Company redomiciliation in the UAE free zone

Companies may choose to redomicile their business for various reasons. When planning major changes, it is important to choose the country that best suits your goals and expectations.
In recent years, the UAE has become increasingly popular in the international sector. A modern legal system, a favorable tax regime, stability, and financial opportunities make the Emirates an attractive jurisdiction for entrepreneurs.

Which free zones allow redomiciliation

The following free zones are among the most popular:

Dubai International Financial Centre (DIFC);
Abu Dhabi Global Markets (ADGM);
Jebel Ali;
Dubai Multi Commodities Centre (DMCC);
Ras Al Khaimah Economic Zone (RAKEZ);
IFZA.

Companies operating in free zones are regulated not only by federal laws and regulations of a particular emirate, but also by regulations established within these zones. Each free zone has its own management structure, immigration offices, and other government agencies. Some of them have their own courts. The most developed regulatory systems are those of the DIFC and ADGM free zones, which, among other things, actively use institutions of English law.

Advantages of free zones

Foreign citizens can be 100% owners of onshore companies in these zones.
Such free zones have a favorable tax regime.

In free zones, there is zero tax for companies that meet a certain set of criteria and are recognized as Qualifying Free Zone Persons.

Redomicile requirements

Before starting the redomiciliation process, certain requirements must be met.

Jurisdiction of registration. It is mandatory to register in the jurisdiction where business redomiciliation is permitted.
Compliance of documents. The founding documents will be checked to see if redomiciliation is possible and if all corporate procedures have been followed.
Legal processes. The company must go through the legal process of redomiciliation – collecting and submitting documents, as well as obtaining a “certificate of continuation.”

Company corporate documents

Certificate of Incorporation;
Notification/consent of the Registrar for the procedure;
Certificate of Incumbency;
Certificate of Good Standing;
Articles of Association (MOA&AOА).

Legalization of corporate documents is mandatory. Originals are sent to the UAE.

Documents for applying for company relocation

consent certified by the registration agent;
copies of documents collected in accordance with paragraph 1 and certified by the registration agent;
3 originals of the Articles of Association in accordance with the UAE model, signed by the shareholders;
notarized resolution of the director/shareholder;
letter from the director regarding the company's solvency.

After all checks have been successfully completed, the registering authority adds the company to the UAE register of organizations and issues a certificate of continuation of their work. It should be noted that this document confirms the company's new legal address in the UAE.

Redomiciliation from offshore to onshore

One of the advantages of redomiciliation is the ability to transfer an offshore company to an onshore jurisdiction. This means that the company obtains “resident status” upon exit, securing stronger banking relationships and other benefits.

What problems can arise in redomiciliation

Although the process itself is quite simple, some difficulties may arise in the process. Banks, by issuing new regulations, can stall the process or create barriers to the transition, in which case redomiciliation from one jurisdiction to another will be impractical.

Barriers can also be encountered at the legal level. For example, a particular jurisdiction may not have the regulatory framework for relocation. Some jurisdictions have their own classification of company shares, and the new one may not imply them.

Transferring a company from one free zone in the UAE to another

Liquidating the old company

First, you need to liquidate the old company. To do this, you need to:
- Send a notification of your intentions to the regulator.
- Complete all obligations to creditors, employees, and contractors.
- Conduct a final audit and send the final reports.
- Close the company's bank accounts.
- Cancel the license and permits issued to the company.
Registering a new one in another free zone

Once the above steps have been completed, you need to start the process of registering the company in another economic zone.
- Select a new special economic zone.
- Prepare documents, including passports of shareholders and directors, proof of address, etc.
- Submit an application to register a new company in the selected special economic zone.
- Obtain new licenses and permits to conduct business.
Transferring assets and employees

Next, you need to carry out the process of transferring assets and employees. Execute new employment contracts with those who are transferring to the new company, and then open new bank accounts.
Final procedures

The final procedures include:
- Updating contracts. You must inform your partners and customers of the change of location and new contact details.
- Settle any remaining disputes or claims related to the former company, if any.
Done!

F.A.Q.

Is it possible to redomicile a company with debts?

No, most UAE free zones require confirmation that the company has no outstanding debts before the transfer. If the business has outstanding obligations, they must first be repaid or an agreement reached with creditors, otherwise the regulator will reject the application.

What happens to directors and shareholders after redomiciliation?

Their composition may remain the same, but depending on the rules of the selected free zone, it is sometimes necessary to appoint a registered agent. Business owners usually retain their shares, but the company structure must comply with UAE laws.

How will redomiciliation affect the company's intellectual property and assets?

Trademarks, patents, and copyrights must be re-registered to the new legal entity in the UAE. As for assets (real estate, accounts, equipment), their legal ownership must be reviewed to avoid tax or regulatory risks.

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