The United Arab Emirates (UAE) is the place to be when it comes to setting up a business due to the booming business environment. However, what most businesses do not realise is that the post-incorporation requirements are key and an ongoing process.
This blog is a breakdown of what you need to do right after getting your business registered in the UAE. From opening a corporate bank account to abiding by the tax laws, we will detail all the information and tools you require to ensure a smooth transition into the UAE’s prosperous business environment.
Considerations For Post-Incorporation in the UAE
It is key to fulfill the post-incorporation requirements to ensure a business is complying with the UAE laws and regulations and unlock the full potential that the UAE market has to offer. The below list of post-incorporation requirements will make a great difference to your business operations and make your business operations smoother and more efficient.
There are certain post-incorporation requirements that must be met for your business to be fully compliant with the UAE laws and regulations and to be able to fully utilise the potential the UAE market has for you. Some of them are as follows:
1. Opening a corporate bank account
Most of the local UAE banks, as well as international bank branches, offer commercial banking services in the UAE. The Federal Law No. 10 of 1980 controls the public shareholding corporations that hold the local bank license.
Opening a corporate bank account would require documentation regarding a local address for your company, such as Ejari, which is a copy of the lease for the business property and the most recent utility bill copy of the business property. Other requirements include personal and company documents and any other document that proves your residence in the UAE.
The type of bank you are going to choose will determine the requirement of the average monthly balance. In Dubai and the UAE, opening and maintaining corporate accounts often involves a first deposit requirement, which may range from NIL to AED 500,000 or more.
2. Visas
This is particularly important if you plan to hire employees. Once you hire them, a UAE resident visa is required for any foreign national who wishes to reside and work in the UAE. To apply for visas under the company, once the company is registered, an application for the company labour and immigration/establishment card must be completed. Note that the size of the office, together with a few business facilities, is commonly related to the number of visas the company can offer. Thus, in some cases, the more visas the company requires, the larger the office space is needed.
3. Wage Protection System (WPS)
Introduced in 2009, the Wage Protection System is an electronic salary transfer system WPS in the UAE guarantees that workers receive the correct wages or salaries as per the employment contract and on time.
It is thereby compulsory that a private sector company in the UAE is registered with WPS and remit the salaries in line with the regulations. The MOHRE and the Central Bank of the UAE oversee the details of the employees and salary declared therein. Non-compliances to WPS may attract penalties.
4. Compliance
The UAE has implemented compliance laws aimed at the effective and ethical running of business, and all businesses in the country must abide by them. Some of them are as below:
- The Ultimate Beneficiary Owner (UBO)
- Economic Substance Regulations (ESR)
- Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT)
By doing so, the UAE wants to make sure that business owners abide by the regulations, which comply with global norms. Businesses not complying with the regulations may face penalties and fines.
5. VAT Registration
A company must register for Value Added Tax (VAT) if the total amount of its taxable imports and supplies during the preceding 12 months exceeds AED 375,000. On successful registration, the business would receive a Tax Registration Number (TRN) from the Federal Tax Authority (FTA).
Any business may apply for voluntary VAT registration in case the supplies and imports reach the voluntary registration threshold of AED 187,500.
Businesses benefit from VAT registration because only registered businesses can claim input VAT paid on their purchases and expenses, in contrast to non-registered businesses, who are end users and are not eligible to collect VAT.
Periodical filing of the corporate and VAT returns are necessary as per the timelines from FTA. VAT refunds could be requested when in positive position as per the procedures.
6. Accounting, Bookkeeping, and Audits
Bookkeeping and accounting duties are crucial for any business in the UAE. Effective financial management requires maintaining complete, accurate, and current records of all financial transactions. The primary bookkeeping and accounting duties that could be outsourced too are:
- Maintenance of books and records
- Migration of accounting system
- Historical accounting update
- Preparation of year-end audit schedules
- Preparation of budgets and variance analysis
- Forecasts of cash flow
7. Human Resource (HR)
Outsourcing HR is a better way to manage your load. HR tasks that can be outsourced include, but are not limited to:
- Recruiting and shortlisting
- Drafting contracts and letters of employment offers
- Labour and employment law compliance
- Employee onboarding
- Payroll (WPS) service administration
- Workplace safety and risk
- Employee performance review
Conclusion
It is vital to remember that successfully running a business in the UAE goes beyond just registration. There are many ongoing requirements to ensure you stay compliant with the laws and your company runs smoothly.
For all your post-incorporation needs, Gatestone Group can be your one-stop solution on legalities, finance management, and opening your corporate banking account in the UAE. Leave the complex issues of setting up, running, and achieving your aims regarding business ventures in the UAE to Gatestone Group. You can contact our specialised team at [email protected] or call on +971 4 450 1023 or +971 52 410 0849 for a free-of-cost consultation for guaranteed compliance and getting your company up and running efficiently.
