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Compliance After Company Set Up In Dubai: A Complete Guide

Compliance After Company Set Up In Dubai A Complete Guide

Businesses in Dubai need to adhere to requirements of compliance after company set up in Dubai. Company formation in Dubai can be done smoothly during the present era because of its rapid business growth, and it also provides a business-friendly environment. Businesses are possible due to 100% foreign ownership, tax savings, ease of business, luxury business infrastructure, and growing business opportunities among foreign investors. Entrepreneurs have a variety of business licenses and activities available to choose from to suit their business needs. Moreover, there are options as to the type of business one can set up in Dubai, i.e., onshore, offshore, or free zones.

Benefits of Compliance after company set up in Dubai

The benefits of compliance after the company set up in Dubai are as follows:

1. Ease of Business Setup

Company formation in Dubai is just a few taps away due to the developing technology and facilities provided in the country. Therefore, the process is straightforward and requires less paperwork. 

2. No Taxation

Another advantage of company formation in Dubai is that the person need not pay any taxes. The country provides a complete exemption from tax payment. However, certain companies may have to pay VAT based on the type of business involved. 

3. Ample free zones

There are more than 20 free zones in Dubai, which gives the person the option to set up his or her business either in the offshore, onshore or free zone.  

4. Development in the field of technology

There is a massive development in technologies. Dubai is always prepared to meet future needs, and this is an opportunity for entrepreneurs to take their business to a new level.

5. Hub for connecting various businesses.

Company formation in Dubai is profitable because this country is a hub for connecting different businesses and connects them like a bridge, i.e., connects manufacturers, producers, and suppliers of significant goods worldwide. 

6. Better Infrastructure

There should be proper infrastructure to help the business smoothly conduct business—for example, a better public transport system, telecommunication facilities, airports, metro, and many more. The Dubai expo 2020 has helped develop the infrastructure to be more advanced. 

7. Better lifestyle:

The country has people from diverse cultures, ethnicities, religions, and countries. Therefore, it requires people to learn and respect people from different backgrounds. It also helps them to maintain good relationships with each other. 

8. Simple process for Visa

When a person starts his or her company in Dubai, the person quickly gets a visa. It is received once the individual follows the procedure mentioned below. 

What are the requirements for compliance after company set up in Dubai?

The following are the specific vital requirements of compliance after company set up in Dubai:

Company regulations in Dubai

The local or foreign investor should adhere to and acknowledge the Company law regulations in Dubai. In addition, the documents (as mentioned below) required for the particular business the investor wishes to pursue should be prepared.

Labour and employment regulations

Labour laws were amended in September 2019, and it has made the following changes in its labour law:

  • Introduction of various provisions related to anti-discrimination at the workplace.
  • Amended provisions that have differential treatment for male & female employees.

Taxation

The authority regulating tax compliance in Dubai is called the Federal Tax Authority or FTA. Dubai is known for having a meagre rate of 5% VAT. Therefore, a business must register for VAT once it crosses the threshold limit. It is one of the requirements of compliance after the company set up in Dubai. The company should also file the returns on a quarterly or monthly basis, depending on the company’s income. Moreover, Dubai does not have any corporate tax or income tax.

Statutory Audit

The government makes statutory audits mandatory as part of compliance after company set up in Dubai. For onshore companies, it is a requirement to conduct an audit every year, but they are not required to submit the audit report to any government authority.

In the free zone, it is required to submit the audit to the concerned authority before the license renewal. Therefore, it is advisable always to hire a reputed audit firm to conduct the audit matters of the company.

Economic Substance Regulations (ESR)

ERS is a new concept of compliance after the company set up in Dubai implemented in Dubai in 2020. It applies to all onshore and free zone companies in Dubai involved in the following relevant activity. ESR needs to be submitted at the end of every financial year. Relevant activity is:

  • Banking business
  • Insurance business
  • Investment fund management business
  • Lease-finance business
  • Headquarter business
  • Shipping business
  • Holding company business
  • Intellectual property business

AML/CFT

This concept is implemented as compliance after the company set up in Dubai to stop criminals and terrorists from abusing the financial system. Anti-Money Laundering and Counter Finance Terrorism regulations in Dubai must be strictly complied with, or else strict fines and punishment shall be imposed on the wrongdoer. Most of the compliance procedures will be taken care of by the concerned banks themselves through the KYC[1] procedure. However, the businesses that conduct the following activities need to register with GoAML to make sure that they report suspicious transactions.

Certain activities

  1. Broker and real estate agents
  2. Dealers of precious metals and stones
  3. Independent accountants
  4. Providers of corporate service

Maintain UBO and Shareholder register

The company should maintain the ultimate beneficial owner (UBO) and shareholder register as part of compliance after the company set up in Dubai. The record should be submitted to the concerned authorities. They must be informed if there are any changes in the shareholder or UBO information.

Essential Documents for company formation in Dubai

The necessary documents for Company formation in Dubai are as follows: 

  • Application of Pre-approval form (It can be done online)
  • Notarised Passport copies of shareholders and the directors of the company
  • Dubai Resident permit (residence visa) 
  • Copy of Emirates’ ID (if necessary)
  • Proof of residential address (electricity bill or bank statement)
  • Copies of parent company documents: (Required if a subsidiary company is being established in Dubai)
  • Approvals of Third-party (for certain regulated business activities)
  • MOA/AOA of the company

Conclusion

Dubai is known for its rapid growth in the business field, and their compliance requirement differs from time to time. Moreover, the business requirement for each type of business differs. The investor has to make sure that the compliance after company set up for a particular business is fulfilled. You can contact Bizadvisors for any clarification.

Read our article:Company Registration in USA : A Complete Process

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