United Arab Emirates Cabinet Decision No. 34 of 2020 with Cabinet Resolution No. 58 of 2020 on the Regulation of the Procedures Related to Real Beneficiaries (“Decision”). Companies registered and licensed in UAE excluding in the financial free zones to complete the registration process of their Ultimate Beneficial Owner (UBO) and to submit to the Registrar before the communicated deadlines. Nex consultants can support you with all Regulations and compliance related process including UBO declaration and record maintenance.
The United Arab Emirates Cabinet issued the Cabinet of Ministers Resolution No.31 of 2019, that requires all in-scope UAE entities to maintain an economic substance. Further clarification on the application of the Regulations was issued on 11 September 2019. The Regulations require UAE onshore and free zone companies and other UAE business forms that carry out any of the “Relevant Activities” to maintain an adequate “economic presence” in the UAE relative to the activities they undertake. As of every time, the country has selected those “Relevant Activities” in the region and that are directly involved in the boom of the economy of the country, to have economic viability for steady and stable growth of the same. Even though such strict regulations have been implemented, the resolution clearly states exemptions for certain category.
Value Added Tax (VAT) is an indirect tax. It is a tax that is derived from value added to the production or sales/distribution stages and in most cases, it is a tax that is destination-based. In some countries, it is referred to as GST – Goods and Services Tax. The Federal Tax Authority of the United Arab Emirates has now opened its official VAT registration portal, allowing eligible businesses to register for VAT starting 1st of October, 2017. VAT will be effective from 1st of January, 2018 at the rate of 5%. It is mandatory for businesses that are resident and operating in the UAE to register for VAT if they make taxable supplies in excess of the VAT registration threshold of AED 375,000 per year. Voluntary registration shall be available to businesses which make taxable supplies above AED 187,500 per year. The Authority shall issue an Administrative Penalties Assessment for taxable businesses failing to submit a registration application by 31st of December, 2017.
We help our clients with registration and filing of VAT and Excise TAX advisory in the UAE. Some may find tax return filing process complex, that’s where Nex Consultants plays its role. We keep track of all the local, regional and international rules and update the VAT filing process. The TAX payment needs precision and timely action. Prompt evaluation and rapid action is our methodology in this regard. Necessary documentation and financial evaluation will be done by us to ensure scheduled processing of VAT/TAX. Reach out to us our expertise in this field can be a helping hand for your business. We will be glad to assist you.
4. Anti-money laundering (AML) / Combating the Financing of Terrorism (CFL)
Anti-money laundering (AML) refers to the procedures, laws and regulations to prevent from illegally obtaining funds as legitimate income. In December 2020, the UAE Cabinet adopted the formation of the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism with an aim to follow the international requirements in this sector. Nex consultants can help you with AML regulations and can ensure you to maintain effective risk and compliance programs that promote business opportunities with all regulatory practices.
AML /CFT Compliance for real estate company in Dubai, United Arab Emirates.
The UAE government has implemented various laws and regulations to combat money laundering, terrorist financing, and other illicit activities. The UAE’s National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations (NAMLCFTC) developed a national strategy to combat money laundering, which was launched in 2018. The strategy outlines measures that the UAE government will take to deter money laundering, both domestically and internationally. The Dubai Land Department (DLD) is responsible for regulating and monitoring the real estate sector in Dubai. It has put in place a number of regulations to ensure compliance with AML/CFT procedures. These regulations include the Implementing Regulations of Law No. (3) of 2006, which are applicable to all real estate brokers and valuators, and the Resolution No. (1) of 2020 that relates to trust accounts and alternative regulatory requirements.
Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay workers’ wages via banks, exchanges, and financial institutions approved and authorized to provide the service. The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages. The WPS covers all institutions registered, irrespective of freezone or mainland, with the Ministry, across all the sectors and industries and will benefit all categories of labour.
