How to Purchase a Shelf and Vintage Company in Dubai
Are you looking for a faster company formation solution? Purchasing an already-existing shelf, or vintage company in Dubai in the UAE may be just what you’re looking for to start operations. What makes vintage or shelf companies for sale an option worth exploring? We’ll explain why, and how to go through the process to start doing business in Dubai.
But first, what is a shelf company?
If you’ve ever heard of a shelf company, a vintage company or an off-the-shelf company, the first thing you should know is that these are terms that are used interchangeably to refer to the same concept. A shelf company is a ready-made company that has already gone through the relevant registration processes in the jurisdiction of incorporation but is not active until someone purchases the entity. It is available for purchase.
In the case of the United Kingdom, that means a shelf company is already registered with Companies House, the British government agency that keeps a registry of all companies in the UK and has all the required components to form an entity. The only thing they have not done is commenced trading. Once you decide to buy a shelf corporation, the details that were used in the shelf company would then transfer to your information. These products are attractive for those looking to quickly form an international business presence in a way that offers advantages that let you save time. The process is also fast and efficient to let you become present in your chosen jurisdiction, which in this context, is Dubai.
A shelf company is different from a shell company. A shell company refers to an entity that does not have any business activities and generally does not hold significant sums of money or other major banking assets. It also has a negative connotation because people have gotten creative with how they use these services to skirt legal regulations, including tax evasion and other financial crimes. However, you can see a legitimate use of a shell company for an entity by opening up its chances to go public on the stock market, for a startup to raise funds or providing a way for a company to seek new means of financing.
What are the reasons for buying a shelf company? If you buy a ready-made company, you can begin operations faster because you are switching personal information into your name from the entity that originally formed the new shelf company. It makes the company incorporation process faster than forming an entity from scratch.
How do you buy the right shelf company in Dubai?
In our experience, the key to buying vintage off the shelf companies in Dubai, and in the United Arab Emirates as a whole, is to ensure you keep your due diligence in order. Why? That’s because an offshore company is not subject to any financial reporting requirements. As such, it makes evaluating a shelf company for sale more challenging than in a jurisdiction that has a financial reporting requirement.
Consider the type of company and licences
Just like going through the company formation process in Dubai, you can choose to purchase a shelf company either onshore (on the mainland) or in a Free Zone. Depending on where you intend to carry out your operations, and if you are aiming to serve the Emirati market (such as Ras Al Khaimah) or the wider region, you will want to look for a shelf company where you want to set up. The most common corporate structure for a shelf company is a limited liability company, or LLC.
Another characteristic of Dubai companies is that you have to apply for the licence that covers the activities you plan to carry out in your business. If you are interested in purchasing a shelf company in a Free Zone, you must determine what Free Zone permits your chosen business activity. The vast majority of cases do not allow you to transfer a company’s domicile from one Free Zone to another.
Perform careful due diligence
In our experience, we believe it is preferable to go ahead and open a new company in Dubai since new company formation is streamlined in most cases. However, should you opt for the shelf company route, we require all our clients who acquire shelf companies to pass a previous test that our team of due diligence specialists performs. Why do we insist on such a high standard of quality? That’s because full compliance is a hallmark of our service and we want to make sure that since there is no accounting requirement, you are aware of all potential liabilities. These consequences, whether financial or otherwise, could go into an acquisition beyond the records you could find in the list of shelf companies on the Dubai Companies Register by checking the company name.
An expert partner like Europe Emirates Group will look into the context of the entity, as well as perform a comprehensive check of the shelf company’s financial and credit history, so you know everything behind the shelf corporation you are about to transfer into your name.
After the acquisition, make necessary changes
Before you can commence full trading once the company is purchased, there are some last steps you must complete to finalise the company registration process. You will have to amend the Memorandum and Articles of Association to reflect the names of the new shareholders and directors of your enterprise. If you would like to change the trade name, this is the moment where you can choose to modify it. Then, as we mentioned before, you’ll also have to apply for the relevant business activity licences, so you have the authorisation to run your enterprise as you wish.
Would you like to purchase a shelf, vintage company in Dubai?
The team of Dubai company formation and offshore company formation experts at Europe Emirates Group is ready to guide you through the process of choosing a reputable shelf company that passes through the due diligence standards needed to make a smart acquisition. Would you like to begin the process? Don’t hesitate to contact us today.