Change of General Manager in UAE
Do UAE businesses require a General Manager (GM)?
UAE businesses both onshore and in freezones are required to have a general manager (GM) as per the laws and regulations of the country. The general manager is responsible for overseeing the day-to-day operations of the business and ensuring that it operates in compliance with the laws and regulations of the UAE.
The specific requirements for the general manager of a UAE business may vary depending on the legal structure of the company and the industry in which it operates. For example, companies in certain industries may need to have a general manager with specific qualifications or experience.
It is important for a UAE business to have a general manager who is knowledgeable about the legal and regulatory framework in which the business operates and who can effectively manage the business operations, employees, and finances. The general manager plays a crucial role in the success of the business and ensuring its compliance with UAE laws and regulations.
How to change General Manager in the UAE – what are the steps?
Changing the general manager of a business in the UAE generally requires:
1. Reviewing the company's legal structure and governing documents
The first step is to review the company's legal structure and governing documents, such as the articles of association (AOA) and memorandum of association (MOA). These documents outline the process for changing the general manager and any specific requirements that need to be met, including a Power of Attorney (POA) for the GM – this can be a stand alone document or in some cases contained within the MOA.
2. Notify the relevant authorities
The next step is to notify the relevant authorities of the change in general manager. This may include the Department of Economic Development (DED) in the emirate where the company is registered, as well as any other government agencies or regulatory bodies that oversee the industry or sector in which the company operates.
3. Update company records
Update the company's records with the new general manager's details. This may include updating the company's trade licence, memorandum of association, and any other legal documents (new POA for example).
4. Obtain necessary approvals
Depending on the company's legal structure and the specific requirements set forth by the authorities, you may need to obtain certain approvals before the new general manager can assume their role. For example, you may need to obtain approval from the company's shareholders or board of directors.
5. Transfer responsibilities
Once the necessary approvals have been obtained, you can transfer the responsibilities and authority of the general manager to the new appointee.
It is important to seek professional advice from a business such as PRO Partner Group who have experience in UAE business practices and regulations to ensure that the process is completed correctly and in compliance with all legal requirements.
Update documentation to reflect the new General Manager
The following documents will need to be updated to reflect the change in General Manager:
1. The company will need to submit an updated trade license application to the relevant authorities, which reflects the change in the General Manager.
2. The Memorandum of Association (MOA) is a legal document that outlines the company's structure and governance. The MOA will need to be updated to reflect the change in the General Manager, and will contain a new Power of Attorney (POA) for the new GM.
3. The board of directors of the company may need to pass a resolution approving the appointment of the new General Manager and authorizing the change.
4. If the new General Manager is not a shareholder of the company, they may need to provide a power of attorney document (POA) authorizing them to act on behalf of the company.
5. The new General Manager will need to provide a clear and valid copies of the following documents:
- A valid copy of the General Manager's passport
- A copy of the General Manager's valid UAE residence visa
- A copy of the General Manager's valid Emirates ID
Other common documents required from a General Manager for a UAE business include:
- Copies of the General Manager's educational and professional qualification certificates. This may include degrees, diplomas, or certificates related to the industry or field in which the business operates.
- Copies of the General Manager's experience certificates, which may demonstrate their experience in the industry or field in which the business operates.
Depending on the legal structure of the company and the industry in which it operates, additional documents may be required. For example, if the company is a joint stock company, the General Manager may need to provide a list of their shares in the company.
Depending on your company’s business activities there may be a requirement to inform another body such as Dubai Municipality, KHDA, HAAD etc. For example, a general manager in the health facility in Abu Dhabi would require additional approval from Health Authority Abu Dhabi (HAAD).
Additionally, it is required to inform your company bank and update banking documentation.
PRO Partner Group Temporary General Manager Services
A temporary General Manager service is a solution that provides a company with a temporary general manager to fill the role of the General Manager on an interim basis.
The temporary General Manager service can be provided by a professional management company such as PRO Partner Group. A temporary or interim general manager is appointed to fulfil the requirements of UAE law. To fully incorporate an entity in the UAE there are some instances where the GM would need to be present in the UAE or hold a UAE resident visa. It is not always possible that the chosen candidate for GM fulfils these requirements. In this instance, a temporary GM can be appointed to bridge the gap and allow the company incorporation process to proceed without delay.
PRO Partner Group will temporarily assume the responsibilities of the General Manager. The temporary PPG GM is not involved in the daily running of the business but instead assists in ensuring the completion of the incorporation process. Only once incorporation is complete it will then be possible for the true General Manager obtain a UAE visa and assume operations of the company.
It is important to carefully select a reputable and experienced service provider for the temporary General Manager service to ensure that the company's operations are not disrupted, and the transition period is managed effectively.
Fines and Penalties
Failing to update the General Manager of a company in the UAE can result in fines and penalties imposed by the relevant authorities. The exact amount of fines and penalties can vary depending on the specific circumstances, but here are some examples:
- Failure to notify the Department of Economic Development (DED) of a change in the General Manager within the prescribed timeframe can result in fines ranging from AED 1,000 to AED 5,000.
- Failure to update the company's legal documents, such as the Memorandum of Association (MOA) and Articles of Association (AOA), to reflect the change in the General Manager can result in fines ranging from AED 2,000 to AED 10,000.
- Failure to obtain a new trade license reflecting the change in the General Manager can result in fines ranging from AED 5,000 to AED 20,000.
- Failure to update labour contracts and visas of employees to reflect the change in the General Manager can result in fines ranging from AED 2,000 to AED 10,000 per employee.
How can PRO Partner Group assist?
PRO Partner Group team can provide a temporary general manager solution for your business. PPG team have extensive experience with the company formation process and will help to make sure your business is fully compliant with regulatory requirements.
If you need assistance with temporary General Manager services in the UAE or for the best PRO services in Abu Dhabi and Dubai, establishing a company in Dubai or Abu Dhabi, offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at firstname.lastname@example.org or complete the contact form below and we will be delighted to assist you.