directorate of Residency & Foreigners Affairs (GDRFA – Sharjah)	Residence visa cancellation for investors and staff
Sharjah Electricity, Water and Gas Authority (SEWA)	Utility bill clearance
Customs Department	NOC for import/export companies
Telecommunication Providers (Etisalat / Du)	Closure of telecom accounts
Commercial Banks	Account closure and clearance letter
Sharjah Chamber of Commerce	Deregistration of trade membership (if applicable)

Board Resolution to liquidate the company
Liquidator’s appointment letter and acceptance
Trade license and incorporation documents (MOA, Certificate of Formation, etc.)
Shareholder passports and Emirates IDs
Clearance certificates (SEWA, Customs, Telecom, etc.)
Bank closure confirmation letter
Proof of newspaper publication
Final Liquidation Report

Common Challenges During HFZA Liquidation

Delays in obtaining clearances (especially from SEWA or Customs)
Pending VAT deregistration, causing administrative fines
Unsettled lease agreements delaying NOCs
Incorrect or incomplete documentation from the liquidator

Employee visa issues or labor disputes before closure

Is a Liquidator Required in HFZA?

Yes, the appointment of a licensed liquidator is mandatory for both Free Zone Establishments (FZE) and Free Zone Companies (FZC) undergoing liquidation in Hamriyah Free Zone.

The liquidator’s role includes:

Preparing and submitting the Liquidation Report to HFZA.
Settling all outstanding debts and liabilities.
Ensuring legal compliance with UAE Commercial Law and HFZA regulations.
Coordinating with external authorities (SEWA, FTA, Customs, etc.) to obtain clearances.

Only audit firms approved and licensed in the UAE are eligible to act as official liquidators in HFZA.

The liquidation process in the Hamriyah Free Zone typically takes 30 to 90 days, depending on:

Company type (FZE/FZC/Branch)
Number of employees and visas
Outstanding liabilities or leases

Estimated Cost:

AED 5,000 – 20,000+, depending on:

Liquidator’s professional fee
Visa cancellations
NOCs and government clearance fees
Newspaper advertisement and final authority charges

Note: Costs are approximate and may vary depending on company structure, activity, and pending dues.

The Capital Zone Liquidators

Why Choose Our Services?

At The Capital Zone, we simplify the entire company liquidation process in Hamriyah Free Zone (HFZA) from documentation to final deregistration. Our team works directly with HFZA and other UAE authorities to ensure a smooth, compliant, and time-efficient closure of your business.

Here’s how we assist you at every stage:

Free Initial Consultation: We evaluate your company structure and provide a clear liquidation roadmap.
Board Resolution & Liquidator Appointment: We prepare all required resolutions and handle your liquidator appointment through our licensed partners.
Document & Clearance Management: Our specialists obtain NOCs from utilities, landlords, customs, and other entities on your behalf.
Employee & Visa Settlements: We ensure all employee visas, work permits, and end-of-service benefits are properly cancelled.
Final Report & Deregistration: We prepare the liquidation report and liaise with HFZA until you receive your official company termination certificate.

With The Capital Zone’s expert guidance, you can close your business hassle-free, stay compliant with UAE laws, and avoid unnecessary delays or penalties.

Frequently
Asked Questions

How long does it take to liquidate a company in Hamriyah Free Zone?

Usually between 1 to 3 months, depending on the company structure and clearance speed.

Is a liquidator mandatory for HFZA companies?

Yes, a licensed liquidator must be appointed to prepare the liquidation report.

What happens if VAT deregistration is delayed?

The FTA imposes a fine of AED 10,000 for late VAT deregistration.

Can I re-register a new company in HFZA after liquidation?

Yes. Once the previous company is fully closed and cleared, you can apply for a new license anytime.

Do I need to publish a liquidation notice?

Yes, publication in both English and Arabic newspapers is mandatory for 15–45 days.

What is the cost of liquidation in HFZA?

On average AED 5,000 to 20,000, depending on visa cancellations and other clearances.

Can I handle liquidation myself without an agent?

Technically yes, but most businesses hire a professional consultant or liquidator to avoid delays and fines.