Company Liquidation in JAFZA Free Zone

Company liquidation in JAFZA is the formal procedure of dissolving a registered entity, selling off its assets, settling outstanding debts, compensating employees, and distributing remaining funds among shareholders. Once approved by the Jebel Ali Free Zone Authority (JAFZA), the company’s license is cancelled, and it is legally removed from the registry.

This process is mandatory for companies that wish to close operations legally; simply allowing a trade license to expire is not considered a valid closure and may lead to fines, penalties, and future business restrictions.

Voluntary Liquidation

Initiated by shareholders or directors when they choose to close the business, often for strategic or financial reasons.

Compulsory Liquidation

Enforced by a court order due to insolvency, non-compliance, or outstanding debts.

Partial Liquidation

Only certain assets are sold while parts of the business remain active.

Complete Liquidation

The company ceases all operations, sells off all assets, and fully dissolves its presence in JAFZA.

Step-by-Step Process of Company Liquidation in JAFZA

Step 1: Board Resolution for Liquidation

The process begins with a Board or Shareholder Resolution formally approving the company’s liquidation.

Must be signed by all shareholders and, if applicable, notarized.
States the intent to dissolve and appoints an authorized liquidator.

Step 2: Appointment of a Licensed Liquidator

JAFZA requires companies to appoint a licensed liquidator or auditing firm to manage the process.
The liquidator will assess the company’s assets, liabilities, and prepare the final liquidation report.
A copy of the liquidator’s trade license and a letter of acceptance must be submitted to JAFZA.

Step 3: Apply for Liquidation Through the JAFZA Portal

Log in to the Dubai Trade Portal → Registration → Company Termination.
Create a new request and upload required documents.
Pay the applicable liquidation and advertisement fees.

Step 4: Notify Stakeholders and Publish a Liquidation Notice

A notice of liquidation must be published in two local newspapers (Arabic & English).
Creditors are given 14–15 days to raise any objections.

Step 5: Settle Liabilities and Employee Dues

Pay all outstanding supplier invoices, loans, and utility bills.
Settle employee end-of-service benefits and cancel their visas.
Obtain clearance from the Ministry of Human Resources & Emiratisation (MOHRE) and GDRFA.

Step 6: Obtain Clearances from Relevant Departments

JAFZA requires companies to obtain multiple clearances before final approval:

JAFZA Finance Department – Confirmation that all dues are cleared.
Dubai Customs – Clearance that no import/export dues are pending.
Dubai Electricity and Water Authority (DEWA) – Final bill and clearance for utilities.
Etisalat / Du – Clearance for telecom accounts.
Roads and Transport Authority (RTA) – Clearance for registered vehicles.
JAFZA Leasing Department – Submit lease termination form and return office/warehouse keys.

Step 7: Close Bank Accounts and Submit Proof

All corporate bank accounts must be closed.
Submit the bank closure letter to JAFZA.

Step 8: Liquidator’s Final Report Submission

The liquidator will submit the final liquidation report, confirming all assets have been disposed of and debts settled.
The Registrar reviews and approves the report.

Step 9: License Cancellation & Deregistration

Once verified, JAFZA will cancel the trade license and issue the official deregistration certificate.
This marks the legal end of the company’s existence.

Key Departments & Stakeholders Involved

Department	Role in Liquidation
JAFZA Authority	Main regulatory body overseeing company deregistration
Dubai Customs	Provides clearance confirming no import/export dues
JAFZA Finance Department	Approves final settlement of JAFZA-related dues
DEWA (Dubai Electricity & Water Authority)	Issues utility clearance
Etisalat / Du	Telecom clearance confirmation
RTA (Roads and Transport Authority)	Clearance for registered vehicles
MOHRE / GDRFA	Handles visa cancellations and labor clearances
Federal Tax Authority (FTA)	VAT deregistration (if applicable)
Commercial Banks	Confirm closure of corporate accounts

