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Important legal documents every UAE startup needs [2022 Guide]

Monday November 21, 2022

Starting a business in the UAE has been time-tested to the point where it is now both fast and straightforward. However, it still requires knowledge of the process and the country’s business practices.

One of the most important aspects is documentation. Without the correct paperwork, your business could fall foul of regulations, resulting in fines or even the revocation of your license. What’s more, correct documentation can smooth many more processes, from hiring and firing employees to protecting valuable IP.

In this article, I’ll cover some of the most important business and legal documents in the UAE, including:

• UAE trade licenses
• By-laws
• Immigration establishment cards
• Ministry of Labour cards
• NDAs
• Contracts and employment letters
• Trademarks
• Asset protection

UAE trade licenses

Any company trading in the UAE requires a license. These licenses fall into several categories, including commercial, industrial, professional, and more. Licenses differ depending on which category they fall into.

Most licenses are multi-page documents containing a range of key details about the company. This includes the legal name and type of the company, along with license issuance details such as dates of validity.

These licenses also include a license number, business details such as company address and contact details, manager information, and a brief description of business activities. They should also contain details on any other owners or business partners. This includes names, nationality and shareholding, as well as company capital.

By-laws

Poor planning always precedes poor performance. That’s why company bylaws are of such importance.

Company bylaws set out how a company is to be governed, detailing the duties, obligations and responsibilities of key members of the business. This includes the board of directors and anyone with significant control or influence.

Naturally, these roles and responsibilities will change as the business grows and evolves. Consequently, bylaws can be changed, too. However, the method of changing bylaws must also be clearly set out. This should include details on who can make amendments and how and when these amendments can be made.

In the UAE, there are several key documents contained within these bylaws. These are the Memorandum of Association (MOA) and the Articles of Association (AOA).

Immigration establishment cards

Another requirement for every UAE company, whether mainland or free zone, is the immigration establishment card. The application for this card is made to the General Directorate of Residency and Foreigners Affairs, and it permits the holder to obtain visa approvals for any expatriate staff they wish to recruit.

Without this card, companies cannot apply for employee visas and therefore cannot employ any person from outside the GCC.

Immigration establishment cards are valid for three years for mainland companies and one year for those in free zones.

Ministry of Labour establishment cards

The Ministry of Labour establishment cards are similar to those above; however, this type is only required by mainland companies.

Essentially, the Ministry of Labour establishment card allows a company to receive workforce approvals from the MoL against its quota. Each free zone company has a limit on the number of foreign nationals that it can sponsor, depending on its size, legal structure, premises and business activities.

With a Ministry of Labour establishment card, free zone companies can gain approvals for foreign hires electronically while ensuring they adhere to their quota amount.

Ministry of Labour establishment cards only need to be applied for once as they are valid for the lifetime of the company.

NDAs

NDAs are a valuable tool in the highly competitive business environment of the UAE. This legal document enables businesses to keep vital information, company secrets, pricing strategies, business plans and much more from public knowledge.

It effectively creates a bubble of strict – and legally enforceable – confidentiality around your business and its employers, contractors, suppliers, business partners and other consenting third parties.

In this environment, it is much easier to plan, share, collaborate on and build new ideas, products and offerings without the risk of information being shared with the wider market.

Contracts and employment letters

The UAE attracts a skilled and diverse talent pool from every corner of the world. So, the recruitment process out here can be highly competitive. In this environment, a swift and comprehensive acceptance letter can mean the difference between employing a new hire and losing them to a competitor.

Once they have officially joined your company, a clear and comprehensive contract will also help ensure that their employment goes without a hitch. Employee contracts should include all details and terms of employment, such as reporting lines, duties, expectations and obligations to the company.

Details of how and when employment can be ended, amended and extended should also be included.

Trademarks

Trademark protection is a hugely important yet largely overlooked aspect of business ownership in the UAE. Many entrepreneurs and business owners believe that registering a company name is all that is required to protect it from being used by others. However, this is not correct.

For sole ownership of your company name, slogans, branding and more, you must also apply for a trademark registration certificate issued by the Trademark Office of the Ministry of Economy.

This process can be lengthy, taking up to a year. However, you can start your application before you have formed your company.

Once your trademark registration certificate has been issued, you will have exclusive rights to your company name (or other trademarked property) across all states in the UAE.

Without trademark protection, third parties may use your company name or branding without legal comeback. Not only is this likely to cause confusion among your customers, but it could also cause financial damage to your company and its brand.

Asset protections

Asset protection is hugely important for all business owners. However, when you are an expatriate business owner, there is even greater need to get your affairs in order with clearly defined succession plans and estates.

For this reason, it is vital that you draw up a will and testament detailing what you wish to happen in the event of your death or incapacitation.

Your will should be made in a manner that is legally enforceable in both your country of origin and the UAE, as well as in any other country in which you have significant holdings.

Without a will in place, your business investments and other assets may be distributed in accordance with Sharia law, which may contravene your wishes.

Speak to the experts at Creative Zone

As you can see, there are many vital steps involved in starting a business in the UAE. And while the process has been designed to be quick and easy, it requires an expert eye. That’s where Creative Zone comes in.

Our expert team are highly experienced in helping entrepreneurs start, grow and thrive with businesses in this part of the world. We can help you, too – with business licenses, visas and all manner of other company documentation.

So, if you’re looking to start a business in the UAE, get in touch today: https://www.creativezone.ae/contact-us/


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