General FAQs

Where do I start if I want to set up a business in the UAE?

We recommend that you create a business plan to understand your company requirements and you will need to answer key questions that will guide you on the ideal location for the business (e.g. Freezone or Mainland, Abu Dhabi or Dubai) and the type of business structure best suited for your business. Key questions include: Will your company be trading / selling goods or providing services? Is your activity or product regulated by a government authority? Who is your target market and where are your clients based? Where will you likely be located? Do you wish to deal with government or semi government organisations? How many staff will you require? What is your timeline? All these questions are essential to understanding how to help you.

What type of company entity would be suited to my business?

Depending on your business activity, one of the following licences from the 3 main categories would be required: Professional, Commercial or Industrial licences. Dependant on the type of licence required, the type of entity can be determined, these include; Limited Liability Company (LLC), Foreign/Local Branch, Sole Establishment or Civil Partnership.

Which emirate of the UAE should I set my company up in?

There a 7 Emirates making up the UAE; Abu Dhabi, Dubai, Sharjah, Ras Al Khamiah, Fujairah, Ajman & Umm Al Quwain. To determine which emirate is best to set up in, you should consider the following:

- Where are your clients based?
- Are you dealing with private or government entities?
- Where do you want to live?
- What are the rental costs?

Depending on your business activities and prospective clients will go a long way to decide which DED licence is required. Deciphering what your business activities &/or prospective clients will be is extremely important to decide which emirate to set up in, for example, to obtain an ADNOC/SPC approval, an Abu Dhabi Mainland trade licence is mandatory.

What is the difference between a Free Zone and Mainland Company in the UAE?

Mainland Company:

A mainland establishment is an onshore setup, licensed by the Department of Economic Development (DED). An onshore establishment is permitted to conduct business in the local market as well as outside the UAE, without any restrictions.

Free Zone Company:

A Free Zone business is incorporated within a designated jurisdiction of a certain emirate where the company is only allowed to conduct business inside the same Free Zone or outside of the UAE. For commercial trade licences and trading of physical goods, the Free Zone company cannot conduct local mainland UAE business directly. For Freezone companies to trade with the UAE mainland they must do so through a mainland distributor or agent and by must pay 5% import duty on local invoices. A Free Zone business cannot work legally outside of its designated jurisdiction.

Can a foreigner own 100% of a company in the UAE?

There are multiple ways that a foreign party can own 100% of a business. The numerous Free Zones throughout the Emirates allow for 100% ownership of businesses of varying sizes and across multiple industry sectors. However, it is important to note that there are restrictions in terms of who you may contract with when operating from a Free Zone entity. Throughout Mainland UAE it is possible for Foreign Nationals or Companies to wholly own businesses which provide professional and consultancy services – this can be done as an individual through a 100% owned Establishment, or as a Company as a 100% owned Foreign Branch. It is not permitted to trade goods within UAE mainland, using a 100% Foreign-owned company.

How do I obtain a CICPA Pass for Vehicles?

If the work that you are undertaking in a CICPA zone requires vehicles for transport or work (e.g. excavation diggers, cranes, trucks, buses – including boats and marine vehicles) then you must obtain a CICPA pass for those vehicles.

The CICPA pass is obtained for a vehicle in the same way that a CICPA pass is obtained for an individual person, the following basic steps:

You must obtain a Letter of Authorisation (LOA) from ADNOC
Within this LOA it must be stated what vehicle types are needed to carry out the work in the CICPA area, how many vehicles and for what duration
Once the LOA has been granted it will stipulate how many staff and what vehicles you may apply for to obtain CICPA passes
To obtain a CICPA pass for a vehicle, the vehicle must be owned by the company with the LOA
If the company with the LOA leases their vehicles from a 3rd party, then this 3rd party must apply for an LOA themselves for CICPA passes for their vehicles
In order for a company to obtain CICPA passes, they must be an Abu Dhabi based company with SPC (Supreme Petroleum Council) approval
Once the 3rd party has obtained a LOA for their vehicles, then the vehicles may apply for CICPA passes to enter with the CICPA zones with the first company
Sovereign PPG can assist you with the registration of vehicles and obtaining CICPA passes for individuals and equipment

How do I register as a vendor for ADNOC?

Firstly you must check that you can meet the correct criteria for ADNOC Registration

You will require the below:

A Mainland Abu Dhabi DED Licence. This may be in the form of an LLC or Foreign Branch.
Supreme Petroleum Council (SPC) Approval.
Relevant activities to the Work/Product list provided by ADNOC (they must match with your Licence activities.)

The next step is to consider the stages for registration and necessary documents required to submit to ADNOC for their review.

