If you want to do business in the UAE, you definitely want to stay in the country legally. Additionally, you may want your family to stay with you. To do so, you need to become a UAE resident.
There are generally several ways to get a UAE resident status but we will be looking at the one, which is commonly used by UAE entrepreneurs and this is investor’s or partner’s visa. In other words, as the owner of a free zone or a local company, you automatically become illegible for a UAE residency. At the same time, be aware, that UAE offshore company ownership will not entitle you to any UAE residency.
Now let’s have a look at several important things that you need to know from the start.
First of all, remember, that even if you are the owner of the company, you will still need to choose a position or a designation that shall be later mentioned in your visa. The common practice in the northern emirates is to mention “Investor” or a “Partner” as your designation. Some of the emirates do not have this practice any more and you need to choose a certain position for yourself, such as, for example, Executive Director, Manager, General Manager and so on. Regardless of the emirate you choose for the sake of your company formation, there is one crucial thing we can teach you from the start. Always consult the registration authority regarding your future position. Now we will explain, why it is important to do so.
And here comes our explanation: only some positions can be taken by company owners without providing a legalized diploma. Let’s take an example. You own a Dubai free zone company and you did not bring any legalized diploma or other educational certificate with you to the UAE. So the only document you have is a proof that you own a company. You know that you want to hold a position of a “Chief Executive Officer”/“CEO”, so when you apply for your resident visa and pay fees, you mention “CEO” in application form. Suddenly, after two or three days of processing documents, registration authority or immigration authority reverts back to you, requesting to submit legalized diploma, which you do not have. If you could have consulted registration authority or immigration authority directly in advance, you would have learnt that, for example, only “General Manager” position does not require from company’s owner a legalized diploma. And this is just an example. The situation around positions and designations changes all the time. So you should be aware of this and remember to consult your registration authority timely to avoid any inconveniences.
At the same time, there is another aspect to the aforementioned situation. Let’s pretend you are already a sole company owner and the manager of the same company. As soon as your company was formed, you immediately applied for and received your UAE resident visa. As we already advised, you approached registration authority, found out that “General Manager” position would be the most appropriate for you and now you have it mentioned in your visa. But you also knew from the start that in the next 3 months you would be appointing a manager in your stead, who would operate and manage the company. So in 3 months you find the right person, come to apply for his/her visa and here you find out that you can actually appoint this person and apply for his or her visa as a Manager only once you cancel yours. Can you believe it? You just paid over USD 2,000 for your 3 year visa, used it only for 3 months and now you will need to pay again relevant fees to cancel visa and again settle charges to apply for a new one.
Our conclusion and recommendations are as follows: if you know from the start that you will not be the manager later and there will be someone new appointed, make sure you legalize your diploma and apply for a different position from the start. Should you have chosen “CEO” instead of “General Manager” at the beginning and provided legalized diploma, you wouldn’t have been required to cancel any visas later and the new manager would have applied for a “General Manager” position immediately.
So try to think about both things we just mentioned in advance.
The second important thing you should be aware of is that often the amount of share capital you hold determines the ability to apply for UAE residency as the company owner without legalized diploma. Again, let’s have a look at an example: you have three other business partners, with whom you established a company. Share capital of the company is AED 300,000 in total, where all four of you hold AED 100,000, AED 100,000, AED 50,000 and AED 50,000. You personally hold AED 50,000. The time comes to apply for your resident visa, you do not have a legalized diploma and you were initially advised that you can take “Investor” position. However, as soon as you applied you received information that to be able to apply for a UAE resident visa as investor, you need to hold AED 75,000 in a company out of total AED 300,000. The only option you have now is to either change the share capital amount or to legalize your education certificate and choose any position you wish, as a future employee of the company.
While you already understand that you can get UAE residency as a company owner (except for offshore company), you may ask: “But how do I first get to the UAE before even I have a company and apply for my resident visa?” The answer is, you can arrive using a tourist visa and later you can change the status inside the country. We will go through the process of application, visa status change and visa stamping in more details in the next chapters.
However, before we finish this one, let’s remember that you may want your family to stay and live with you in the UAE. Here you shall be aware again of several aspects.
In case you have both a spouse and children, you would need to arrange for them dependent visas. To do this, it would be mandatory to rent an apartment and register respective lease agreement. So be ready to bear extra expenses in light of this.
However, if you have a spouse only and no children at the moment and you are not planning to spend all 365 days in the UAE, because, let’s say, you travel on business all year round, you can either employ your spouse or from the start introduce him or her as the second shareholder of the company.
It is important for us to show you, that there are always options, as to how to structure everything to avoid inconveniences.
Company registration process and resident visa processing may seem very straightforward, but as you can see there are certain aspects you shall be aware of from the start. Our job is to warn you, educate you and turn your experience of building business in the UAE into extremely smooth one.
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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