For FZE / FZCO Entities:
- Original Certificate of Formation and Trade License
- Original Share Certificates (if applicable)
- Board Resolution approving liquidation
- Appointment and Consent Letter of the Liquidator
- Liquidator’s Trade License copy
- Liquidation Report / Final Audit Report
- Lease Termination Form and proof of key handover
- Finance Department Clearance Letter
- Customs, DEWA, Etisalat, RTA, and Bank Clearance Letters
For Branches:
- Notarized and Attested Resolution from the parent company abroad
- Customs and DEWA Clearance Letters

Common Challenges During JAFZA Liquidation

- Delays in visa or customs clearance.
- Outstanding utility or lease payments.
- Missing original incorporation documents.
- Liquidator’s report discrepancies.
- Fines for expired licenses or late VAT deregistration.
Hiring an experienced consultant such as The Capital Zone ensures these challenges are managed efficiently and compliance is maintained throughout.

Overview of JAFZA and Its Business Environment

The Jebel Ali Free Zone (JAFZA), established in 1985 and managed by DP World, is one of the UAE’s largest and most successful free zones. Located next to the Jebel Ali Port, it serves as a major global hub for trade, logistics, manufacturing, and industrial operations, housing over 10,000 companies from more than 100 countries. JAFZA’s strategic connectivity with Dubai Port and Al Maktoum International Airport has made it the backbone of regional and international commerce.

However, when a business in JAFZA reaches the end of its operational cycle whether due to restructuring, relocation, or financial challenges, it must undergo formal company liquidation to close legally and avoid penalties. The process ensures all financial and legal obligations are cleared before the business is removed from JAFZA’s commercial registry.

The Capital Zone specializes in assisting businesses through this process, providing full support in documentation, liquidation reporting, clearances, and license cancellation, ensuring a smooth and compliant company closure.

Processing Time: ~21–45 working days (depending on company type and clearance delays)
JAFZA Fees:
- AED 5,000 – Deregistration for FZE / FZCO
- AED 1,500 – Advertisement fee (+5% VAT)
- AED 10–20 – Courier charges
Liquidator & Audit Costs: Depend on the firm and business complexity (typically AED 5,000–10,000)

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, our expert team manages the entire JAFZA company liquidation process from document preparation and liaising with authorities to obtaining all final clearances and license cancellation.

We ensure your business exit is compliant, cost-efficient, and hassle-free, allowing you to focus on your next venture with peace of mind.

Frequently
Asked Questions

Is it mandatory to appoint a liquidator for JAFZA company closure?

Yes. JAFZA requires the appointment of a licensed liquidator registered in the UAE. The liquidator prepares the final liquidation report confirming that all liabilities have been settled before deregistration.

What happens if I don’t officially liquidate my JAFZA company?

Failure to complete the official liquidation process can result in fines, penalties, and blacklisting, preventing company owners or shareholders from starting new businesses or renewing visas in the UAE.

Do I need to publish a liquidation notice in newspapers?

Yes. Companies in JAFZA must publish a notice of liquidation in two local newspapers (one in English and one in Arabic) to allow creditors to raise claims within a 14–15 day period.

Are there any tax-related steps during JAFZA liquidation?

If your company is VAT-registered, you must apply for VAT deregistration with the Federal Tax Authority (FTA) and submit the clearance certificate to JAFZA before final approval.

Can I liquidate my JAFZA company if it has outstanding debts?

All debts must be settled before liquidation is approved. If the company cannot pay its liabilities, a court-supervised or compulsory liquidation may be initiated to resolve outstanding obligations.

What clearances are required before company closure in JAFZA?

You need clearance from:

JAFZA Finance Department
Dubai Customs
DEWA (Utilities)
Etisalat or Du (Telecom)
RTA (if company vehicles registered)
MOHRE and GDRFA (for visas and employees)
Commercial Banks (for account closure)

How much does it cost to liquidate a company in JAFZA?

The average cost ranges from AED 6,000 to AED 15,000, depending on company type, number of clearances, and liquidator fees.

How can The Capital Zone assist with JAFZA liquidation?

The Capital Zone manages end-to-end liquidation services, including document preparation, coordination with all departments, visa and customs clearances, liquidation reports, and trade license cancellation ensuring a compliant and hassle-free closure.

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Types of Liquidation in JAFZA Free Zone