The Path to Acquiring a UAE Company
Table Of Contents
- The Path to Acquiring a UAE Company
- Comprehensive Due Diligence Procedures
- Legal Due Diligence and Regulatory Compliance
- Frequently Asked Questions
- How BUH consulting can assist
- Contact information
set out your Target company requirement
Buying a company in UAE involves multiple steps, clearance and approval from various government agencies, which involves clearly defining your acquisition objectives and criteria.
BUH Consulting works closely with you to understand your vision, reason for purchase, and acquisition budget.
We will help you develop the best course of action, understand the alternatives and provide suitable companies that are available for acquisition.
Confidentiality and Non-Disclosure Agreements
Entering preliminary discussions requires robust protection for sensitive financial and operational information. Non-Disclosure Agreements (NDAs) are crucial to safeguard proprietary data.
BUH Consulting will prepare the necessary documents, ensuring all parties understand their obligations and protection. This provides a secure framework for initial information exchange.
Properly structured NDAs prevent premature disclosure of your intent to acquire a company in UAE, maintaining your strategic advantage. We ensure these agreements are watertight and legally enforceable.
Preliminary Company Valuation
Before extending a formal offer, a preliminary valuation assesses the target company’s worth.
A company’s value depends on numerous factors, with the most critical being:
- Age of the company
- Availability of bank account
- Business activity
- Financial results
- License expiration
- Whether the company is renting an office or desk
- Where the company is incorporated
- Visa allocation
BUH Consulting will advise a company’s value based on the above factors, taking into consideration current market conditions.
For investors who are looking purchase an operational company, we will assign an experienced valuator and appoint an auditor to assess the company’s current financial standing and reconcile accounts receivable and Accounts payable.
Comprehensive Due Diligence Procedures
Due diligence is a critical phase where you scrutinize the target company’s financials, legal standing, and operations.
Many challenges arise from insufficient due diligence when clients acquire a company in UAE on their own. Our structured process mitigates these risks effectively.
Our team analyzes every major part of potential companies to be acquired, including financial, legal, commercial, and operational reviews. This ensures a complete picture before commitment.
BUH Consulting offers due diligence service for all companies registered in UAE, covering:
- Company Due Diligence
- Verification of legal status and incorporation documents
- License validity & activity check
- Ownership structure and shareholder verification
- Screening for sanctions, AML/CFT risks
- Financial compliance review (VAT, Corporate Tax, ESR status)
- Individual Due Diligence
- Identity verification
- Background checks
- AECB credit report assistance
- Litigation & police case checks (where accessible)
- Financial & Compliance Checks
- VAT registration & filing history review
- Corporate Tax registration & compliance status
- Outstanding fines or government dues
- Bank account compliance (KYC/UBO)
- Operational Due Diligence
- Review of business operations & activity suitability
- Verification of office/warehouse tenancy & ejari rental contract
- Inspection of trade licenses across UAE Free Zones
- Transaction Due Diligence
- Verification before buying an existing license
- Checking liabilities, pending renewals, fines, or bans
- Authority fee confirmation (DED, Freezones, Immigration, MOHRE)
- Risk & Legal Checks
- AML risk classification
- Sanction list screening
- Court case verification (if available through client-provided access)
How to find a company for purchase in UAE
BUH Consulting manages an active portfolio of companies available for sale, which can be found here – https://buh-consulting.com/list-of-businesses-for-sale-in-uae/
Finding the perfect company for sale in UAE requires financial due diligence, it is absolutely necessary to complete a deep dive into the target company’s financial health, ensuring there are no liabilities.
Our team scrutinizes debt obligations, contingent liabilities, and off-balance-sheet items. This prevents unexpected financial burdens post-acquisition.
- Reviewing tax compliance and potential tax liabilities is a crucial part of financial scrutiny. We identify any past or future tax exposures.
We also analyze employee compensation structures, and payroll liabilities.
Understanding the company’s capital structure and shareholder equity is key to the transaction.
- Most companies typically do not have any paid up capital, for companies that are required to deposit operational funds it is necessary to ensure that these are already in place.
The company’s banking relationships and credit liabilities are also important considerations.
Legal Due Diligence and Regulatory Compliance
Legal due diligence examines the target company’s corporate structure, licenses, and permits, ensuring the company is adherence to all UAE laws and regulations.
Our legal team reviews all registration documents, shareholder agreements, and board resolutions.
We verify that all necessary industry-specific licenses and government approvals are current and valid, as non-compliance can lead to significant penalties and/or suspension of the company’s operations.
Contractual Review and Litigation Assessment
If your company of interest have contract in place with internal and external stakeholders, our lawyers will review all material contracts, including customer agreements, supplier contracts, and leases to ensure you are covered.
Our lawyers assess the risk of ongoing or potential litigation, claims, and regulatory investigations.
What is the correct process to follow when purchasing a company in UAE?
Step 1: Identify the Business & Initial Commercial Terms
- Define the Acquisition Structure: Decide whether to you are looking to purchase an operational company with customers, suppliers and employee, or are you only interested in the age of the company – also known as a shelf company.
