We continue with this article the list of procedures and documents required for setting up in the UAE (Part 1 can be found here):
5. Board Resolution: The Board Resolution is a one page document that states the decision to establish the company, its name and location, who the shareholders are and the percentage of shares. It also states the names of the Directors and who is appointed as the General Manager of the company.
6. Memorandum and Articles of Association: These along with the Board Resolution are arguably the most important documents in any business setup and hence one that requires a lot of attention. Before these are issued, all Directors of the company would have to be physically present for signatures at the Department of Economic Development or its associated licensing entity, in this case Masdar. In our case, unavailability of Directors greatly delayed the production of this document – it took about 3 weeks — so it is advisable to ensure that all directors are concurrently available during this period.
7. Bank Account: Before a trade license is issued, the business must have a location, approved name and all necessary memorandums signed. In addition to these, the business must have an operational corporate bank account containing the minimum share capital, indicated by a Bank Letter. The process of opening a bank account can be done in a few hours but some banks would require up to 4 weeks to process the application. Make sure to enquire on the processing time before you decide to go with a specific bank. Also, be careful of excessive bank charges and “minimum balances” that banks may impose.
8. Power of Attorney: Any business that has more than one shareholder or the shareholders are corporate entities will require a notarized Power of Attorney detailing the responsibilities of the person nominated as the General Manager. Obtaining the PoA can feel like a catch 22 situation, you license isn’t valid without it but you cannot obtain it without the license being issued first. Once our license was issued, we went to the Notary Public in the Abu Dhabi Judicial Department. More tips on this step will follow in our next article.
9. Staffing: No single approach to this fits all organizations; business owners would have to design this process according to their requirement. The project to setup the Nordic Innovation Hub initiative was handed over to an already established team, with a lot of experience in aiding Scandinavian companies in the region. Hence, not much staffing was performed for the Hub; the only hiring that was done was for a native Arabic speaker, which would strengthen the Hub’s networking ability within the region. We took the direct referral approach to staffing; as this has always been the safest route out there.
10. Visas: In the UAE, Resident visas for non-citizens are usually tied to an employment or ownership of a property. Employees of all licensed businesses are eligible for Resident visas however, the number of visas varies according to a variety of criteria, which include; office size, business nature, and category of the employee or the investor. If the business is registered as a local company then liaison with the local sponsor is required to obtain employee visas – at least the first time. To process the visa, just passports and employment letters would be required. Medical insurance is mandatory for all employees in the UAE so this would have to be processed along with the visa.