Short answer: Yes — it's standard and correct for an IFZA liquidation report to state that the company is "under liquidation". The report is prepared during the winding-up, so at that moment the company genuinely is under liquidation. The report supports the cancellation; your company is formally closed only when IFZA issues the licence cancellation letter. So "under liquidation" on the report is a sign it was done right — not that anything is wrong or unfinished.
It's a natural thing to double-check. You've paid for a liquidation report to close your company, you open it, and instead of confirming the company is closed, it describes it as under liquidation. Understandably, people ask: is this the right document? Did something not complete? The answer is reassuring — that wording is exactly what should be there, and it points to a specific, important distinction about when a company is actually finished.
The wordingWhy the report says "under liquidation"
Because that's the company's real status at the moment the report is written. A liquidation report is, by its nature, a report on a company that is in the process of being wound up — not one that has already ceased to exist. It sets out the company's final position and confirms it's fit to be cancelled, and it describes the company as under liquidation because, legally, that's what it is until the free zone formally cancels it.
Put the other way round: a report that called the company "dissolved" or "closed" before IFZA had actually cancelled the licence would be inaccurate. So the "under liquidation" status isn't a limitation of the report — it's the report being precise. It's the normal, expected wording that approved auditors use.
Having the report is not the same as being closed
This is the point that matters most, and it's where the "under liquidation" wording is quietly telling you something true. Holding the liquidation report means the winding-up work is done and documented — but it does not mean your company has been closed. Those are two different milestones:
| Milestone | What it means |
|---|---|
| Liquidation report issued | The winding-up is complete and documented; company shown as under liquidation |
| IFZA licence cancellation letter issued | The company is formally closed and ceases to exist |
The report is what enables the final step; the cancellation letter is the final step. Until IFZA issues that letter, your company legally still exists — in exactly the "under liquidation" state the report describes.
The finish lineWhen is your IFZA company actually closed?
When IFZA issues the licence cancellation letter. That is the moment the liquidation is complete and the company ceases to exist — not the date printed on the liquidation report, and not the day you submitted your cancellation. The full sequence looks like this:
- The liquidation report is prepared — company shown as under liquidation.
- The report is submitted to IFZA as part of the cancellation.
- IFZA processes the cancellation.
- IFZA issues the licence cancellation letter — the company is now closed.
- The tax side follows: final return and Corporate Tax deregistration.
So if your report says "under liquidation", you're at step 1 or 2 — correctly. The job now is simply to get through to that cancellation letter.
What the report contains, and who prepares it
The IFZA liquidation report is a liquidator's report prepared by an approved auditor, covering the company's final position as it's wound up — confirming its affairs are settled and it's fit to be cancelled, with the company shown as under liquidation. For a low-activity or near-dormant company it's short; for one with more history it's fuller. The company appoints the liquidator (usually in the cancellation resolution), and that auditor issues the report — it has to come from a qualified firm for IFZA to accept it.
From "under liquidation" to closed — handled
Fastlane prepares IFZA liquidation reports and, because the report is only one step, manages the rest of the closure through to the IFZA cancellation letter — then the final return and Corporate Tax deregistration. So the company doesn't sit in "under liquidation" longer than it needs to. Send us your IFZA trade licence to begin.
+971 55 127 3479 · info@fastlanecareer.com
Related guides and services
- IFZA liquidation & audit report — the report that supports the cancellation.
- IFZA liquidation, fully managed — the whole closure through to the cancellation letter.
- IFZA company liquidation process — the full step-by-step.
IFZA Liquidation
The liquidation report and closure.
Fully Managed
Closure through to the cancellation letter.
CT Deregistration
After the cancellation letter.
Frequently asked questions
Because at the point the report is prepared, that is exactly the company’s status — it is under liquidation. The liquidation report is produced during the winding-up process, to support the cancellation, not after the company has already closed. So “under liquidation” is the correct, standard wording; it is not an error and it doesn’t mean anything has gone wrong. A report that described the company as already dissolved before IFZA had cancelled it would, in fact, be wrong.
Yes. It is the normal wording. A liquidation report is, by definition, a report on a company that is in the process of being wound up — so it states that the company is under liquidation and sets out its position as at that point. Auditors preparing these reports use that status deliberately, because the company’s legal existence only ends when the free zone formally cancels it. Seeing “under liquidation” on your report is a sign it has been prepared correctly.
Not quite — and this is the key point. Having the liquidation report means the winding-up work is done and documented, but your company is formally closed only when IFZA issues the licence cancellation letter. The report is the document that lets IFZA get to that step; the cancellation letter is the step itself. Until that letter is issued, the company legally still exists, in the “under liquidation” state the report describes.
When IFZA issues the licence cancellation letter. That letter is the point at which the liquidation is complete and the company ceases to exist — not the date on the liquidation report, and not the date you submitted your cancellation application. The sequence is: the report is prepared (company under liquidation) → it is submitted to IFZA → IFZA processes the cancellation → IFZA issues the cancellation letter → the company is closed.
It is a liquidator’s report prepared by an approved auditor, covering the company’s final position as it is wound up — confirming that its affairs have been settled and that it is fit to be cancelled, with the company shown as under liquidation. For a low-activity or near-dormant company it is short; for a company with more history it is fuller. Either way it is the closing document IFZA relies on, distinct from ordinary annual accounts.
An approved auditor acting as liquidator. The company appoints the liquidator (usually in the cancellation resolution), and that auditor prepares the report. It has to come from a qualified firm for IFZA to accept it. Fastlane prepares IFZA liquidation reports as part of handling the closure, so the same team that produces the report also carries the file through to the cancellation letter.
Yes. We prepare the IFZA liquidation report, and — because the report is only one step — we manage the rest of the closure through to the IFZA cancellation letter, and then the tax side: the final return and Corporate Tax deregistration. That way “under liquidation” becomes “closed” without the file stalling between steps. Send us your IFZA trade licence to begin.
Fastlane Tax Team
FTA-Registered Tax Agent · MoE-Approved Auditor · Dubai
This article was prepared by the team at Fastlane Management Consultancy, a Dubai-based FTA-Registered Tax Agent and MoE-Approved auditor. We prepare IFZA liquidation reports and manage company closures through to the IFZA licence cancellation letter, alongside Corporate Tax and VAT deregistration.