Liquidation of foreign companies

If a foreign company is no longer needed for running a business, keeping it in place can create unnecessary costs and administrative burdens. In that situation, it is worth considering liquidation or another dissolution method provided for by law.

The procedure for closing a foreign company depends on the country of registration, the legal form, the company's financial standing, and the presence of assets, bank accounts, debts, and other circumstances.

Maira Consult helps organize the liquidation of foreign and offshore companies, coordinating document preparation and interaction with local registrars, accountants, auditors, and other professionals.

When should a foreign company be liquidated?

Liquidating or dissolving a company can make sense if:

• the company is no longer used in the business;

• operations have been discontinued;

• the owner has changed the structure of the international business;

• the company is no longer needed for working with foreign partners;

• annual maintenance of the company has become economically unjustified;

• tax or regulatory conditions have changed;

• the owner plans to move to a different jurisdiction;

• the international corporate structure needs to be streamlined.

Before starting the procedure, it is important to check whether the company has outstanding obligations, assets, bank accounts, accounts payable, or other circumstances that could affect the order of its closure.

How can a foreign company's activity be terminated?

The laws of different countries provide for different ways of dissolving a company.

Depending on the jurisdiction, this may be:

• voluntary liquidation;

• strike off / dissolution from the register;

• liquidation due to insolvency;

• other dissolution procedures provided for by the laws of a particular country.

Not every method suits every company. For example, voluntary strike off from the register may only be available if certain types of activity, debts, or other circumstances are absent.

That is why, before starting the procedure, it is necessary to determine which method of closing a foreign company is available and appropriate in a specific jurisdiction.

Liquidation vs. strike off: what is the difference?

Voluntary liquidation involves going through a legally established procedure for dissolving a company. In some jurisdictions it may include appointing a liquidator, settling obligations, distributing assets, and filing documents with the state registrar.

Strike off, or removal from the register, is a separate method of dissolving a company that is available in certain countries for companies meeting the established conditions.

For example, in the United Kingdom a company can apply for voluntary strike off from Companies House if it meets the specified requirements. If a company does not meet those conditions, a different procedure may be required, including formal liquidation.

Therefore, strike off should not be viewed as a universal alternative to liquidation. The procedure and legal consequences need to be checked against the laws of the specific country.

How does the liquidation of a foreign company proceed?

The process depends on the jurisdiction, but in general the procedure may include:

1. Analyzing the company's status. We check the registration data, status, corporate structure, and any outstanding obligations.

2. Reviewing the financial position. We determine whether the company has assets, debts, bank accounts, and other financial obligations.

3. Choosing the dissolution procedure. We determine whether voluntary liquidation, strike off, or another method is possible.

4. Preparing documents. We draft applications, shareholder resolutions, and other documents required for the specific procedure.

5. Filing documents. We arrange for documents to be filed with the relevant registrar or other government authority.

6. Fulfilling additional requirements. If needed, we coordinate accounting, tax, audit, and other procedures.

7. Completing the procedure. We obtain a document or confirmation certifying the company's dissolution in accordance with the rules of the specific jurisdiction.

The number of stages and their sequence may vary depending on the country.

What documents are needed to liquidate a foreign company?

The list of documents depends on the jurisdiction and the method of dissolving the company.

Typically the following may be needed:

• the company's corporate documents;

• resolutions of the members or shareholders;

• the director's documents;

• up-to-date registration data;

• financial and accounting information;

• information about bank accounts;

• documents regarding assets and liabilities;

• tax documents;

• the liquidator's documents, if their appointment is provided for by the procedure;

• other documents required under local law.

Before starting work, we determine the exact list of documents required for a specific company.

Can a company with a bank account or assets be liquidated?

Having a bank account, assets, or other property rights does not automatically mean that a company cannot be liquidated.

However, such circumstances can affect the procedure and its duration. Before dissolving a company, it is necessary to determine how its assets, funds in accounts, and accounts receivable and payable will be settled.