- Execute Non-Disclosure Agreements (NDA): Protect proprietary business data and trade secrets before accessing confidential operational and financial records.
- Draft a Letter of Intent (LOI) / Memorandum of Understanding (MOU): Outline preliminary terms, key valuation figures, payment structures, and exclusivity periods.
Step 2: Comprehensive Due Diligence
Before going ahead with the purchase, complete a multi-layered due diligence check across six essential pillars:
- Company Due Diligence: Verification of legal status, trade license validity, active business activities, and official ownership structures.
- Financial & Tax Due Diligence: Review of audited financial records, active Corporate Tax registration status, historical VAT returns, and verification of any pending Federal Tax Authority (FTA) liabilities with Corporate Tax (CT) and Value Added Tax (VAT).
- Operational Due Diligence: Review of active tenancy contracts (Ejari for Mainland or Free Zone lease agreements) and trade license activity coverage.
- Individual & UBO Checks: Ultimate Beneficial Owner (UBO) verification, AML/CFT screening, background checks, and litigation or police record verification where applicable.
- Transaction & Liability Due Diligence: Auditing outstanding government dues, commercial bank account compliance, pending renewals, or potential bans with regulatory authorities such as DED, MOHRE, and Immigration.
- Risk & Legal Checks: Reviewing customer/supplier contracts, employee visa allocations, Wage Protection System (WPS) compliance, and accrued End-of-Service Gratuity liabilities.
Step 3: Legal Structuring & Contract Drafting
- Share Purchase Agreement (SPA): Draft a formal SPA outlining indemnities, seller representations, warranties, and post-closing liabilities.
- Board & Shareholder Resolutions: Our team will prepare the necessary resolutions approving the sale, transfer of shares, and management restructuring.
- Articles of Association (AOA) Amendment: BUH Consulting will draft an amended Memorandum/Articles of Association reflecting the incoming shareholder structure.
Step 4: Regulatory Approvals & Share Transfer
- Department of Economy and Tourism (DET) / Free Zone Authority Submission: Submit official transfer applications to the relevant licensing body – Department of Economic Development for Mainland companies, or respective Freezone’s licensing department.
- Notarization & Execution: Sign updated MOA/AOA documents before a UAE Public Notary or via official digital signing portals with each freezone.
- Third-Party Approvals: Obtain industry-specific NOCs from regulatory bodies (e.g., DHA, RTA, Telecommunications and Digital Government Regulatory Authority (TDRA), or Central Bank) if applicable.
Step 5: Post-Acquisition Updates & Handover
- Operational Handover: Transfer physical assets, Ejari leases, utility accounts, domain names, intellectual property, and internal accounting systems.
- License & Immigration Updates: Reissue the modified Trade License, update the Establishment Card, and transfer manager/signatory roles under MOHRE and Immigration systems.
- Banking & Compliance Transfer: Update bank account signatories, notify financial institutions of UBO/KYC changes, and transfer VAT/Corporate Tax profiles on the FTA portal.
Frequently Asked Questions
How long does it take to buy a company in UAE?
The timeline varies greatly depending on complexity, but typically ranges from few days to a couple of months.
Our team streamlines the process through efficient due diligence and negotiation, ensuring timely progress for our clients.
What are the main legal risks when acquiring a business in Dubai?
Key risks include undisclosed liabilities, non-compliance with regulations, and issues with contracts or intellectual property.
Do I need a local partner to buy a UAE company?
Recent reforms allow 100% foreign ownership in many sectors within mainland UAE and free zones.
We advise clients on the specific ownership structures permitted for their target industry and location, ensuring full compliance and optimal control for your acquisition.
How do I value a company before making an offer?
Valuation involves analyzing financial statements, market conditions, and future projections using various methodologies. Our experts at BUH Consulting provide comprehensive company valuation services UAE, giving you a clear, data-driven basis for your offer. This ensures you make an informed and strategic investment decision.
What post-acquisition support does BUH Consulting offer?
We provide extensive post-acquisition support, including legal registration updates, corporate governance advice, and integration strategies.
Opening of bank account (if closed or company did not have one)
Applying of partner, investor, employee, and family dependent (sponsored) visa
Is it possible to purchase a company without physically being in UAE?
All freezones allow company share transfer process to be completed entirely online, while Department of Economic Development (DED) generally requires the buyer to be physically at the service center to complete the share transfer process.
In such situation, there are two options available:
- Our team can assist in obtaining the pre approval before your arrival to ensure there is no complication.
- BUH Consulting can sign the ownership transfer on your behalf, while 100% of the company shares belongs to you.
How BUH consulting can assist
Our team help you understand the best method to purchase your desired company without any hiccup and suitable solutions for complicated situations.
Contact information
For a tailored solution, contact us to discuss about your requirements.
Email: – sam@buh-consulting.com
Phone: +971585086656
Whatsapp: +971585086656
Telegram: BUHConsultingAE