Due diligence in the UAE
Checking the Corporate Structure of a Foreign Partner
Before you sign a supply contract, a joint venture, or even a large purchase order with an overseas company, you need to know exactly who you are dealing with. In the UAE, where cross-border deals are the norm, a proper corporate check protects you from financial loss, sanctions exposure, and contracts that turn out to be unenforceable.
Why it matters
The cost of skipping the check
A signed contract with a dissolved company, a sanctioned shareholder, or an unauthorised signatory is not just a legal problem. It can freeze payments, block bank transfers through UAE correspondents, and drag your own company into an AML review. Ten working days of due diligence is cheaper than a year of litigation.
Statutory documents
Request the certificate of incorporation, memorandum and articles, and the latest commercial register extract.
Directors and UBOs
Identify every director, shareholder above 25 percent, and the ultimate beneficial owner behind the chain.
Active status and sanctions
Confirm the company is not struck off, liquidated, or under insolvency, and screen it against UN, OFAC, EU, UK and UAE local sanctions lists.
Signing authority
Match the signatory on the contract against the register of directors or a valid, notarised power of attorney.
Financial health
Look at the last two sets of audited accounts, credit reports and any public litigation records.
Documents to request
Start with the paper trail
Ask the foreign partner to send you a full corporate pack in PDF, dated within the last three months. Anything older should be refreshed by a certified extract from the home-country registry. In the UAE you can then have those documents attested through the Ministry of Foreign Affairs, or accepted under the Hague Apostille Convention if the country of origin is a member.
- Certificate of incorporation and trade licence equivalent
- Memorandum and articles of association, with all amendments
- Current register of shareholders and directors
- Board resolution authorising the transaction
- Passport copies and proof of address for signatories and UBOs
- Last two years of audited financial statements
If the counterparty resists sharing any of these, treat that as a signal, not as a formality. A serious company expects the request.
Verify the structure independently
Documents from the partner are the starting point, not the answer. Every claim in the corporate pack should be cross-checked against an independent source. Most jurisdictions expose at least a basic company registry online: the UK has Companies House Singapore has ACRA, and the EU aggregates data through the European e-Justice Portal. For UAE-based counterparties, the relevant free zone authority or the Department of Economic Development in the emirate of registration will confirm licence status.
- Match names and numbers. Confirm the exact legal name, registration number, and registered address against the public registry, not just the company website.
- Trace the ownership chain. Draw the group structure on paper. Note every intermediate holding company and the jurisdiction where it sits.
- Check the directors individually. Search each director for disqualifications, insolvencies, and adverse media in their home country.
- Screen against sanctions. Run the company, its shareholders, and its directors through consolidated sanctions databases. The UAE Executive Office for AML/CTF keeps a local list that must be checked alongside the international ones.
- Confirm active status. Ask the registry for a certificate of good standing dated within the last 30 days.
The signatory question
Who is actually signing?
A contract signed by the wrong person is not a contract at all. Before your legal team sends the final version for signature, confirm two things: that the person named as signatory has the authority to bind the company, and that the document proving that authority is still valid.
- If a director signs, cross-check the name against the current register of directors.
- If a manager or agent signs, request the power of attorney, and confirm it is notarised, apostilled or attested, and not expired.
- Read the scope of the power of attorney carefully. A POA for opening bank accounts does not cover signing a supply agreement.
- For deals above your internal threshold, insist on a board resolution that specifically approves the transaction and names the signatory.
If the corporate pack, the sanctions screen, and the signing authority do not line up perfectly, pause the deal. Fixing a paperwork gap before signature costs a week. Fixing it after signature can cost the whole contract.
Red flags that should stop the deal
Even a clean-looking corporate pack can hide problems. Some patterns should push a transaction back for a second review, regardless of how attractive the commercial terms look.
- Shareholders or directors resident in high-risk jurisdictions flagged by FATF without a clear commercial reason.
- Frequent changes of directors, registered address, or company name in the last 12 months.
- Nominee shareholders with no disclosed beneficial owner behind them.
- Financial statements that are unaudited, qualified, or missing entirely for a company of meaningful size.
- A signatory who insists on signing without producing a power of attorney or board resolution.
- Bank accounts for payment located in a country different from where the company operates or is registered.
None of these on its own is proof of a problem. Two or three together usually mean the structure has been built for reasons other than doing business, and your compliance team should say so in writing.
Keep the file alive
Due diligence is not a one-time task
The corporate structure you verified in January can change by June. Directors resign, shareholders sell, sanctions lists get updated weekly. For any partner you work with regularly, set a review cycle: light monitoring every quarter, a full refresh every 12 months, and an immediate re-check whenever you learn of an ownership change, a sanctions update touching their region, or a major news story involving the group.
Keep the evidence in one place, dated, and mapped to each contract. When a UAE bank, auditor, or regulator asks how you know your counterparty, you should be able to open one folder and answer within an hour.
Frequently asked questions
Which documents should I always request from a foreign partner?
At a minimum: certificate of incorporation, memorandum and articles of association, current register of shareholders and directors, a certificate of good standing dated within the last 30 days, the board resolution or power of attorney authorising the signatory, and the last two years of audited financial statements.
For UAE use, those documents should be legalised through the Hague Apostille process or attested by the UAE Ministry of Foreign Affairs, depending on the country of origin.
How do I confirm that a foreign company is still active and not liquidated?
Ask for a recent extract or certificate of good standing directly from the company registry in the home jurisdiction, not just from the counterparty. Most major jurisdictions publish this information online, and the certificate should be dated within the last 30 days.
If the registry shows the company as struck off, in administration, or under liquidation, do not sign until the status is resolved and the extract is refreshed.
What sanctions lists should I check when dealing with an overseas counterparty from the UAE?
Screen the company, its shareholders above 25 percent, its ultimate beneficial owners, and its directors against the UAE Local Terrorist List, the UN Security Council Consolidated List, OFAC (United States), the UK OFSI list, and the EU consolidated list.
Repeat the screening at least every quarter for active partners, because sanctions designations change frequently and a designation applied after signing can still block your payments.
How do I verify that the person signing the contract has the authority to do so?
Compare the signatory’s name against the current register of directors from the company registry. If they are not a director, request the specific power of attorney or board resolution that authorises them to sign this type of contract, and confirm it is notarised, still valid, and covers the transaction in scope and value.
Keep a signed and dated copy of that authority in your contract file next to the executed agreement.
What is a beneficial owner and why does it matter?
The ultimate beneficial owner (UBO) is the natural person who ultimately owns or controls the company, usually defined as anyone holding 25 percent or more of the shares or voting rights, or otherwise exercising effective control.
UAE AML rules require you to identify UBOs before entering into a business relationship. If the ownership chain is deliberately opaque, or nominees are used without disclosure of the person behind them, treat that as a serious warning sign.
How often should I re-check a foreign partner I already work with?
Run a light monitoring check every quarter, covering sanctions screening, adverse media, and company status. Do a full refresh of the corporate pack, financial statements, and signing authorities every 12 months.
Trigger an immediate re-check whenever you learn of an ownership change, a change of directors, a sanctions update affecting the country, or any significant negative news about the group.
Can I outsource the corporate check, or should we do it in-house?
Both approaches work. Small teams often outsource the initial due diligence to a specialised firm, then handle ongoing monitoring internally using the file that the external provider hands over.
Larger companies with recurring cross-border deals usually keep a compliance function in-house and only call in external help for complex ownership structures, unusual jurisdictions, or high-value transactions where independent sign-off is required.
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