1. What is the step by step process in getting local LLC license in Dubai ?
In Dubai two most popular forms of local companies are – Sole Establishment with Professional Licence and a Limited Liability Company for all types of commercial licences.
An LLC company has a local partner called a sponsor who holds 51% of the shares in the company. The procedure to establish Dubai LLC is as below. Please note that the process may need documentation depending on your visa status and passport status. There may be additional approvals from Municipality, Federal Ministry or any other Government Department based upon the type of business activity you propose to do.
Step 1. Identify the local sponsor and decide the terms – what will he do for you, what will be his annual sponsorship fee and what agreements and powers is he prepared to sign off to let you run your business without encumbarences. A local sponsor must be a UAE national or a GCC national. A 100% UAE company can also be a sponsor.
Step 2. Based on your business activity identify the type of licence you would need. Find out if it is permitted and what other approvals you may need. Normally most activities do not need approvals other than by Dubai Economic Department (DED). Ascertain the licencing cost.
Step 3. Submit three possible company names and ask your agent to apply for a Company name approval to DED. This is normally done in one day. your passport copy is required.
Step 4. Apply for initial approval to DED. This comes in 2-3 days in normal circumstances.
Step 5. Look for a place of business and make a tenancy contract mentioning the address, area in sq. mtrs. and rent. Licences are not issued without a valid trade address of premises.
Step 6. The next stage is make a LLC memorandum of association which is a contract. If you are satisfied with this sign it in front of the Dubai court official notary public. Your sponsor will sign too.
Step 7. This contract is submitted to the DED along with initial approval and the Tenancy Contract. The licence fee is paid at this stage.
Step 8. Licence is ready in a day.
Subsequent to these steps you would need to apply for Labour and Immigration departments for their formalities mainly to get visas for your employees.
2. What is a bank reference letter? What does it say?
A bank reference letter is one of the Know Your Client (KYC) documents asked by some offshore authorities to register you as a director, shareholder or any other position in the company. It is also asked by some banks to open your bank account.
It is a letter issued by your bank upon your request to a specific authority or “To Whomever it May Concern” stating that you have a bank account in good standing with them. You may also request a bank to put your home address in the letter if they will. This can sometimes be accepted as a proof of address in place of a utility bill.
The letter must be recent, signed and preferably stamped, and on letterhead of the bank. Please click this link to see the format.
Format For Bank Reference Letter
Letterhead of XYZ Bank
Mr. (Name), of (Address) has an account with our bank since date- . The conduct of the account has been in good standing.
His residential address in our records is as below
3. What is legalization of the documents?
Legalization can be by attestation, notarization or by apostille or by combination of all these. Legalization of your company documents makes them authentic and thus acceptable for legal use.Many agencies and authorities want an evidence that your documents are indeed issued by the authority shown on the document. Legalization can achieved by simple attestation by a Bank or any Accounting or Legal firm. Or you may ask the issuing authority to attest your document. Or you can use a notary public to attest it. Or you may use international apostille. Or you may request the embassy of the country where you plan to use the document to attest it.
For example a UAE visa applicant must get his or her educational certificates attested by the UAE embassy in the home country to make them acceptable for the work permit in UAE. Some documents need to attested by the UAE embassy in your home country or the issuing country and again inside the UAE by the Ministry of Foreign Affairs. Legalization requirements vary from country to country and agency to agency.
4. What is an MOA?
An MOA is a Memorandum of Association. When a company is formed the shareholders get together and create a document called Memorandum AND Articles of Association. This is a commonly agreed and signed set of clauses for the company that specifies – What business will the company do, what capital will it have,how many shares will it issue, who are the initial subscribers and how many shares each one has subscribed to, what will be powers of the directors, how often they will meet, what records must be maintained and any other features they deem important to running of the business. Normally in offshore companies these are standard clauses. MOA is signed by all shareholders at the time of incorporation. MOA can be amended from time to time by the shareholders.
5. What is a good conduct certificate?
In UAE for example in Dubai if you need certian type of trade licences like for Tourism Department related activities a Good Conduct Certificate is needed. These are also required in case you need to become a PRO ( a company representative authorised to deal with government departments) for a company.
Good Conduct Certificate is issued by police department. You must go to a police station with original passport and two photos. A form needs to be filled and submitted. You are called in for finger printing and passport checking. A certificate is then issued after 3 days.