Companies established in the Dubai International Financial Centre are expected to implement and maintain a robust corporate governance framework.
The new implementing regulations on AML following Cabinet Decision No. (10) of 2019 will also have effects on the obligations of companies setup in the DIFC. A UAE Economic Substance Law is also imminent, which may place additional requirements on companies that wish to claim tax relief under existing Double Taxation Avoidance Agreements.
Basic corporate governance For DIFC Companies
At a minimum, corporate governance for DIFC companies involves compliance with the rules that are applicable to a company, both from external agencies (licensing bodies) and internally (Memorandum and Articles of Association) as well. Well-documented corporate governance processes, coupled with adherence to recommended best-practices, allows for the company’s management to maintain a good relationship with internal and external stakeholders.
This is even more relevant to startups, that seek funding at various stages of their business. Investors give high importance to robust internal processes, backed by sound management, for these serve as basic building blocks to well-performing businesses.
Non-regulated businesses in the DIFC
Senior Management
Resident Directors – not required
Resident Manager – not required, but preferred where visas are to be applied in the name of the company, and for bank account operations.
Resident Secretary – not required
The company secretarial service can be outsourced as well. Contact us for a quote.
Board Meetings
Not required. We recommend a meeting of the Board at least once every quarter.
Shareholder meetings
Not required. We recommend holding an Annual General Meeting, as good corporate practice. The management/audited accounts can be tabled at the AGM.
License
The company license is renewable annually, and due on the anniversary of license issuance.
Establishment Card
The establishment card is renewable annually, and due on the anniversary of issuance.
Residence Visas
Renewable every three years. The medical test will have to be undertaken again.
Maintaining Books of Accounts
This is required. The accounts have to be submitted to the DIFC Registrar of Companies (ROC) within six months of the end of the company’s financial year.
Audited Accounts
This is required for companies that have an annual turnover in excess of US$ 5 million, or more than 20 shareholders. There are exemptions for certain corporate vehicles. The audited accounts have to be filed with the DIFC ROC within 30 days after circulation to shareholders.
Banks
Mandatory submission of renewed license annually.
Annual Return
It is mandatory to maintain records of corporate changes in the company, and submit the annual return to the DIFC ROC, as part of the license renewal process.
Corporate Registers
All statutory corporate registers have to be maintained on a continual basis. These include :
- Register of Shareholders
- Register of Directors
- Register of Charges
- Register of Board Minutes
- UBO Register
Data Protection
The DIFC Company has to register with the Commissioner of Data Protection at the time of licensing, and renew this registration on an annual basis.
VAT Returns
Mandatory for all qualifying companies. In practice, the returns are currently submitted quarterly, and due by the 28th day following the end of the tax period. In addition to this, any material corporate changes (e.g. licensed activities, authorised signatories) should be updated within 20 days of the date of occurrence.
Would you like to maintain your statutory compliances at a lower cost? Consider outsourced company secretarial services. Contact us today to get a quote.
CONTACT