As the preferred business setup consultant in Dubai, most of the questions that new entrepreneurs ask us after business setup surround the topic of compliance. More specifically, what are the Compliance Requirements After Registering Business in Dubai. This blog serves to answer all of the questions you might have about ensuring compliance after Registering your Business in Dubai.
Compliance After Registering Your Business in Dubai
Entrepreneurs often find themselves asking the following questions:
- What does compliance entail?
- How can I ensure my business is operating within the legal framework?
From tax registration, annual audits, or more specialized regulations like Economic Substance Reporting (ESR) and Anti-Money Laundering (AML) measures, you must have a good understanding of the steps involved to maintain full compliance in Dubai. Compliance Requirements After Registering Business in Dubai are designed to build a professional environment, support fair practices, and align businesses with the city’s standards of international business
One of the reasons why businesses in Dubai and the broader UAE see a lot of growth is because of the professional work environment present here. Therefore, the business laws too are on par with international standards, as Dubai is a hub for global commerce. Failure to adhere to these laws when conducting business could result in significant fines. While every business has its own set of Compliance Requirements After Registering Business in Dubai, we have put together a more generalized list below. In this guide, we address essential areas of compliance for companies in Dubai, helping you establish a secure foundation for growth while avoiding legal setbacks.
Tax compliance in Dubai
The authority tasked with regulating tax compliance in the UAE is the Federal Tax Authority (FTA). VAT rates are quite low in Dubai, at only 5%. When a business crosses the set VAT threshold, which is income-based, they must then register for VAT. VAT returns need to be filed on a quarterly or monthly basis, depending on performance. For now, there is no corporate tax or income tax in the UAE.
Are Audits Needed For a Company in Dubai?
Mainland companies must conduct an audit on a yearly basis, even though such audits do not need to be submitted to any common authority. In the case of free zones, most of them require an audit report to be submitted before the license renewal. It is advisable to hire a reputable firm to complete the annual audit; reach out to SetHub if you need help with this. Seeing that the compliance standards of the UAE are reaching international levels, it may soon be required for audit reports to be submitted to Government Authorities.
What is the ESR Compliance Requirement in Dubai?
The UAE implemented its Economic Substance Regulation in 2020. Accordingly, all license holders who conduct activities that are relevant to it must submit a notification to the UAE Ministry of Finance six months after the end of the financial year. The Economic Substance report must follow 12 months after the financial year ends.
The following activities are considered as relevant activities:
- Banking
- Insurance
- Investment Fund Management
- Lease Finance
- Headquarters
- Shipping
- Holding Companies
- Intellectual Property, and Distribution and Service Centres
What are the AML and CFT Requirements in Dubai?
The UAE has a framework for Anti-Money Laundering and Counter Financing of Terrorism. As a business operating in Dubai, you need to comply with these regulations. Your company bank will take care of most of these requirements during the KYC phase of account opening. However, if your business conducts the below activities, you will need to register with GoAML and report suspicious transactions:
- Brokers and Real Estate Agents
- Dealers in Precious Metals and Stones
- Independent Accountants
- Corporate Service Providers
The goAML (Global Operational Analysis and Monitoring System) was developed by the United Nations Office on Drugs and Crime (UNODC). Businesses use this system to report suspicious financial activities that may be related to money laundering and terrorist financing. Used by financial institutions, regulatory authorities, and businesses in specific sectors, goAML paves the way for reporting and analysis of transactions that could be linked to such illegal activities.
What are the UBO submission requirements in the UAE?
In the UAE, companies must submit Ultimate Beneficial Ownership (UBO) information to relevant authorities. You must disclose the details of individuals who have significant ownership or control over the business.
This requirement increases transparency, prevents fraud, and helps combat money laundering by identifying those who benefit from the company’s operations. Beyond the initial submission, companies are responsible for updating the authorities if there are any changes in shareholder or UBO details.
Depending on the regulatory body overseeing your business, the format and frequency of these submissions may vary. Failure to comply with UBO requirements can lead to fines, legal consequences, and reputational risks. Ensuring accurate and up-to-date records demonstrates your commitment to compliance and strengthens trust with both regulators and clients.
In Conclusion
We hope this article gives you a clearer picture of the Compliance Requirements After Registering Business in Dubai. This list is not exhaustive and does not cover all the compliance requirements as they may change depending on your business activity. Do your due diligence to find out more about what specifically may apply to you. Always keep in mind that compliance with UAE laws and regulations is essential for you to do business in Dubai without facing any legal issues. Ensuring compliance doesn’t only prevent fines and penalties but also strengthens your business’s reputation and positions it for long-term success in the UAE.
How Can SetHub Help?
If you are having any trouble figuring out what compliance requirements may apply to you, reach out to one of our experts here at SetHub. We have assisted numerous businesses in getting up and running in Dubai, so we are well-versed about the specifics that apply to a multitude of business activities.
At SetHub, we understand the intricacies of compliance across various sectors, and we’re here to help you navigate each requirement with ease. Whether you need help with annual audits, VAT registration, or ESR compliance, our experts are a call away to keep your business on track. Reach out to SetHub today, and focus on growing your business with peace of mind.
