Key Takeaways
- Registering late for Corporate Tax costs AED 10,000. A company that registered late for VAT has to account for VAT on every taxable supply it made before registration.
- After a change of ownership, the beneficial owner and shareholder registers must be updated within 15 days of the company learning of it (Cabinet Decision 109 of 2023).
- Central Bank guidance on legal persons lists shell and shelf companies among the known ways companies get misused. An old licence with no activity behind it can make a bank more cautious, not less.
- Federal Decree-Law 20 of 2025 (October 2025) allows a company to move its registration between a free zone and the mainland, provided both authorities agree.
- Each licensing authority sets its own transfer steps, fees and signatories. Put the questions listed below to the authority while your money is still in your account.
When you look at a company for sale in Dubai, the first thing to pin down is what the seller is actually selling. It might be the shares, some of the assets, or just the licence, and each deal carries different risks. The same goes for any other business for sale in Dubai. This checklist covers the records to verify and the questions to put to the authority that registers the change.
Shares, assets or a licence: what you're buying
In a share purchase you take over the company as it stands, with its past fines, tax positions and contracts. In an asset purchase you get only the assets named in the agreement. A licence, the document that lets a company do business, is issued to a named holder. The licensing authority can tell you whether it can pass to a buyer at all, or whether ownership changes by amending the shareholders of the same company.
In an LLC (limited liability company), the owners hold quotas, which are their shares in the company. Assigning quotas needs an authenticated document. The assignment binds the company and outsiders only once it's entered in the commercial register (Commercial Companies Law, Article 79, 2021 text; check the current wording after Federal Decree-Law 20 of 2025).
Federal Decree-Law 20 of 2025, issued in October 2025, amended 15 articles of that law and added one new article. One change lets a company move its register entry between a free zone (an area with its own licensing authority) and the mainland (anywhere outside one) without being wound up. Both the authority it leaves and the one it joins must agree. The implementing rules haven't been published yet. If you plan a move after the purchase, find out whether your authority already applies the new provision. For the wider choice, see the mainland versus free zone guide.
Some companies work in one of the seven strategic activity groups. For those, foreign ownership is decided by the sector regulator, which gives its answer within 14 working days of receiving the application (Ministry of Economy and Tourism, Cabinet Resolution 55 of 2021). Check whether a purchase goes through the same process.
Checks to run on the company's records
Don't rely on the seller's copies. Check every document with the authority that issued it. Each item here is a record an authority holds, and the seller should be able to match it.
- Licence: the number, activities, expiry date, legal form and shareholders. Confirm them with the licensing authority, which is the Department of Economy and Tourism (DET) for the Dubai mainland, the Abu Dhabi Department of Economic Development (ADDED), or the free zone.
- Memorandum or articles of association, the company's founding documents: the current text, who may sign for the company, and any limit on transfers or pre-emption right (the right of existing owners to buy shares first).
- Lease: registered with Ejari in Dubai or Tawtheeq in Abu Dhabi, in the licensed company's name, with its expiry date.
- Registers: the beneficial owner register (the real people who own or control the company), the register of partners or shareholders, and the UAE-resident person authorised to give beneficial owner information (Cabinet Decision 109 of 2023).
- Auditor and accounts: the auditor's appointment and the last audited accounts. Every LLC has to appoint an auditor (Article 27).
- Contracts, disputes and powers of attorney: a list the seller signs as complete.
Dubai-licensed companies have a QR code on the Dubai Unified Licence. According to DET's release of December 2023, government entities, suppliers and customers can scan it to retrieve information about the company. You should still confirm the licence number with the authority. The Dubai Land Department's FAQ says a commercial Ejari must be issued under the licensed company's name. If the lease is in the seller's personal name, that needs sorting out.
Liabilities, fines and tax position
Get the Corporate Tax registration number, the returns that have been filed and proof of payment. Check them with the Federal Tax Authority (FTA) through the company's EmaraTax account, the FTA's online portal. A new company has to register within three months of incorporation (FTA Decision 3 of 2024). The return and payment are due within nine months of the end of the tax period.
The penalties are set amounts. Registering late costs AED 10,000. Filing a return late costs AED 500 for each month or part month in the first twelve months, and AED 1,000 from month 13. Paying late brings a monthly penalty at a rate of 14% a year. Failing to keep records costs AED 10,000, or AED 20,000 if it happens again within 24 months (Cabinet Decision 75 of 2023 as amended, as of October 2026).
VAT (value added tax) has its own rules. A business must register once its taxable supplies and imports go over AED 375,000 in the past 12 months, or are expected to in the next 30 days (FTA VAT registration service page, October 2026). If the company registered late, it has to account for VAT on all taxable supplies and imports made before it registered, and the FTA registers it from the date the liability began. Penalties are set by Cabinet Decision 40 of 2017, as amended by Cabinet Decision 129 of 2025 (in force from 14 April 2026). In the Ministry of Finance's consolidated text, late registration costs AED 10,000 (Table 1, row 3). A late return costs AED 1,000, or AED 2,000 if repeated within 24 months (Table 1, row 8). Check these amounts against the FTA's penalty table.
