If you wish to authorize a third party (an individual, who is not a shareholder, a manager or an employee of your company) to run errands on your behalf and on behalf of your company, you will be required to arrange a power of attorney (POA) from you to this third party.
In order for the POA to be recognized by various state authorities in the UAE, the document shall be prepared and duly certified either:
1) outside of the UAE (in the country of your permanent residence). In this case, in order for the POA to be recognized by the UAE authorities as an official document, it has to be legalized. Legalization of the document involves the following steps: a) drafting of the document itself, b) translating it into English/Arabic, c) notarizing the translation, d) further attesting the document in the Ministry of Justice in the country, where the POA is prepared (or other relevant authority), e) then in the Ministry of Foreign Affairs in the same country, f) and finally in the UAE consulate or embassy in the country, where you prepared your POA in. At the end of the day, if you wish the document to be accepted in the UAE, you will need to visit the Ministry of Foreign Affairs in the UAE and obtain the relevant stamp on the document. REMEMBER: UAE consulates/embassies in different countries may have slightly different requirements with respect to the language the documents shall be translated into. For example, in Russia the UAE consulate only accepts those documents for legalization, which are translated into Arabic and English translation is not sufficient. Therefore, before initiating the legalization process, check with the UAE embassy/consulate in the relevant country, which language you shall translate your documents first into;
2) in the UAE. If you prefer this more straightforward approach, you will have to prepare a draft of the POA in English. Then it would be recommended to prepare a bilateral legal translation into Arabic. Finally, you will have to visit a Notary Public and notarize the document in the local court and pay all the required government fees. This second option of preparing the official power of attorney is less expensive and in general the process of POA preparation and attestation may take one day only.
In case of the first option, on the other hand, the process may take up to 2 to 3 weeks or even more and the cost of preparing such power of attorney this way would be much higher as well. Nevertheless, the first approach may be your only option, if you have no plans to come to the UAE in the nearest future and you need to authorize someone to act on your behalf.
It is important to mention that not all of the UAE government, semi-government and private institutions accept POAs. For example, banks in the UAE do not work with the powers of attorney at all. This means, for example, that if the POA includes a paragraph which gives the authority to a person to open a bank account, bank will not accept this power of attorney as an authorization to open a bank account on someone’s behalf. As such, it is important to make sure, that the institution you plan to approach, accepts the POAs. Additionally, it is also necessary to get the approval of the draft (the wording of the document), prior to its attestation or legalization. This is particularly important when you are preparing the POA for the sake of making one single transaction, for example, for the share transfer in your company or for the company registration.
Let us give you a practical example, as to how we approach the POA preparation procedure. First of all, we contact the relevant institution, where we plan to present the POA in order to complete a certain transaction. Next we submit a draft of the power of attorney, requesting to confirm that the wording of the document is compliant with the requirements of the institution. The representative of the institution may confirm that the POA shall be accepted, or alternatively, he or she might inform that the wording of the POA can be generally accepted after certain adjustments are made and advise as to the specific amendments to be made. For example, the POA states that we are generally authorized to register companies in the UAE on behalf of the client, but the institution we plan to present this POA to requires a reference to a specific free zone to be made (e.g. Sharjah Media City). As such, in case you are not preparing a general power of attorney for all possible scenarios but you require the POA to carry out a specific transaction (e.g. share transfer, company registration, etc.), it is always recommended to check the wording of the document with the relevant authority first, before you learn that after all of your efforts the document cannot be accepted.
In order for the power of attorney, which is prepared in the UAE, to be attested, only personal presence of a person giving the power (“Principal”) is required at the Notary Public. The person who is given the power (“Agent”) does not have to be physically present both in the Notary Public and in the UAE in general. As such, the Principal has to visit the Notary Public on his own and bring with him power of attorney draft, his original passport and a passport copy of the Agent.
Please note that there are no nationality restrictions with regards to the POA issuance and attestation. You can issue a power of attorney to a person holding any passport. Additionally, an Agent, a person you wish to give a POA to, does not have to be a UAE national or a UAE resident.
While the POA you issue gives certain powers to an Agent, it does not deprive you, the Principal, of the same powers. In other words, if you, being the owner and the manager of the company, authorized a third party to carry out a share transfer procedure on your behalf, you can still sign all the relevant share transfer documents on your own, if you want to.
The Power of Attorney document may be issued for unlimited time and contain no expiry date or it may refer to a specific date it shall be valid to. Additionally, if the need arises, there is a possibility to mention in the POA authority of the Agent to further delegate the stated in the document powers to other Agents.
The POA in the UAE is always prepared in three copies: one for the notary, one for the Principal and the third copy goes to the Agent.
If the POA was initially prepared and notarized in the UAE and you need to cancel it out of some reason, you will have to visit the notary in the court, where the document was notarized, and ask for its cancellation. The process of the document cancelation is done on-site upon payment of the relevant government fees.
Also, oftentimes, company’s management and shareholders are keen to use internal documents/decisions for the purpose of delegating certain powers, such as execution of commercial contracts on company’s behalf, to the third parties. In case your client or customer is satisfied with fact that the authority to sign on your behalf was given to a third party via the internal company document/decision, which was not attested by any external authority, then this might work. However, it is important to mention that in case this kind of documents is presented, for example, as a proof that a third party had a right to sign on your behalf to a government authority in the UAE, the document shall not be considered official and valid.
To sum everything up: in case the internal company documents/decisions are considered by your clients and customers as a sufficient proof to sign on your behalf, then having these documents/decisions, most probably, would be enough. Nevertheless, in case you wish to hold an actual valid official document that can be presented to the government bodies in the UAE if need arises, it is recommended to prepare an official notarized or legalized POA following one of the approaches we described at the start: either outside of the UAE within 2-3 weeks’ time or inside the UAE within one hour with the full assistance from our company.
Business Boutique | UAE-Consultants.com has an expertise in company formations and all business consultancy matters within Dubai and the UAE. We would be happy to assist you with any follow-up queries within our competency. You can contact us via [email protected] or via our office phone no. +971 4 368 48 84.
Prepared by Business Boutique | Published on Oct 2, 2018
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