In the ever-competitive business world of the UAE, it is now more than ever commonplace to see business’s switch from one Free Zone to the other in a bid to lower operating costs, ramp up productivity and in some instances, foster a better work environment for employees. On paper, switching Free Zones and changing the incorporation jurisdiction might seem like a straightforward task. In practice, however, it is a cumbersome procedure that requires a bevy of protocols including; obtaining new resident permits, informing customers of updated incorporations details, closing current bank accounts and informing relevant third parties/stakeholders. Aside from these already overbearing procedures, there is one seemingly trivial yet markedly important aspect of the moving process business owners tend to overlook – the issue of Licensing

  • New Jurisdiction automatically renders your existing license Invalid

It is pertinent to note that close to 99% of all Jurisdictions in the UAE prohibit the transfer of a business license from one Jurisdiction to the other – a new jurisdiction effectively means a new license.

The procedure for getting a new license like other aspects of the relocating process is in itself tedious; not only are you required to field new contracts, new bank accounts are also mandatory. What’s more, the process of dissolving an existing license requires the applying company to liquidate its entity and nullify any existing visas registered under its name.

Invalidating your organization’s former license is a compulsory step in the application for a new license; but just before you proceed, here are a few salient facts to remember before switching Free Zones.

  • Your company will lose all its history from the official date of incorporation
  • Towing that same path would be all organizational banking history, the implication of this is that the company would be unable to process loans and other financial benefits as it is bound to fall short of the loan criterion
  • The loss of history will also affect the new company’s investment profile.
  • Previously vetoed contracts have to be reviewed and re-signed under the umbrella of the new entity
  • All visas processed under the auspices of the former company will be voided to be replaced by newer Visas bearing the seal of the new company
  • The new corporation will incur additional expenses, in the form of fees for business liquidation, visa cancellation and of course, legal settlements.

The way forward

Relocation and acquiring a new license in a new Jurisdiction doesn’t necessarily have to be a tedious and financially crunching process. There are practical and scalable means to remedy most of the problematic scenarios with switching Free Zones – At How2uae our goal is to provide a clear and concise line of action that leverages you and your company with the necessary skillset to overcome the perils of relocation. Through our veteran team of adroit consultants, we provide advice and guidance on the best way forward for your company.