Institutions failing to transfer workers’ wages by the deadlines specified above will be denied the right to have new work permits. This ban will only be lifted in the month following the transfer of workers’ wages in full. Institutions that delay wages’ payment more than one month of the due date will be denied the right to have new work permits, along with all institutions owned by the owner of the violating institution, and to refer all those responsible for the violation to the court, in accordance with Ministerial Resolution No. 788 of 2009.
Nex Consultants provides you an easy and user friendly solution for processing your employee’s salaries as per the UAE Central Bank and UAE Ministry of Labor requirements in accordance with the UAE Wages Protection System.
6. Financial Auditing and Accounting
Accounting and financial auditing are the spinal cord of an organization, and it plays a major role to track the income and expenses. For the hassle-free operation of your business, a certified accountant and an excelling, fool proof auditing is always important. It helps you to generate accurate financial position of the company. As per the UAE prevailing norms and regulations, it is mandatory to have clear financial outlooks for all firms operating in the country; irrespective of mainland, free zone and offshore. It is compulsory by the law to maintain detailed and accurate books of accounts and the same need to be audited by a registered auditor. This is not only a general requirement by the authorities, but also need to fulfil the compliance requirements of the country and international business community.
To comply the AML requirements, all the authorities worldwide relay on audited financials of the company. Banking and financial institutions in the UAE have to comply certain major regulations with the UAE central bank and the relevance of the audited financial report splash again to the mainframe. Any companies not following accurate books of accounts finds it very difficult to deal with a local as well as global financial institution. Apart from AML, FTA also rely on the audited financials of each company registered. To fulfil the FTA requirements also, the relevance of books of accounts is very much necessary.
We at Nex Consultants offering comprehensive accounting and bookkeeping services to make hassle free administrative of your organization. There are several functions that an outsourcing company carries out for managing your accounting work including preparing and maintaining records of balance sheets, consistent drafting of financial profit & loss of the company, managing and updating ledger accounts, bank statements, and other investment and collection tracks.
Our expert chartered accountants, financial experts, and clerks work on various accounts and bookkeeping related jobs. They are highly trained and dexterous enough in handling enormous tasks in the most lucrative way.
7. Corporate Tax
The United Arab Emirates is all set to introduce the first Direct Tax in its history, Corporate Income Tax, honoring International Taxation Practices and diversifying income sources. It is time for business entities to prepare themselves for the change. Every Tax legislation provides ample room for rebates, deductions and exemptions. So far, Any foreign taxes incurred on an income shall be deducted for the purpose of corporate tax. Accumulated losses of a year shall be allowed to offset future taxable profits. Tax Grouping and reorganization can be attempted and intra group transactions or losses incurred by an entity shall be dispensed with. Get in touch with Nex Consultants to keep updated to well plan your finances and save tax legally.
As per the UAE company law, all the companies registered in the country should possess a valid trade license to commence the business legally. Irrespective of the authorities or geographical area, all the business enterprise should get a permit or a valid license to operate in the specified area and the country. Till recently, only the validity of the license or permit was mandatory for the smooth working of the business. Due to the prevailing norms and current market situations in the country and globally, all the firms, despite the nature of business or area of incorporation, should follow certain compliance requirements also. The validity or the renewal of the permit and the trade license depends solely on the correct following of all such requirements.
All the compliance requirements like, AML, ESR, UBO, Accounting and Audited financials etc. need to be fulfilled to have the normal functioning of the business along with the valid trade license. The yearly renewal of the same has thus become not only mandatory by the law but also a requisite of existence. All companies/business should be renewed yearly for the hassle-free working of the company.
Nex Consultants, with the expertise in this field will be able to assist you in this regard. All the required rules and regulations are familiar with our experts and the necessary supporting compliance can be rendered under a single roof.
FREQUENTLY ASKED QUESTIONS ON CORPORATE COMPLIANCE REQUIREMENTS IN UAE
What are mandatory compliance requirements in the United Arab Emirates (UAE)?