Stages for ADNOC Vendor Registration:

Register and activate SAP Ariba Account number to provide access to ADNOC Commercial Directory.
ADNOC Registration accessed via Ariba account number (all company documents and information details are required at this stage and to be submitted).
1 week for submission to be reviewed by ADNOC. If successful, ADNOC will then call to proceed to the Pre-Qualification Stage.
Pre-Qualification – You will need to provide examples of projects, products, services and other threshold requirements. if accepted you will then successfully to be visible on ADNOCS Supplier list and registered as an ADNOC Vendor.

If you need assistance and advice on ADNOC Vendor Registration SPV and for further information on any other related company set up, local partner or PRO service matter in the UAE and wider Gulf do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What is the difference between a Branch office and a Rep office in UAE?

A Representative office is a branch established by the parent company which is useful in promoting a foreign company and introducing their products to UAE companies. A Representative Office cannot export, import or sell in the UAE. A Representative Office may practice only promotional business for the products and services provided by the parent company. A Branch office on the other hand can conduct business in the UAE other than for just promotional purposes.

Activities – A representative office does not engage in sales, services or any type of commercial activity but only promotes/markets the activities of its parent company, gathering information and soliciting orders and projects to be performed by the head office of the parent company. A Branch office , however can engage in commercial activities.
Sponsor/National Service Agent – Similar to a Branch, each Representative office requires a local sponsor or National Service Agent (NSA). The NSA has no equity participation or liability to the business.
Bank Guarantee – Also similar to a Branch, a Representative Office will require a refundable deposit bank guarantee of AED50,000 for the duration of your licence and this cannot be withdrawn or used as working capital.

Is the general manager unlimited liable for the activities of a company in the UAE?

Entities incorporated in the UAE, whether onshore or in a free zone, are required to appoint a general manger who has sole responsibility for the management and operation of the entity. In the UAE, the powers and authority of the general manager are extensive and are generally contained in the constitutional documents of the entity (for example the memorandum of association) or a power of attorney from the shareholders. UAE law imposes both civil and criminal liability on the general manger in relation to the business of the entity including for matters beyond the control of the general manager. For example, a general manager may be personally liable for a bounced cheque issued by the entity and signed by the general manager and in the event of liquidation, the management of the company will be scrutinised and if found lacking, will expose the general manager to potential personal liability for the debts of as well as potential criminal proceedings. The UAE Commercial Companies Law No. 2 of 2015 provides that a general manger will be liable towards the company, the shareholders and third parties for all acts of fraud, misuse of power, and violations of the provisions of the Commercial Companies Law or the memorandum of association of the company or for errors in management. General managers are advised to take the following steps to mitigate their potential exposure and to provide a defensive against a claim for liability: a) Ensure that they act within the scope of powers and authority contained in the memorandum of association or power of attorney. b) Ensure that there are sufficient funds in the bank account of the entity before signing cheques. c) Consider director’s liability insurance or request indemnification from the entity for actions taken in the normal course of business. d) Ensure that the entity is managed with due care and in a diligent manner and good corporate governance records are maintained to reflect this.

Do I need a warehouse to import medical equipment into the UAE?

In order to import medical in the UAE you must obtain a mainland licence with the correct activities to allow you to import the products to UAE. You must ensure that the equipment you wish to import has been registered by the Ministry of Health and Prevention to certify the product meets the rules and regulations to import and sell in UAE. The activities related to importing medical equipment does require a warehouse as well qualified staff to handle the equipment. It is possible that you could use a registered seller in UAE to distribute to end users , in this case no warehouse or product registration is required.

What are the requirements to sponsor two maids / two domestic staff in the UAE?

With reference to hiring two maids, or two domestic staff members such as a maid and a driver, for one household in the UAE, the requirements are as follows:

The sponsor must have monthly salary of at least AED 20,000
The flat or villa must have at least 2 bedrooms, a hall and separate maids’ room, and must show sufficient space to accommodate family members as well as the domestic staff
The salary of each domestic staff member must be at least AED 1500 per month

Hiring of two maids or domestic staff members is subject for approval. A letter is also required from the sponsor providing reasons why they need to hire two maids and the sponsor may need to show that they have a large family with at least 4 family members to justify the requirement to hire additional staff to the household.

Please contact us for the list of required documents to process domestic staff and maids’ visas.

If you need assistance in obtaining a maid or domestic staff visa of for any other related PRO matter please contact a member of the Sovereign PPG team who will be happy to help, use the contact form below or all us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, or email us at SovPPG@SovereignGroup.com.

