Requirements for Directors of UAE Meidan Free Trade Zone Company: Are Local Resident Directors Mandatory

Many domestic investors in the Middle East market will confuse the rules of local UAE companies and FTZ companies, mistakenly believing that Dubai companies have to hire local UAE directors. The statutory level of registered enterprises in the US-Dan Free Trade Zone does not require the allocation of local resident directors in the UAE, but the account opening and economic substance level will generate indirect localization supporting needs, and the requirements will vary for different types of companies.

Meidan Free Trade Zone Director Statutory Conditions

1, the official hard and fast regulations

at least one natural person director is required to be set up in the US-Dan Free Trade Zone. Shareholders and directors can be concurrently held by the same Chinese, achieving 100 per cent of the total. Foreign investment control, regulations do not have mandatory provisions for local UAE residents to serve as directors. Directors must be at least 21 years old. One year old, no bankruptcy record, no fraud criminal record can be employed, Chinese citizens do not need to apply for a local visa in the United Arab Emirates, remotely sign documents in the country, complete online verification, can complete the director's filing. Company set up to 4 Directors, all of whom are expatriates, are equally compliant. The concept should be distinguished here. The US-Dan Free Trade Zone only requires a registered address designated by the Free Trade Zone, without UAE guarantors or local directors, which is completely different from the UAE mainland company system.

2, easy to confuse the misunderstanding comparison

dubai, UAE Local Mainland Company Mainland-LLC, even though foreign investors can now hold wholly-owned shares, the government will require the allocation of local service agents in the UAE. Many intermediaries are confused. The concept of "local secretary" and local director, Meidan only requires the official supporting secretary of the free trade zone to be responsible for the annual examination and document submission. The secretary is an administrative staff of the park, not a director of the company, and will not interfere in the business decision-making of the enterprise.

Hiring Local Nominal Directors Potential Risks

1. The nominee director has statutory powers

once a local UAE is appointed to register as a director, the director has signature authority in the official registration system of Medan. The internal holding agreement signed by the two parties only binds the contracting parties and cannot oppose the FTA regulator. In the event of non-compliance and anti-money laundering violations in the later period, the registered directors will have priority in assuming legal responsibility; individual acting directors will also take the opportunity to claim high service fees.

2, exit change procedures cumbersome

if you want to replace a local director in the later period, you need to sign and confirm by the director himself. If the other party refuses to cooperate, the procedure for changing directors will take a long time, which will seriously affect the change of equity and the survival of bank accounts. Therefore, if it is not necessary to open an account, try not to add local directors at will.

Chinese investors practical advice

1. Make reasonable arrangements by scene

if the enterprise only sets up an offshore holding structure and does not open a local UAE account for the time being, all directors can be held by Chinese personnel instead of employing local UAE directors. It is planned to open a local bank account in Dubai and carry out actual business in the UAE in the later period. A compliant local authorized representative can be employed to avoid registering the other party as a registered director as far as possible.

2, do a good job of document compliance certification

the passport and address proof materials provided by the Chinese directors must be notarized by China and certified by the UAE Embassy in China, and the official authorized service provider of the US-Denmark Free Trade Zone shall be selected to register on behalf of the official service provider to reduce the problem of material return.

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