Timelines: Planning Your Company Formation in the UAE
Timelines: Planning Your Company Formation in the UAE
Introduction
Establishing a business in the United Arab Emirates (UAE) can be complex and time-consuming. However, it can become a smooth, streamlined experience with the correct planning. This blog provides a comprehensive timeline and practical tips for entrepreneurs eager to create a solid foundation for their venture in the UAE.
Stages of Formation
Initial Preparation
The first stage involves a lot of research and decision-making. You must choose the type of business activity, the legal structure of your company, and its location – mainland, free zone, or offshore. This stage also requires choosing a trade name and identifying potential local sponsors. A business set-up consultant can help you a lot at this stage.
Documentation
Once you’ve outlined your business plan, the next step is preparing the necessary documentation. This may include preparing new documents such as passing board resolutions for corporate shareholders, gathering identity and address proofs of individual shareholders and managers, and compiling the information needed for the formation. Ensuring all documents are correctly filed is crucial to avoid delays.
Part of the documentation shall also include getting the documents attested wherever necessary. The time required for the UAE embassy to attest corporate documents may vary from country to country, so one must be aware of the required timelines ahead of formation.
Initial Approvals
After preparing all required documents, it must be submitted to the licensor with an initial approval application. This stage also includes obtaining your trade name reservation and initial approval certificate. Practically this stage will get thorough in a week if documents are clear and there is no requirement for approvals from other regulatory authorities.
Approvals from Other Regulatory Authorities
If your business is in a specific sector like healthcare, education, or finance, you may need approvals from additional regulatory authorities. This process varies widely depending on the industry, so it’s crucial to research the requirements specific to your sector. This is important because approvals for certain activities, such as trading precious metals, can take months together.
Initial approvals can be lengthy due to intense compliance checks and security approvals.
Final Approvals and Subsequent Registrations Post Formation
After getting all necessary approvals, you can draft the final licensing documents (or even adopt the standard formats of the licensor) and pay the license fees. Once paid, the licensing authority will issue the business license in 3-4 days.
Post-formation, you must register with the UAE Ministry of Labour and the Immigration Department to hire staff.
How to Speed Up the Formation
To expedite the process, consider hiring a business set-up consultant to guide you with the specific case. They can guide you through the process, ensure you meet all requirements, and help you avoid common mistakes.
Planning Visits of Entrepreneurs Travel if They are Located Outside the UAE
If you’re located outside the UAE, you must plan visits for company formation tasks. Many licensing authorities do not require your physical presence during formation and do the verification online through video conferencing. However, the shareholder or the manager must be present in the UAE and have a valid UAE residency visa while opening bank accounts. It’s also advisable to plan extra time for unexpected issues.
Summary
Starting a business in the UAE is an exciting journey. While it requires careful planning and patience, the process can be greatly simplified with a clear understanding of the stages involved and by staying prepared. Engaging local experts can be an asset in ensuring a smooth formation process. With the right approach, you’ll be well on your way to launching a successful venture in the UAE’s dynamic business landscape.