A few other liabilities belong on your list:
- Beneficial owner rules. A second breach costs AED 15,000 for a late update and AED 50,000 for never setting up the register (Cabinet Resolution 132 of 2023).
- Visas. An employer that isn't conducting business gets fined for entry visas. The Federal Authority for Identity, Citizenship, Customs and Port Security (ICP) lists AED 20,000 on its entry permit and establishment card service pages.
- goAML registration. Real estate agents, precious metals dealers and corporate service providers have to register on goAML, the UAE's system for reporting suspicious transactions. In August 2023 the Ministry of Economy and Tourism suspended 50 such businesses for 3 months because they hadn't registered.
After a share purchase, the company is still the same taxable person. Agree who pays these penalties and put that in the sale agreement. An accounting firm can check the filed returns against the books, and an audit firm can review the last audited accounts.
Bank history and the shelf company question
A shelf company is one that was registered and then left unused, often to be sold later. The Central Bank's guidance on legal persons (effective 7 June 2021) names shell companies and shelf companies as typologies of abuse, meaning known ways of misusing companies. It lists them next to nominee shareholders and directors and complex structures. A shell company is one with no operations, assets, employees or physical presence.
When ownership changes, the people the bank has to verify change too. The bank identifies the new beneficial owners, usually anyone holding 25% or more, and updates its risk profile. Under Central Bank guidance (in force from 7 November 2025, according to the rulebook), a bank should not establish or maintain a relationship if it can't complete those checks. Its red flags include a newly formed company funded with large sums and an unclear source of funds.
From the seller, get the bank statements the bank holds, the list of people who can sign on the account, and details of any account a bank has closed. It also helps to ask your own bank early how it treats a company you've bought.
Buying a licence doesn't mean the bank skips its checks. It will still want the business plan, where the money comes from and the ownership chain, because it has to verify the new beneficial owners.
Ownership transfer steps and who must sign
Each licensing authority sets its own transfer rules. They differ between DET, ADDED, the Sharjah and Ajman economic departments and every free zone. Send these questions to the authority in writing before you pay a deposit. The answers tell you whether the licence can pass to you, what the transfer costs and how long it takes. That's how you judge whether the asking price makes sense.
- Is it a change of shareholders within the same licence, and does the licence number stay the same?
- Which application, portal and form are used, and who has to sign: the seller, the buyer, the manager or a notary?
- Do you need an amended memorandum or articles, and must it be in Arabic and authenticated by the authority (Article 14)?
- Which fees and attestation steps apply, and how long does the authority say it takes?
- Does the buyer's nationality, or the company's activity, need a regulator's approval?
- What happens to the lease registration, the establishment card (the immigration record that lets the company sponsor visas) and the Chamber membership?
- Do outstanding fines have to be cleared first, and does the renewal date change?
Once the transfer goes through, deadlines start. A change of name, address, capital, number of shareholders or legal form has to be notified within 15 working days (Commercial Companies Law, Article 15, 2021 text). And until the quota assignment is entered in the register, it doesn't bind the company or outsiders (Article 79).
The ownership registers run on a separate clock. The registers of beneficial owners and shareholders must be updated within 15 days of the company learning of the change. The company may not register a transfer unless the person taking the shares states whether the beneficial owner changes (Cabinet Decision 109 of 2023, Article 8(5)). The Dubai International Financial Centre (DIFC) wants changes in directors, shareholders and beneficial owners reported within 30 days (September 2026 handbook).
Late register updates are fined from the second breach (Cabinet Resolution 132 of 2023). A lawyer in the UAE can draft the sale agreement, including the warranties and indemnities (the seller's promises about the company, and its duty to cover your losses if they turn out to be wrong). The lawyer can also get the authority to confirm the process. These checks cost money before completion, and they decide whether you end up with the seller's unpaid fines.
Visa holders and employees
The staff come with the company, along with their visas and what they're owed. Ask for a list of employees with visa expiry dates, the establishment card status, the health insurance policies and the end-of-service accrual, which is the gratuity the company will owe staff when they leave. Since 1 January 2025, employers in every emirate have had to buy health insurance for private-sector employees. Without it, residence permits can't be issued or renewed. A basic package is listed at AED 320 a year (u.ae, September 2026).
In DIFC, employers pay 5.83% or 8.33% of basic salary into the DEWS savings plan instead of paying gratuity (September 2026 handbook). On the mainland, find out whether the company has an Emiratisation target, a quota for hiring UAE nationals, and whether its contributions are paid. If you plan to change the headcount, the visa steps for a new owner are in setting up a UAE company from abroad.
When to walk away
If the answers don't match the records, walk away. Any of these should stop the purchase:
- The seller can't produce the licence, the registers or the tax registration, or the authority's record doesn't match the papers.
- There are fines or tax arrears, and the seller won't clear them or reflect them in the terms.
- The records show nominee shareholders or side letters that give someone else control or a share of the profit.
- The company has no activity, staff or premises, yet holds a large balance or received a large sum recently.
- A sanctioned or high-risk country shows up in the ownership chain or the customer list.
- The authority hasn't confirmed on paper that the transfer works on the terms you've been given.
If a provider quotes for handling the transfer, the red flags guide lists what to look for in that quote.
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