Dubai has emerged as one of the best business destinations in the world thanks to its economic and business-friendly laws and regulations. Whether setting up a new business or managing an already established company, it is always important to maintain transparency and regulatory compliance with the concerned authorities.
Among many documents that go on to constitute corporate governance and legal compliance, the certificate of incumbency is one of the most important ones.
This document helps greatly in deciding whether or not the corporation is legitimate and helps verify the operational structure of a company.
In this blog, we’re going to talk about what is a Certificate of Incumbency, what it’s used for, specific usage in Dubai, and how to get one, among other things.
Let’s get going without further ado.
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What is the Certificate of Incumbency?
A certificate of incumbency, also known as a register of directors or an officer’s certificate is an official document that a company’s registered agent or corporate secretary issues to publicise the profile of a company, including the following:
- Names of the company’s current directors, officers, and shareholders.
- Confirmation of the company’s good standing and registration status.
- Details of authorised signatories empowered to act on behalf of the company.
This document is very important for legal, financial, and administrative purposes as it verifies the legitimacy of the operational setup of the company’s management.
The most common use of the certificate of incumbency is to verify someone’s identity, as an authorised person who can enter legally binding contracts on behalf of the company.
Why is the Certificate of Incumbency Needed?
The Certificate of Incumbency is especially useful and significant for companies that operate globally, have subsidiaries, or engage in mergers and partnerships.
There are several key uses for a certificate of incumbency. Some of those important reasons are as follows;
- Company Status Verification – Banks, government authorities, and investors usually demand the certificate of incumbency to ascertain whether the company is operational and legally compliant or not.
- Making Banking Transactions Easy – To open a corporate account at a bank, especially in Dubai, financial institutions require this certificate to affirm the legitimacy of the company itself and its representatives.
- Establishes Trust – A certificate of incumbency promotes trust by providing information about who can legally represent the company, including the decision-makers and signatories.
- Legal Compliance – For a corporation to enjoy good service and do business either in the free zones or the mainland of Dubai, they have to adhere to some legal requirements including a valid certificate of incumbency.
- Ease of Business Expansion – A Certificate of Incumbency is used to authenticate the company structure and act as a supporting document when the company expands operations, enters joint ventures, acquires new business licenses, etc.
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Uses of the Certificate of Incumbency in Dubai
In Dubai, the Certificate of Incumbency is very useful to free zone and offshore jurisdiction companies as well as mainland companies. Among its applications are:
- Opening Corporate Bank Accounts – UAE banks have very strict Know Your Customer (KYC) requirements. Certificate of Incumbency is one of the primary requirements for opening corporate accounts to be used as proof of the authorisation of signatories.
- Obtaining Business Licenses – The free zone authorities may require this certificate as part of the paperwork for renewing or issuance of business licenses.
- International Trade Operations – It is also used by firms involved in cross-border trade or joint ventures as evidence of legitimacy to the foreign partners.
- Corporate Due Diligence – The certificate of incumbency is used to prove the management and ownership structure of the company in the occurrence of mergers, acquisitions, or partnerships.
- Litigation or Legal Proceedings – Courts and legal entities may request the certificate to confirm the identity of those authorised to act on the company’s behalf.
Steps to Obtain a Certificate of Incumbency
The certificate of incumbency in Dubai is simple but requires detailed acumen. The process of making the application is an easy and step-by-step process, laid down below.
- Choose a Registered Agent
Generally, for offshore companies, the certificate can only be issued by the registered agent who has facilitated the company’s incorporation. Therefore, you should make sure that you have hired the services of a licensed and reputable agent in Dubai.
- Get Necessary Documents
These are generally required documents:
- Memorandum and Articles of Association of the Company
- Trade license or Certificate of Incorporation
- Copies of directors’ and shareholders’ passports
- Copies of authorised signatories’ Emirates ID (if applicable)
- Board resolution, if applicable
- Submit application
After all the documents have been prepared, apply through a registered agent or the concerned free zone authority. Mainland companies may have to approach the DED.
- Payment of fees
Costs are likely to run between AED 1,000 and AED 5,000 depending on the jurisdiction and the registered agent. There may be a fee for notarization or attestation.
- Obtain Certificate
When the application is approved, the certificate is issued. The time taken can range from 24 hours in some cases to a couple of weeks in other cases because the application submitted can be complex along with the issuing authority.
Letter of Incumbency
A certificate of Incumbency is also popularly referred to as a “Letter of Incumbency”. It is a simpler document, stating that a company and all its officers are at an active status.
It also contains basic information about the company such as its name, date of incorporation, registered address, etc.
It also contains information about the company management including the names of directors, secretaries, etc.
Attestation of Certificate of Incumbency in Dubai
A certificate of incumbency is an important document, especially for offshore companies with their home offices located in different countries outside Dubai. Attestation of the incumbency certificate is compulsory for it to be accepted as legal and valid in Dubai. The process of attestation involves the following steps;
- Chamber of Commerce Attestation in the home country
- Attestation by the Ministry of Foreign Affairs (MOFA)
- UAE Embassy Attestation in the origin country
- MOFA Attestation
At SEPL Dubai, we have a well-experienced team of professionals who are always ready and available to help you get your Incumbency certificate attested.
Conclusion
The Certificate of Incumbency is a document that no company operating in Dubai, an energetic business hub, can afford to be without.
Whether the company needs to open an account for banking, enhance corporate transparency, or satisfy legal requirements, a certificate of incumbency proves to be a vital document in aiding all the aforementioned activities.
The certificate also verifies the operational structure of the company building further credibility. The certificate of incumbency makes running a business in Dubai an easier task.
Frequently Asked Questions
- Does a Certificate of Incumbency Expire?
No, a certificate of Incumbency does not expire. However, the requesting party will most likely ask you for a certificate that is not older than a few months. You will also need to update the certificate of incumbency if there are any changes in the directors and secretaries of the company.
- What is a Certificate of Incumbency?
It is an official document outlining the structure of the company. It also contains all the details about the directors, secretaries, etc affirming their authority to act on behalf of the organization.
- Does a Certificate of Incumbency need to be Notarized in Dubai?
Yes, a certificate of incumbency must be notarised and attested in the country of origin before it can be used in Dubai.
- Where Can I Get a Certificate of Incumbency in Dubai?
In Dubai you can get an authentic certificate of incumbency from the following sources;
- UAE Trade Registry Smart Portal
- Emirates Registers
- JAFZA Offshore
- Is a Certificate of Incumbency the same as a Certificate of Good Standing?
No, these are two completely different certificates. A certificate of good standing is used to reiterate that the organisation is in good standing with the state and follows all the rules and regulations of the state in which it wants to conduct business. Whereas, a certificate of incumbency is used to verify the legitimacy of a company’s executives and directors.
- How long does it take to acquire a certificate of incumbency in Dubai?
Usually, it takes about 24 hours but in some cases, it may take a few days before the certificate can be issued.