Mandatory compliance requirements in the UAE refer to the legal obligations that companies must meet to comply with local laws and regulations. These requirements include compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, data protection laws, auditing and tax regulations.
What are the AML and CTF compliance requirements in the UAE?
AML and CTF compliance requirements in the UAE include conducting customer due diligence (CDD) measures, monitoring transactions, reporting suspicious activities, and maintaining accurate records. Covered entities must also establish internal controls and procedures to ensure compliance with these regulations.
What are the data protection compliance requirements in the UAE?
The UAE Cabinet issued the Federal Law No. 2 of 2019 on the Protection of Personal Data (DPL) that came into effect on July 1, 2020, which obligates businesses to respect and protect the privacy rights of individuals while processing their personal data. This includes obtaining the prior consent of individuals before processing their personal data, implementing adequate data security measures, and providing individuals with access to their personal data.
What are the tax compliance requirements in the UAE?
The UAE implemented a Value Added Tax (VAT) system in 2018, which requires businesses to register for VAT if their annual turnover exceeds AED 375,000. VAT-registered businesses must charge VAT on their taxable supplies and file VAT returns with the Federal Tax Authority (FTA) in a timely manner. Taxable businesses must maintain complete and accurate records of their transactions to facilitate proper VAT compliance.
What are the penalties for non-compliance with mandatory compliance requirements in the UAE?
Non-compliance with mandatory compliance requirements in the UAE can result in significant penalties, including fines, license suspension or revocation, and criminal prosecution. The UAE’s regulatory authorities closely monitor compliance with these regulations and take stringent measures to ensure that all covered entities comply with them.
Can companies outsource their compliance obligations to third-party service providers?
Companies can outsource their compliance obligations to third-party service providers, subject to certain conditions. The service provider must have appropriate qualifications, experience, and resources to maintain an accurate record and meet regulatory requirements. However, the ultimate responsibility for compliance always rests with the company.
What is corporate compliance, and why is it important in Dubai?
Corporate compliance refers to the set of procedures and policies that organizations follow to ensure that they are operating within the bounds of the law and regulations, as well as adhering to ethical and social standards. It is essential in Dubai because the city has a robust legal system that closely regulates businesses, and non-compliance can result in significant penalties or even revocation of business licenses.
What are the corporate compliance services offered in Dubai?
Corporate compliance services in Dubai include company registration, regulatory compliance, corporate governance advisory, anti-money laundering compliance, and compliance program development. These services aim to ensure that businesses are operating in compliance with various laws and regulations, such as tax laws, labor laws, and regulations governing the business sector.
What is the role of a corporate compliance officer in Dubai?
A corporate compliance officer (CCO) is responsible for overseeing the organization’s compliance with various regulations and ensuring that all operational aspects of the entity comply with both internal and external policies. In Dubai, CCOs play a crucial role in ensuring that companies avoid non-compliance with local laws and regulations and identify and mitigate any potential compliance risks.
How important is it to maintain compliance and proper records in Dubai?
It’s essential to maintain compliance and proper records in Dubai because the UAE regulatory frameworks expect companies to have accurate and complete documentation of their business activities. Non-compliance or inadequate record-keeping can result in hefty fines, penalties, and reputational damage.
What are the penalties for non-compliance in Dubai?
The penalties for non-compliance in Dubai vary depending on the magnitude of the impact and the type of violation. Penalties can include administrative fines, suspension of business operations, license revocation, and even criminal implications. The amount of penalties ranges from small fines to substantial amounts depending on the regulation in question.
Can a business outsource its compliance services in Dubai, and is it a good idea?
Yes, businesses in Dubai can outsource their compliance services to third-party providers, and it is a wise idea for many companies. Outsourcing compliance services can help businesses save time, money, and resources by ensuring that their operations themselves remain compliant while benefiting from the specialized expertise of compliance experts. Furthermore, outsourcing allows organizations to focus on their core business and strategic initiatives.
