Compliance Services in Dubai, UAE
Running a business is no less than a game that you play with a motive to win in an arena provided by the respective country. And you can’t play the game of business your way. Just like every game has certain rules and regulations that players must abide by, the “entreplayers” also have to adhere to certain guidelines set out by the country of their company establishment. And you don’t want to be disqualified from the big complicated game named business just because of non-compliance, which is as easy as ABC, provided you know what you have to do and what you don’t have to. All you have to do to win the game is to stay in the game, which is only possible if you simply play by the book!
Importance of Compliance
When a country allows a foreign entity to establish a company on its land using its valuable resources only to provide products and services to its people for some profit in return, it automatically becomes the responsibility of its government to ensure that the business is being run fair and square without causing any harm to their people or environment! Plus, the products and services offered by a business are safe to use or consume. Hence Laws, Rules, and Regulations. For a business owner, being compliant with the laws, regulations, and customs of each host country and community in which they conduct business is of utmost importance and the only way to play safe. If not for compliance with country-specific rules and regulations, no business can persist. And the United Arab Emirates is no exception. Non-compliance with the UAE laws is the surefire way of getting into trouble which can be in the form of hefty fines, imprisonment, reputation damage, work stoppages, lawsuits, or the closure of your business, which you would never want. For instance, there is a fine of up to AED 200,000 and/or imprisonment for up to two years for operating a business without a valid trade license. Also, if the trade license is not renewed on the due date, the violator may be fined AED 250 per month. Now imagine the consequences if you were not obeying the safety procedures pre-defined by the UAE authorities in your manufacturing unit, and a worker got impaired because of this ignorance.
Major Compliance Requirements in UAE for Businesses
Like other countries the world over, UAE also has its own set of rules and regulations, which keeps changing from time to time for all good reasons. Business entities in the UAE are required to abide by several regulations and compliance requirements periodically. Therefore, it is essential that they are au courant and up-to-date with the latest amendments to regulations, especially concerning their shareholders, general manager, and employees. Being compliant with the UAE Laws will help them steer clear of unwanted consequences such as penalties, financial fines, a ban on economic activities, discontinued banking, and business shutdown. Not to mention prison sentences. However, this list must be known for most businesses in the UAE to avoid attracting penalties. Here are five mandatory obligations that can’t be overlooked when you are running a company in any of the emirates of the UAE.
- The UAE Tax Laws: With the implementation of VAT (5%) and Federal Corporate Income Tax or CIT (9%) lately, no Emirate of the United Arab Emirates is tax-free now. Keeping the SMEs on a pedestal, the UAE government has defined a tax slab for businesses operating from the country. For instance, a UAE-licensed business must register for VAT if its annual taxable supplies and imports exceed AED 375,000. Similarly, CIT is applicable to companies crossing the threshold of taxable income above AED 375,000. Upon falling into the tax slab, big corporations are required to register as taxable entities and pay taxes on or before the due date. Not paying taxes can attract severe penalties, such as up to six months of jail time or a fine of AED100,000. Do we have to mention why it’s paramount to be mindful of your tax obligations? Taxes can be different in Dubai for different jurisdictions. It is always advisable to consult a Tax Advisor to understand your tax obligations towards the UAE government.
- Audit of Financial Records: Not just mainland companies in UAE are legally required to do an audit every year to be ready to present to the relevant authorities when demanded. Even free zone authorities may require a yearly audit from the registered businesses under its jurisdiction at the time of license renewal. Seeing that the compliance requirements of the UAE government are now reaching international standards, the time is not far from when audits will become mandatory for all types of companies in the future.
- Economic Substance Regulations (ESR): This compliance requirement is only for those UAE business licenses that conduct specific activities called “relevant” activities. Licenses issued to conduct activities related to Banking, Insurance, Investment Fund Management, Lease-Finance, Intellectual Property, and Shipping are subject to ESR compliance. Headquarters, Holding Company Businesses, Distribution, and Service Centres in UAE are also required to adhere to UAE ESR compliance. Such companies must submit a notification 6 months post the financial year-end and an Economic Substance Report 12 months post the financial year-end. From failing to furnish the essential documentation/reports while submitting reports to failing to meet the ESR test for a particular reason, any kind of ESR non-compliance can land the violator a hefty fine of up to AED 50,000.
- Maintain Ultimate Beneficial Owner (UBO) & Shareholder Register: Ultimate Beneficial Owner (UBO) and shareholder register must be maintained. Any changes made to these registers must be notified to the relevant regulatory authorities through UBO submission to steer clear of any trouble later. An Ultimate Beneficial Owner is a person that is the leading beneficiary when an establishment originates a transaction. Who comprises a UBO will vary from jurisdiction to jurisdiction, but it is usually defined as a specific person who owns or manages their own company or has capital or voting privileges in the base entity. To determine UBOs, a bank will:
- Acquire and study the organization’s credentials
- Look at the chain of ownership.
- Decide who falls under the definition of UBO.
- Conduct an AML or KYC check
To stay compliant with UBO regulations, you must register your UBOs. Businesses may have to fork out a fine of AED 15,000 or more for UBO non-compliance.
- Anti-Money Laundering & Counter-Finance Terrorism: Businesses carrying out specific activities must comply with Anti-Money Laundering (AML) & Counter-Finance Terrorism (CFT) regulations in UAE. The bank itself will take care of a lot of the compliance requirements during the KYC process. However, businesses such as Real Estate Brokers, Precious Metals and Gemstones Dealers, Independent Accountants, and Corporate Services Providers must register with the GoAML system and report suspicious transactions on this system. MoE has published a list of 26 violations. Fines for AML Violations can be 100,000 or more.