Special attention should be paid to bank accounts. In some jurisdictions, access to the corporate account is cut off once the company is dissolved, so the question of funds in the account must be resolved before the procedure is completed.

Can a foreign company be liquidated if it has debts?

This depends on the nature and size of the obligations and the laws of the specific jurisdiction.

If a company has outstanding debts or cannot meet its obligations, the standard voluntary liquidation procedure may be unavailable or inadvisable. In such cases, procedures related to insolvency may apply instead.

That is why, before filing documents for liquidation, it is necessary to check the company's financial position and its obligations to creditors.

Liquidation of an offshore company

Various dissolution procedures may also apply to offshore companies, depending on the laws of the country of registration.

In some jurisdictions, removal of the company from the register may be available; in others, full voluntary liquidation is required, including additional corporate and financial formalities.

That is why, even for a company with no actual activity, it is important to check its current status, outstanding obligations, and the registrar's requirements before starting the procedure.

Liquidation of a foreign company and CFC rules

If the owner of a foreign company is a tax resident of Ukraine and has controlling-person obligations regarding a CFC (controlled foreign company), liquidating the company may require a separate analysis of its tax consequences.

The following must be taken into account:

• the date the company was actually dissolved;

• the company's status at the time of dissolution;

• obligations regarding filing a CFC notification;

• the need for filing or amending CFC reporting;

• the financial statements of the liquidated company;

• possible tax consequences of receiving assets or funds as a result of the liquidation.

That is why closing a foreign company and fulfilling CFC obligations should be considered together, especially if the company belongs to an individual who is a tax resident of Ukraine.

Is reporting required before liquidation?

In many jurisdictions, dissolving a company does not automatically release it from outstanding accounting, corporate, or tax obligations.

Depending on the country, the following may be required:

• preparing financial statements;

• filing a tax return;

• settling tax liabilities;

• preparing final reporting;

• undergoing an audit, if it is mandatory;

• filing corporate documents;

• fulfilling other requirements of local law.

Maira Consult can help organize the preparation of the necessary reporting and interaction with local accountants or auditors.

How much does it cost to liquidate a foreign company?

The cost of liquidation depends on:

• the jurisdiction;

• the type of company;

• the method of dissolution;

• whether there are assets and bank accounts;

• whether there are debts;

• the need to prepare financial or tax reporting;

• the need to appoint a local liquidator;

• government fees and other costs.

Therefore, the exact cost can only be determined after reviewing the data for a specific company and the requirements of the relevant jurisdiction.

How long does it take to liquidate a foreign company?

The timeframe depends on the country of registration and the procedure chosen.

In some cases, a company can be dissolved relatively quickly through removal from the register as provided for by law. Voluntary liquidation may take longer due to the need to complete financial, tax, and corporate procedures.

For example, the strike off procedure in the United Kingdom involves a set period after the notice is published before the company is finally removed from the register.

The exact liquidation timeframe is determined after analyzing the specific company.

In which jurisdictions do we help?

Maira Consult organizes the liquidation of foreign companies in the jurisdictions our team and partners work with.

Before starting the procedure, we check whether liquidation of the specific company is possible and determine the optimal way to dissolve it.

If the company was not registered through Maira Consult, this is not an obstacle to contacting us. We can analyze its current status and determine the next steps.

Why choose Maira Consult?

• International experience. We work with foreign companies and international corporate structures.

• Analysis of the specific jurisdiction. We do not use a single algorithm for all countries, since the liquidation procedure depends on local law.

• Comprehensive support. If needed, we coordinate legal, accounting, tax, and audit matters.

• Work with local partners. We bring in specialists in the relevant jurisdiction if the procedure requires their involvement.

• Support from start to finish. We help organize the process from analyzing the company's status to obtaining confirmation of its dissolution.

• CFC and international structuring. If needed, we separately analyze the consequences of liquidating a foreign company for the Ukrainian owner.