Do I need to register unpaid leave and salary reductions for my staff with UAE Ministry of Labour (MOHRE) and how do I do it?

If a company wishes to reduce a staff members salary, reduce hours (temporarily or permanently) or put the staff member on temporary unpaid leave, then this must be mutually agreed in writing by the staff member and the company. The letter agreement must be made voluntarily by the staff member.

Initially there was no mechanism to register these changes officially with Ministry of Human Resources and Emiratisation (MOHRE) – The UAE Ministry of Labour - previously this could only be done by submitting the signed letter from the employee. However following the release of the Ministerial Resolution No. 279 of 2020 to assist companies during the COVID Pandemic Click here for Resolution pdf from Thursday 30th April MOHRE are now accepting the registration of these changes to employment terms through the MOHRE system using a Temporary Supplementary Annex – click here for ANNEX pdf.

Therefore all mainland companies should submit the Temporary Supplementary Annex to MOHRE for each staff member that has agreed to modified employment arrangements, so as to prevent any blocks or fine from MOHRE that may be levied in the future - for example if WPS payments are below the required monthly threshold.

Sovereign PPG can provide support and guidance on this process to assist in obtaining the completed Annex and uploading and registering this with MORHE to ensure compliance.

What are UAE economic substance regulations?

Economic Substance Regulations (ESR) were introduced in April 2019 pursuant to Cabinet Resolution No. 31 of 2019 in order to prevent companies from establishing themselves in the UAE for the purposes of channelling payments which would otherwise be taxable abroad, and has successfully lead to the removal of the UAE from the EU tax haven blacklist. The ESR applies to all entities (including branches and representative offices) incorporated in the UAE (including free zones) and to financial years starting on or after 1 January 2019. The ESR requires entities to conduct an analysis of their income-related activities and using resources such as the flowchart produced by the Ministry of Finance, and the ESR Relevant Activities Guide, determine whether the entity is carrying on a “Relevant Activity” as defined in the ESR and the Ministry of Finance’s summary of Relevant Activities. The outcome from an analysis of the applicability of the ESR to an entity may need to be communicated by way of notification and submission of a report to the applicable authority designated with the responsibility to regulate and administer the ESR (such as the Ministry of Economy for most onshore entities and the free zone authorities for entities located in the UAE free zones).

Do I have to move my employee visa if I want to set up a company in the UAE?

If you are looking to set up a company and if you will be mentioned as a shareholder or manager on the DED Trade Licence of the new LLC then you will need to obtain an No Objection Certificate (NOC) from your current employer, to make sure they have no objection to you doing so. It is not always required for you to move your visa across from the Employee Visa to an Investor Visa at the new company, and certain variables apply here. Please contact a member of the Sovereign PPG team for more information and assistance on this query.

If you need assistance on the investor visa process, NOC letter or any other related company set up, restructuring or local partner matters do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

Do I need an EID to sign a Tawtheeq or lease agreement in AD?

To obtain a commercial lease and Tawtheeq in Abu Dhabi the individual signing on behalf of the company will need a UAE Resident Visa, Emirates ID Card (EID) and a Power of Attorney (POA) over the company to sign the Tawtheeq. Tawtheeq Is then registered with the Abu Dhabi Municipality.

If you need assistance on processing a Tawtheeq document in Abu Dhabi or any other related company set up, restructuring or local partner matters do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

How do I change General Manager for a LLC or Foreign Branch in UAE mainland?

When deciding to change manager for a LLC the first step is always to consult the constitutional documents of the company – the details in the MOA (Memorandum of Association) for the LLC will identify the path which must be followed and who holds responsibility for replacement and appointment of the successor GM.

If the foreign party in a LLC is a corporate entity then the first step will be for the overseas Shareholder to issue a Resolution accepting the removal of the present GM and authorising their replacement. This document should contain, or should be accompanied by a document which contains, the powers of the new GM. This document is also required in the case of a Foreign Branch.

Once this document has been legalised for use in UAE steps must be taken to update the records of the relevant UAE authorities; Notary Public (typically by an amendment to MOA) and DED in the case of a LLC, and DED and MOE in case of a Foreign Branch.

On occasion there may be a requirement to inform another body such as Dubai Municipality, KHDA, HAAD etc (this will depend on your company activities); as well as to inform your company bank to update them. To ensure these step are not overlooked we would recommend consulting with a professional firm who can assist with the process.

If you need assistance with document preparation and notarisation in Dubai or Abu Dhabi, or any other related company set up, restructuring, local partner or PRO support matter and any advice on the procedure to replace the General Manager for a LLC or Foreign Branch in UAE then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

How do I reserve a company Trade Name in UAE?

