Maintaining an official record of your company’s documentation is a necessary and important aspect that goes into keeping you on the right side of the law. Moreover, it plays an integral part in simplifying different internal procedures that require showing authorities the relevant documents. Most people often forget to update essential documents like outdated certificates, papers, credentials, and even expired licenses. Such circumstances can not only lead to the imposition of hefty fines and penalties, but it can also severely damage the company’s reputation.
While UAE is opening up to several businesses, every business owner should adhere to certain obligations concerning the company’s liability. Elena Schildgen is an experienced German lawyer and a certified business coach who offers her valuable insights into legal consulting for entrepreneurs with growing brands. Here is everything you must know about Dubai’s potential legal compliant laws that you cannot miss.
Documentation:
Schildgen says that organizations in the UAE are deliberately instructed to keep their company documentation in the track. The punctual annual renewal of old records and trade licenses, including contact numbers and addresses, keeps customers aware of the company’s status. They can easily check if the business has closed or continues functioning.
Moreover, updated records essentially help you avoid paying fines. They also serve as legal proof of your company’s authenticity. Schildgen also recommends that corporations consistently upgrade their records, like signed contracts, letters, performance analyses, and payment records.
Updating these records with the concerned ministries like the chamber of commerce, MOHRE, and health ministry is essential. Furthermore, making punctual timely salary payments through WPS (Wages Protection System) on MOHRE is indispensable. She also added that showing business registration and trading licenses are necessary legal shields that can save you from hefty fines. To avoid the fines, you can consult the compliance and licensing mentoring.
Accounts and Bookkeeping:
Companies in the UAE must ensure that they are storing accounts and books in congruence with international standards and UAE commercial transactions law, specifically since the establishment of ESR and VAT.
According to Articles 31 and 39 of CTL, every record of the respective company should be operated and supported for over a minimum of 5 years. Additionally, adhering to the maintenance of updated documentation, including bank accounts, is vital for proceeding with internal business aspects. It also acts as evidence for unfortunate yet potential bankruptcy proceedings.
Furthermore, inspections to check VAT regulations’ compliance will not be a source of worry if you ensure up-to-date documentation.
VAT and Economic Substance registrations:
Companies that report an annual turnover of AED 375,000 and above must mandatorily register for VAT and obtain a tax registration number from the Ministry of Finance.
Companies that attain a turnover below this given threshold may not have the chance to register for VAT, added Schildgen. That being said, right after the government-prescribed total is gained in the preceding 12 months or is believed to be attained within the upcoming 30 days, organizations are liable for registration.
Registered companies may report a fall in their annual turnover during the 12 months after their registration process with the federal tax authority. If the turnover falls below AED 187,500, these companies should apply for VAT deregistration.
In a nutshell, every company registered in the UAE is required to continually keep track of their turnover and apply for registration and deregistration, accordingly.
Data Protection and GDPR rules:
Schildgen further explains that there is no individual law about data protection in the UAE. However, you are required to look into specific considerations. One of these mandatory considerations is the HR perspective. This context might legally bind you to the UAE penal code. Violations involve the misuse of data and information and restriction of disclosure regarding corporation confidentialities.
Several sections of data protection laws applicable in the free zones also apply to data breach cases involving local authorities. Both Abu Dhabi Global Market and DIFC regulate the process of data protection regime, chiefly to maintain standards on par with the European data protection directives.
Every organization is primarily registered in the UAE, but running businesses in other countries of the world must ensure that they comply with the GDPR rules. Thus, following the general data protection regulation rules can play an imperative role in maintaining your company’s integrity. Schildgen recommends analyzing these rules to determine the exact extent of these rules’ impact on a business. Get advise on legal and regulatory consulting and mentoring that ensure you remain on the right side of UAE laws and regulations.
