RAK ICC Declaration of Solvency: The Directors’ Statement for a Solvent Voluntary Liquidation

What is a RAK ICC declaration of solvency?

A RAK ICC declaration of solvency is a formal statement, signed by the director or directors of an International Business Company, declaring that after full enquiry into the company’s affairs the company is solvent — able to pay its debts and with assets that cover its liabilities. It is the gateway document for closing a solvent company cleanly, and it sits at the very start of a voluntary liquidation of a company formed through RAK ICC company incorporation.

The declaration makes two specific statements. First, that the company is and will continue to be able to discharge, pay or provide for its debts as they fall due. Second, that the value of the company’s assets equals or exceeds its liabilities. It is completed with the name and signature of the director or directors and the date, and it must be based on a genuine review — the phrase “full enquiry into the affairs of the company” is doing real work.

One point matters before anything else: this is not a document the registered agent signs on the company’s behalf, and it is not a formality to be waved through. It is a personal declaration by the people who run the company, and it carries legal weight. If you are planning an orderly closure — and want a proper liquidation audit report at the end of it — the declaration of solvency is where that process begins.

When do you need a declaration of solvency?

You need a declaration of solvency when you want to voluntarily wind up a solvent RAK ICC company through its members — a members’ voluntary liquidation — rather than simply letting it be struck off or having creditors wind it up. It is the route for a company that has value to distribute and wants to close in good order.

A RAK ICC company can leave the register by more than one path, and the declaration belongs to only one of them. The table below sets out the main routes and where the declaration fits.

The distinction is not just administrative. If the company genuinely cannot pay its debts, the directors cannot make the declaration, and the members’ voluntary route is closed to them — the company must be dealt with as an insolvent case that protects creditors. Choosing the right route honestly, up front, is the whole point of the exercise.

What do the two solvency statements actually mean?

Solvency has two limbs, and the declaration requires both: cash-flow solvency (the company can pay its debts as they fall due) and balance-sheet solvency (its assets equal or exceed its liabilities). A company can look healthy on one measure and fail the other, which is why both statements appear.

Cash-flow solvency is about timing. Can the company actually meet each obligation when it is due — suppliers, loans, tax — from the resources available to it? A company can hold valuable but illiquid assets and still fail this test if it cannot turn them into cash in time. Balance-sheet solvency is about totals. Taking all of the company’s assets at a fair value, do they cover all of its liabilities, including contingent and future liabilities that have not yet crystallised? Both must be satisfied for the declaration to be honest.

What does “full enquiry into the affairs” require?

“Full enquiry” means the directors must genuinely investigate the company’s finances before signing — reviewing the accounts, valuing the assets, listing every creditor and testing for hidden liabilities — rather than signing on impression. The declaration is only as sound as the enquiry behind it.

In practice, a proper enquiry looks at up-to-date management accounts, a realistic valuation of the company’s assets, a complete list of creditors and amounts owed, any contingent or disputed liabilities, outstanding obligations to the registered agent, and — importantly in 2026 — the company’s UAE Corporate Tax position. The checklist below captures what a director should have reviewed before declaring the company solvent.

Who signs the declaration — the sole director or all directors?

The declaration is signed by the sole director where the company has one, or by all of the directors where there are several — it is a personal statement by the people running the company. The wording is framed as “I/We the undersigned being the Director(s)” precisely because it flexes to the board.

Because each signing director is personally declaring the company solvent, each is personally responsible for the accuracy of that statement. That responsibility cannot be delegated to the registered agent or an adviser: they can help you gather and test the information, but the declaration itself is the directors’ own. This is exactly why the “full enquiry” standard exists — it is the directors’ protection as much as the creditors’.

How does the declaration fit into the RAK ICC voluntary liquidation process?

The declaration of solvency is step one of a members’ voluntary liquidation: it is signed first, and it is what allows the shareholders to resolve to wind the company up and appoint a liquidator. Everything that follows depends on it.

The sequence is straightforward once the declaration is in place, and a voluntary liquidator drives most of it.