The list of compliances in the UAE doesn’t end here. You might have to meet additional compliance needs based on the activity and jurisdiction you have chosen for your business in the UAE.
- Economic Substance Regulations (ESR): This compliance requirement is only for those UAE business licenses that conduct specific activities called “relevant” activities. Licenses issued to conduct activities related to Banking, Insurance, Investment Fund Management, Lease-Finance, Intellectual Property, and Shipping are subject to ESR compliance. Headquarters, Holding Company Businesses, Distribution, and Service Centres in UAE are also required to adhere to UAE ESR compliance. Such companies must submit a notification 6 months post the financial year-end and an Economic Substance Report 12 months post the financial year-end. From failing to furnish the essential documentation/reports while submitting reports to failing to meet the ESR test for a particular reason, any kind of ESR non-compliance can land the violator a hefty fine of up to AED 50,000.
- Maintain Ultimate Beneficial Owner (UBO) & Shareholder Register: Ultimate Beneficial Owner (UBO) and shareholder register must be maintained. Any changes made to these registers must be notified to the relevant regulatory authorities through UBO submission to steer clear of any trouble later. An Ultimate Beneficial Owner is a person that is the leading beneficiary when an establishment originates a transaction. Who comprises a UBO will vary from jurisdiction to jurisdiction, but it is usually defined as a specific person who owns or manages their own company or has capital or voting privileges in the base entity. To determine UBOs, a bank will:
- Acquire and study the organization’s credentials
- Look at the chain of ownership.
- Decide who falls under the definition of UBO.
- Conduct an AML or KYC check
To stay compliant with UBO regulations, you must register your UBOs. Businesses may have to fork out a fine of AED 15,000 or more for UBO non-compliance.
- Anti-Money Laundering & Counter-Finance Terrorism: Businesses carrying out specific activities must comply with Anti-Money Laundering (AML) & Counter-Finance Terrorism (CFT) regulations in UAE. The bank itself will take care of a lot of the compliance requirements during the KYC process. However, businesses such as Real Estate Brokers, Precious Metals and Gemstones Dealers, Independent Accountants, and Corporate Services Providers must register with the GoAML system and report suspicious transactions on this system. MoE has published a list of 26 violations. Fines for AML Violations can be 100,000 or more.
The list of compliances in the UAE doesn’t end here. You might have to meet additional compliance needs based on the activity and jurisdiction you have chosen for your business in the UAE.
Business Compliance Services in UAE to be Outsourced
The UAE has stipulated dozens of regulatory requirements for expat businesses to meet. And to stay compliant with them, every single rule must be understood well. However, it’s not easy to understand the complex regulatory system of the UAE for you, especially if you are new to the country and it’s your first venture. Even if you are well acquainted with the laws, it can be challenging to keep track of all the laws and regulations applicable to your business at a particular moment, but a good business compliance service provider like us can help make things easier.
With so many mandatory laws and regulations in place, doing business in the UAE can be demanding at times. And it’s easy to lose sight of compliance while you are busy with your day-to-day business operations. This is where business compliance service providers come and save businesses from the unpleasant repercussions of any sort of non-compliance with UAE laws. A business compliance service provider, worth their salt, is the one who helps a corporate entity ensure that their business practices are legal and right while keeping them on the ball about the latest changes to the law.
Business compliance in Dubai is not a one-time thing. Just like a toll gate, compliance needs will keep coming on your way every now and then throughout the business journey. You have to do the needful to keep moving without any hiccups. The best way to adhere to UAE regulations is to be prepared in advance and meet the obligations before the deadlines. Easier said than done? Not anymore. Because you have the option to outsource all your compliance tasks, and UAE has no dearth of business compliance service providers. Get in touch with Ingenious Corporate Services in Dubai if you’re seeking reliable business compliance services in UAE. Our compliance services experts in Dubai will help you understand and comply with all the mandatory regulatory requirements for businesses – from ESR and UBO to audits and taxation.
Business Compliance Services in UAE to be Outsourced
The UAE has stipulated dozens of regulatory requirements for expat businesses to meet. And to stay compliant with them, every single rule must be understood well. However, it’s not easy to understand the complex regulatory system of the UAE for you, especially if you are new to the country and it’s your first venture. Even if you are well acquainted with the laws, it can be challenging to keep track of all the laws and regulations applicable to your business at a particular moment, but a good business compliance service provider like us can help make things easier.
With so many mandatory laws and regulations in place, doing business in the UAE can be demanding at times. And it’s easy to lose sight of compliance while you are busy with your day-to-day business operations. This is where business compliance service providers come and save businesses from the unpleasant repercussions of any sort of non-compliance with UAE laws. A business compliance service provider, worth their salt, is the one who helps a corporate entity ensure that their business practices are legal and right while keeping them on the ball about the latest changes to the law.
Business compliance in Dubai is not a one-time thing. Just like a toll gate, compliance needs will keep coming on your way every now and then throughout the business journey. You have to do the needful to keep moving without any hiccups. The best way to adhere to UAE regulations is to be prepared in advance and meet the obligations before the deadlines. Easier said than done? Not anymore. Because you have the option to outsource all your compliance tasks, and UAE has no dearth of business compliance service providers. Get in touch with Ingenious Corporate Services in Dubai if you’re seeking reliable business compliance services in UAE. Our compliance services experts in Dubai will help you understand and comply with all the mandatory regulatory requirements for businesses – from ESR and UBO to audits and taxation.
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