There are several steps in order to incorporate a company in the UAE. One of the major steps is to Reserve a Trade name.

Once the activity or multiple activities have been chosen, and the appropriate type of entity has been decided upon a Trade Name can be applied for.

There are many considerations to understand when choosing a Trade Name and whether it can be accepted by the DED. Below is a selection of the main points however for a full list contact Sovereign PPG for a full understanding.

The trade name shall not be already reserved for the same activity or any similar activity.
The trade name shall not include any form of religious wording such as the word of “Allah”, “Lord” “God” or any of the God’s Names.
The trade name shall not contain any profanity or discrimination.
The trade name shall not be identical or similar to a local or global brand, or trademark registered in the Ministry of Economy. Example: (Samsung, KFC etc).
The trade name shall not carry the name of any countries and governments and shall not indicate the global political organizations; sectarian or religious affiliation. Example: FBI - Mafia, etc.
It is not possible to reserve a trade name beginning with the word "Universal", "Middle East", "International" or have this in the Arabic translation.
Reservation fees shall be paid within 72 hours from the issuance of payment permit.

The trade name reservation is valid for 6 months. After 6 months If the customer fails to issue the commercial license; the trade name will be automatically cancelled at the end of the reservation period.

The Company may use the trade name of another company which provided the franchise to the Company; provided that the franchise contract shall be submitted to the DED.

DED has the right to cancel or change the trade name if the name is similar to an existing trade name, or if the trade name does not take into account the applicable terms and conditions.

Do I need to have a General Manager for my company or branch in Abu Dhabi or Dubai?

Yes, entities in the UAE, whether onshore or in a Free Zone, are required to appoint a General Manager (GM). The GM under UAE law, is a corporate officer responsible for a number of legal duties and liabilities. The role of GM is the highest post within the company and the GM is responsible for the day to day running of the company and ensuring that the entity complies with all local laws. The roles and responsibilities of the GM will be listed in the constitutional documents of the legal entity. It is important that someone being appointed in the position of General Manager, has a clear understanding of the responsibilities and associated risks of this role.

What is an Estidama Lease Contract - Dubai?

Until recently the Dubai Department of Economic Development (DDED) required all companies in Dubai mainland to rent a physical office space, with a minimum size of 200 sqft in order to issue the DED Trade Licence. The DDED would inspect the office space and approve as part of the licence set up.

However now DDED has permitted companies to use a Estidama or ‘Sustainability’ virtual lease option and allowed smaller companies with fewer staff to set up the licence without a physical space.

This is in line with Dubai’s overall drive to attract more companies and investors and to drive down the set up costs for companies looking to establish in the UAE. Abu Dhabi has also done the same with the expanded Tajer Licence activities and the new Abu Dhabi Freelancer Licence

The Estidama or Sustainability contract is essentially a virtual office. You get a fully lease agreement for the company and this enables you to obtain your Trade Licence. This agreement also enables you to get up to 4 employment visa/labour quota against this space.

A summary of the Estidama Licence

This in Dubai only – Abu Dhabi is using the Tajer Licencing model
There is no requirement to rent a physical office space
The Estidama is issued by Dubai Land Department, and takes the form of a Estidama Ejari
This provides you with a virtual address only
Most providers allow you to rent a dedicated desk, for an extra fee
Business centres can either provide virtual office or an actual office for Estidama but not both
You can renew the licence indefinitely using the Estidama but you cannot switch from a physical space in year 1 to Estidama year 1 for example
Limited number of visas – normally up to 4. Unlike a full Ejari where quota is unlimited based on size
TRN number accessible
Bank account possible
DU/Etisalat possible
This option is not possible for companies that need special approvals

How do I get a Dubai DED Licence with and Estidama?

Sovereign PPG can assist you fully to set up the licence and to obtain the Estidama licence. At Sovereign PPG, our team of expert advisors can help you set up the correct licence, activity, and approvals, register the Estidama licence. For more information, please get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120, for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What approvals do I need to set up a restaurant in Abu Dhabi?

Firstly, it is vital to know specific location where you wish to set up the Restaurant Licence. If you have found a location which is in the mainland UAE, you will require a mainland licence. A restaurant within a Freezone area will need a Freezone licence.

The most common form of a mainland licence is a Limited Liability Company (LLC), which will require a 51% Local UAE Shareholder. If the chosen location is within a UAE Freezone then you can setup as an LLC with 100% ownership using a Freezone licence.

For the specific activity of a Restaurant, preapprovals are required from Abu Dhabi Food Control Authority or the Food Control Department of Dubai Municipality who will request that the premises have met the specific requirements to permit you to open the Restaurant licence.