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Annual Financial Compliance Checklist in Dubai

annual financial compliance in dubai
Table of Contents

Businesses, after the successful setup, business incorporation and once the license is issued in Dubai, are required to conduct an annual self-assessment. This will help them evaluate if they meet the financial regulation criteria in Dubai or not.

In case, if businesses fail to comply with the mandatory regulations in UAE, they may be liable for penalties or risk suspension of their business. However, a business financial consult in Dubai like Avyanco can help you meet your business needs effectively.

What are Financial Compliances in Dubai?

Investors have to file mandatory financial compliances. Annual Financial Compliances includes:

  • VAT
  • ESR
  • External Audit
  • AML / CFT
  • UBO

Therefore, each year a company must renew its certification such as:

Annual Compliance Checklist

  • Value Added Tax (VAT)

Value Added Tax (VAT) – introduced on 1 January 2018, in the UAE, will provide Dubai, UAE with a new source of income and help generate a sound revenue eventually. The rate of VAT is 5 per cent in UAE. All companies operating in Dubai have to register for Value Added Tax (VAT). Companies may opt for any option including:

  • Mandatory registration – taxable supplies and import 375,000 AED.
  • Voluntary registration – taxable supplies and import 187,599 AED.

Compliance Requirement

Quarterly return filing.

  • Economic Substance Regulations (ESR)

Economic Substance Regulation or ESR is one of the most talked and discussed topics in the business world in Dubai, UAE. The ESR was implemented on 1st January 2019. The ESR has categorized businesses into licensee and exempted licensee, which helps examine a business’s ESR obligations. Licenses and exempted licensees are required to file the ESR for the annual financial compliance. In addition, to that, the categorization is based on the nine relevant activities. Thus, the businesses have to evaluate whether they have been into relevant activity before filling the ESR notification and report.

All businesses in Dubai that conduct a relevant activity have to file for ESR.

Compliance Requirement

Notification filing and report submitting annually.

Activities Fall Under ESR in Dubai, UAE

Certain activities fall under ESR and businesses that are involved in operating those activities have to file for Economic Substance Regulations (ESR). A financial expert like Avyanco has helped thousands of businesses with their ESR compliance matters effectively. Businesses who want sound advice on any ESR related matter in Dubai, UAE can contact Avyanco to better meet their business requirements.

If a business fails to comply with the ESR regulations, it may be liable for penalty or risk suspension of its company.

What are the ESR Penalties in Dubai?

Companies that fail to submit an ESR notification will be liable to pay penalties of AED 20,000. In addition, the penalty of AED 50,000 is for those businesses that fail to submit the ESR report to the concerned department in UAE. Business – in case the violation is concerned with another year, have to pay AED 400,000 as an administrative penalty.

  • External Audit

All companies and the selected Free Zone businesses are applicable for External Audit in Dubai, UAE.

Compliance Requirement

Annual external audit of Financial Statement and Report submission to banks and regulators include:

  • Profit and loss account
  • Balance sheet
  • Trial balance
  • Cash flow statement

Specific Trading Companies Compliances

There are specific renewals each trading company has to follow:

  • Custom code renewal
  • Business license renewal
  • Immigration card renewal
  • Visa renewal (Expired)

External Audit refers to the 3rd party evaluation and verification of books of accounts and other relevant records of the business. This will provide the auditor important information to analyze whether the accounts are properly maintained and comply with essential accounting, statutory or financial reporting and auditing standards.

  • AML

Each company in Dubai have to meet AML compliances as per UAE regulations. A financial consultant has to evaluate whether your business meets AML compliance procedures.

  • Check Due Diligence

The CDD precisely establishes the following requirements while verifying the identity,

  1. Personal information of a customer including the name, date of birth, and address
  2. A company’s beneficial ownership where the owner is neither the client nor a customer.
  3. Business’s nature where the customer is fully involved.

Compliance Requirement

Monthly/ quarterly/ half-yearly/ yearly

What are the AML Penalties in Dubai?

The penalty for attempted money laundering or money laundering is a fine of between 100,000 dirhams and 5 million dirhams, or both or imprisonment for up to 10 years in Dubai, UAE.

  • UBO Compliance

Ultimate Beneficial Owner or UBO has to be filed every year with the concerned authority where a company license was issued – if a company license is issued in a Free Zone or Mainland then UBO has to be filed with that authority.

Compliance Requirement


What are the UBO Penalties in Dubai?

Businesses that fail to submit the details of UBO to the concerned authorities shall be issued a written notice in the first instance and then a fine of AED 15,000 along with a notice to rectify the non-compliance within 15 days. In case, if the company is still not rectified, the company shall pay a penalty of AED 30,000 as well as may risk license suspension for at least three months.

How Avyanco Can Help You Meet UAE Financial Compliances?

Companies have to follow the aforementioned financial compliances to avoid penalties in Dubai. Also, businesses that file the notification without the right and accurate assessment might face a higher risk of errors – thus shall pay penalties eventually.

Avyanco is the leading firm operating in Dubai, UAE – valued and trusted for providing all sized companies with quality and viable guidance related to business functions including accounts, finance, management, advisory and others…

In addition, Avyanco is all and well capable of helping you with all the compliances in the checklist that a business requires including ESR, Compliance, Reporting, and Filing in Dubai. With our years of experience and a long list of expertise, we are the solution you have been looking for.

Don’t hesitate and get in touch with us because we are the answer to all your annual financial compliance-related issues. Let us help you in your Endeavor to be compliant all in accordance with UAE regulatory landscape.

In your success lies ours, contact us now!


About the Author


Jashvantkumar Prajapati

(Founder and CEO of Avyanco Group of Companies; Business Setup Consultancy, Avyanco Tax and Accounting LLC, and Avyanco Auditing LLC.)

He keeps a varied portfolio with core expertise in investment management, corporate structuring, commercial law, business consultancy, lead management, business planning and market research. Aspire to help potential entrepreneurs and investors to come ahead and form their companies in highly emerging economies like UAE.