Cross-border deals
How to safely start cooperation with a foreign business
UAE companies sign contracts with partners across Europe, Asia and Africa every day. Most deals go well. The ones that fail almost always share the same root cause: nobody checked who they were actually working with. This guide walks through the checks that protect your money, your reputation and your operating licence.
Step 1
Confirm the company actually exists
Every country runs a public commercial register. The UK has Companies House Germany has the Handelsregister, the US relies on Secretary of State portals, and the UAE itself uses the DED and free-zone registries. Pull the entry, match the legal name, address, registration number and directors against what your counterparty sent you.
Step 2
Screen against sanctions
OFAC, EU, UN and UK HMT lists are updated weekly. Trading with a listed party from the UAE can freeze your bank accounts.
Step 3
Check financial health
Ask for the last two years of audited financials, or pull a credit report. Look for tax arrears, unpaid bank loans and court judgements. A partner drowning in debt will not pay your invoice on time.
Step 4
Read the reputation
Trustpilot, Google reviews, LinkedIn employee posts, trade forums. Patterns matter more than single reviews.
Step 5
Lock the contract
Governing law, delivery deadlines, penalties, force majeure, dispute forum. Write it all down before you wire a dirham.
Step 6
Order a full due diligence report
For any deal above roughly USD 50,000, a professional due diligence provider will pull registry, financial, litigation, sanctions and beneficial ownership data into one report. Cheap insurance compared with a bad contract.
Registry and sanctions
Verifying identity is not paranoia, it is regulation
The UAE Central Bank and the Ministry of Economy expect every business to know its counterparties. Anti-money-laundering rules under Federal Decree-Law No. 20 of 2018 apply to far more than banks: real estate brokers, dealers in precious metals, auditors and corporate service providers all have KYC obligations. If your foreign partner turns out to be a shell with a sanctioned ultimate beneficiary, the fine lands on you, not on them.
The workflow is straightforward. Start with the public commercial register in the partner’s country and confirm the entity is active, not struck off, not in liquidation. Then run the same legal name and directors through a World-Check style sanctions screening that covers OFAC SDN, EU consolidated, UN, UK HMT and PEP databases in one pass. If anything flags, stop, document the hit and ask compliance before you continue. A two-hour check on day one beats a two-year investigation later.
- Match legal name, registration number and address to the registry entry
- Identify the ultimate beneficial owner, not just the signatory
- Screen the company, the directors and the UBOs against sanctions lists
- Save PDF snapshots of every check with a date stamp
Money, reputation and the contract itself
Once the company is confirmed real and clean, the next question is whether it can and will perform. Three things carry most of the answer: their finances, what other people say about them, and the paper you both sign.
- Financial checks. Request audited statements for the last two fiscal years. In many jurisdictions you can also buy a credit report from Dun and Bradstreet, Creditsafe or a local equivalent that shows payment behaviour, court claims and tax arrears. A partner that pays its own suppliers 90 days late will pay you 90 days late too.
- Reputation checks. Search the company name plus words like “scam”, “lawsuit”, “complaint” and “refund” in Google. Read Trustpilot, Glassdoor and LinkedIn. In several industries there are private WhatsApp and Telegram groups where importers and exporters warn each other about bad actors. Ask your chamber of commerce or trade association if the name is familiar.
- Contract clauses that actually protect you. Fix the governing law and the dispute forum (DIFC Courts and DIAC arbitration are common neutral choices for UAE parties). Add a clear delivery schedule with liquidated damages for late performance. Set payment in tranches tied to milestones, not one lump on delivery. Include a specific force majeure clause, a confidentiality clause and a termination-for-cause clause. Have the final text reviewed by a UAE-qualified lawyer, even if the contract is governed by foreign law.
When the numbers get bigger, do not do this yourself. A professional due diligence house will pull corporate registry data, litigation records, media mentions, adverse press, sanctions hits, PEP status, ultimate beneficial ownership and, where allowed, a discreet site visit to confirm the office actually exists and has staff in it. In the UAE the report typically costs between AED 3,000 and AED 15,000 depending on jurisdiction and depth, and it usually arrives within five to ten working days.
That range sounds like a lot until you compare it with the cost of a single unpaid invoice or a container of goods that never ships. For long-term distribution deals, joint ventures and any transaction touching regulated funds, the report is not optional. It is the piece of paper that lets your bank, your auditor and your regulator see you did your homework.
“Do the boring checks first. Registry, sanctions, financials, references. Ninety percent of bad deals reveal themselves in the first afternoon of work, if you actually do the work.”
A short checklist to keep on your desk
- Legal name, registration number and address confirmed against the official commercial register
- Directors and ultimate beneficial owners identified and screened against sanctions and PEP lists
- Two years of audited financials or a paid credit report on file
- Independent reputation search across reviews, media and trade groups
- Contract reviewed by a UAE-qualified lawyer, with governing law, dispute forum, milestones and penalties
- Payment structured in tranches, first tranche small enough to lose without pain
- Full due diligence report ordered for any deal above your internal threshold
Frequently asked questions
Do I really need to check a foreign company if we already had a video call and their website looks professional?
Yes. Websites and video calls prove nothing about legal existence, ownership or financial standing. Fraudsters routinely register clean-looking domains and hire actors for calls. A ten-minute lookup in the country’s commercial register, plus a sanctions screen, tells you far more than any pitch deck.
Where can I find the official company register for a foreign partner?
Most countries publish their register online for free or for a small fee. Examples include Companies House in the UK, the Handelsregister in Germany, INFOGREFFE in France, the SEC EDGAR and state Secretary of State sites in the US, and the DED and free-zone portals in the UAE. For unusual jurisdictions, the OpenCorporates aggregator is a useful starting point before you go to the primary source.
How do I know if a foreign company is under sanctions?
Screen the legal name, directors and ultimate beneficial owners against the OFAC SDN list, the EU consolidated financial sanctions list, the UN Security Council list and the UK HMT list. For UAE-based businesses, using a consolidated sanctions and watchlist tool that pulls all of these in one query is much safer than checking each list by hand, because updates happen weekly and manual checks miss changes.
What contract clauses matter most in a cross-border deal?
The four that carry most of the weight are: governing law and dispute forum (many UAE parties choose DIFC Courts or DIAC arbitration for neutrality), a payment schedule tied to milestones rather than a single lump sum, liquidated damages for late delivery or non-performance, and a clear termination-for-cause clause. Add confidentiality and force majeure, and have a UAE-qualified lawyer review the final text.
When is it worth paying for a full due diligence report?
A good rule of thumb is any single transaction above roughly USD 50,000, any long-term distribution or agency deal, any joint venture, and any deal involving regulated funds or licensed activities. In the UAE these reports typically cost AED 3,000 to AED 15,000 and take five to ten working days, which is cheap compared with the exposure on the deal itself.
How can I check a foreign company’s financial health from the UAE?
Ask the partner directly for two years of audited financial statements. In parallel, buy an independent credit report from Dun and Bradstreet, Creditsafe, Coface or a local equivalent in the partner’s country. These reports show payment history, court judgements, tax arrears and bank filings that the company itself is unlikely to volunteer.
What are the warning signs I should walk away from a foreign partner?
Refusal to share registration documents, mismatches between the legal name and the trading name, a registered address that turns out to be a mailbox, pressure to sign quickly or pay in full up front, requests to send funds to a third-country account that does not match the company, and any hit on a sanctions or serious adverse-media search. Any one of these is a reason to pause, two together is a reason to stop.
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