1. Make full enquiry and sign the declaration of solvency. The directors review the accounts, assets and liabilities and, if satisfied, sign.
2. Pass the members’ resolution. The shareholders resolve to wind the company up voluntarily and to appoint a voluntary liquidator.
3. Appoint the voluntary liquidator. The appointment is notified to the Registrar, and the liquidator takes control of the winding-up.
4. Settle liabilities and distribute the surplus. The liquidator pays the company’s debts, including any Corporate Tax, and distributes any remaining surplus to the shareholders.
5. File the final account and dissolve. The liquidator finalises the accounts and the Registrar issues the Certificate of Dissolution.

A liquidation audit report is usually needed to close the file properly, which is why an approved liquidation audit report is part of most orderly RAK ICC closures.

What does a RAK ICC voluntary liquidation cost?

The RAK ICC government charges for a voluntary liquidation are AED 1,500 for the liquidation itself, AED 275 for the notice of appointment of the voluntary liquidator and AED 850 for the Certificate of Dissolution — before the liquidator’s and agent’s professional fees. A simpler voluntary strike-off is AED 1,500.

Put together, a full members’ voluntary liquidation with a liquidator carries roughly AED 2,625 in RAK ICC charges (AED 1,500 + AED 275 + AED 850), plus a liquidation audit report from AED 1,499 and the liquidator’s or registered agent’s professional fee. A clean, dormant company that qualifies for a straight voluntary strike-off can close for the AED 1,500 strike-off charge instead — which is why the route you choose has a real cost impact.

Voluntary liquidation or voluntary strike-off — which route?

A voluntary liquidation is the formal route for a company with assets, creditors or a distribution to make; a voluntary strike-off is the lighter route for a dormant company that is already clean. Both need the company to be solvent, but they suit different situations.

A members’ voluntary liquidation appoints a liquidator to settle liabilities, distribute any surplus and produce a proper closing position — the right choice where there is genuine winding-up work to do. A voluntary strike-off simply removes a company that has no assets and no liabilities left to deal with, which is cheaper and quicker but only appropriate when there is truly nothing to unwind. Using a strike-off to sidestep creditors is not a legitimate shortcut.

What happens to Corporate Tax and final obligations on closure?

A RAK ICC company is a UAE juridical person within the scope of UAE Corporate Tax, so before it is dissolved it must file any outstanding returns, settle any tax due and deregister with the Federal Tax Authority where required. Closing the company does not close its tax file automatically.

This is where many offshore closures go wrong. The old assumption that an offshore company has nothing to do with UAE tax no longer holds: RAK ICC companies fall within Corporate Tax, and unfiled returns or unpaid Corporate Tax are liabilities that belong on the solvency assessment and must be cleared before dissolution. If the company was also registered for VAT, it should be deregistered; bank accounts should be closed; and any employee, supplier or intercompany balances should be settled. For the wider picture, our UAE Corporate Tax guide sets out what is in scope.

What are the risks of a false or careless declaration of solvency?

Signing a declaration of solvency without reasonable grounds is a serious matter: it can expose the directors to personal liability, cause the liquidation to convert into an insolvent process, and attract penalties. The declaration is protective when it is honest and dangerous when it is not.

If a company declared solvent turns out to be unable to pay its debts, the directors who signed can be held personally responsible, the members’ voluntary liquidation can be converted into a creditors’ winding-up, and distributions made to shareholders may have to be unwound. The safeguard is simple and entirely within the directors’ control: make a genuine, documented enquiry into the company’s finances — including its Corporate Tax position — and only declare solvency if both limbs are truly satisfied.

How does Fastlane help with RAK ICC liquidation and the declaration of solvency?

Fastlane manages the whole orderly closure of a RAK ICC company — testing solvency, helping the directors prepare the declaration, working with the voluntary liquidator, producing the liquidation audit report and clearing Corporate Tax — so the company is dissolved cleanly and the directors are protected. As an FTA-registered tax agent and MoE-approved auditor, we handle both the tax and the audit sides in one place.

We start by testing whether the company is genuinely solvent and which route fits — a full liquidation audit report or a simpler strike-off. We help the directors carry out the enquiry that stands behind the declaration, coordinate the members’ resolution and the liquidator’s appointment, settle and deregister the company’s Corporate Tax, and see the file through to the Certificate of Dissolution. If you are also weighing a fresh onshore structure after closing, we can advise on a Dubai company setup in the same conversation.