How to Liquidate an Offshore Company?
Step-by-Step Guide to Liquidating an Offshore Company
Offshore companies in the UAE, such as those registered under RAK International Corporate Centre (RAK ICC), JAFZA Offshore, or Ajman Offshore, follow a slightly different liquidation process than mainland or free zone companies. Since these entities are not allowed to operate inside the UAE or issue visas, the process tends to be more document-driven and less time-consuming.
Step 1: Board Resolution to Liquidate
The first step is a board resolution signed by the directors or shareholders of the company. This resolution should confirm:
- The decision to liquidate the company
- The appointment of a licensed liquidator
- Agreement to settle all outstanding dues
In most offshore jurisdictions, this resolution must be notarised and sometimes attested, depending on the offshore registrar’s rules.
Step 2: Appoint a Licensed Liquidator
Offshore authorities require a licensed liquidator to oversee the process. The liquidator prepares all closing documents, manages creditor communications (if any), and issues a final liquidation report to the registrar.
Some offshore jurisdictions allow the liquidation to be handled by the registered agent who set up the company, while others require an independent audit firm.
Step 3: Submit Closure Application to Offshore Registrar
Once the resolution and liquidator appointment are complete, you must submit an official application to strike off the company to the offshore authority (e.g., RAK ICC or JAFZA Offshore).
This typically includes:
- Company documents (MOA, license, registration certificate)
- Board resolution and liquidator letter
- Proof that the company has no pending liabilities
- Clearance from the registered agent (if applicable)
Step 4: Clearance of Bank Accounts and Assets
- Close any offshore or international bank accounts
- Dispose of any assets held in the company’s name
- Confirm that the company has no active business or legal disputes
Some offshore registrars require a declaration of no assets or liabilities, signed by the directors.
Step 5: Submit Final Liquidation Report
The liquidator prepares a final report stating that all obligations have been fulfilled and no liabilities remain. This document is critical to completing the strike-off process.
If the company was previously engaged in any offshore structuring (such as holding shares in another company), supporting documents may also be required.
Step 6: Receive Strike-off Confirmation
Once the registrar has reviewed all documents, they will issue a Certificate of Dissolution or a Strike-off Confirmation Letter. This is the official proof that the company has been legally closed.
You should keep this certificate for your records, as banks and other institutions may ask for it in the future.
Timeframe and Cost for an Offshore Company Liquidation
- Timeline: Offshore liquidation typically takes 2 to 6 weeks, depending on how quickly documents are submitted and reviewed.
- Cost: Expect total expenses to range from AED 3,000 to AED 7,000, depending on the offshore authority and the liquidator’s fees.
