Obligations for companies once they have a Trade License in Abu Dhabi
5th March 2015, Updated 11th December 2018
Entering a new market is exciting and challenging as businesses identify opportunities to expand and/or diversify. Emphasis is always put onto the correct legal structure and the requirements to obtain the trade License; however, what are the company's ongoing obligations after they've set up in Abu Dhabi?
To employ staff, a new company will need to register with Immigration and the Ministry of Human Resources and Emiratization (MOHRE). It can then sponsor expatriate staff visas. It is important that staff don't work without a visa - for your protection and theirs - to avoid penalties. Additionally, as part of the Abu Dhabi visa process, it is a requirement for companies to provide medical insurance via a registered Abu Dhabi insurance provider.
It is mandatory for employees' payroll to be processed through the Wages Protection System (WPS) for onshore companies in the UAE. This is a federal payroll system introduced by the government in 2009 to ensure that all workers registered with MOHRE are paid each month. Companies not complying face fines and getting 'blocked' meaning they can't effect any future visa changes until such time that WPS is processed.
Trade License renewal
All companies need to renew their Trade License on an annual basis. Some industries with special approvals will issue extra licenses which will also require renewing, such as training companies registered with the approval body, ACTVET, will have to renew their ACTVET license in addition to their Trade License. Construction and engineering companies are required to renew their Classification registration every two years.
Ministry of Economy registration renewal
Foreign Branch Offices and Representative Offices (Rep Offices) are required to renew their registration with the Ministry of Economy (MOE) in order to be able to renew their Trade License. The current fee for this is AED10,000 per annum. Failure to renew on time will incur a fee of AED1,000/month for each each month that it remains un-renewed up to a maximum of AED10,000.
Government Departments Updates
At the time of trade license renewal, it is also necessary to renew any registrations a company might have with any additional government departments, such as Immigration, MOHRE, Civil Defense and Tadweer. As mentioned above, further licenses, driven by the activities will also need to be renewed. Failure to manage these update is likely to prevent the company from processing further visas.
Accounting and Auditing
It is a requirement that all companies maintain accounts to international standards and get an annual audit. Limited Liability Companies (LLCs) and Establishments are required to disclose their annual revenues are part of the trade license renewal. Foreign Branches and Rep Offices are required to submit their annual audit to the Ministry of Economy as part of their annual re-registration process. The audit needs to be in Arab and should be done by a locally-registered auditor.
It is necessary to retain a commercial premise which meets the requirements of the activity on the Trade License. A valid Tawtheeq lease agreement is required at all times and would usually be renewed annually and is required as part of the documentation for the Trade License renewal. (Entrepreneurs with Tajer Abu Dhabi licenses are exempt from requiring premises for the first two years of operations.)
Companies maintaining a PO BOX need to ensure it is renewed annually before 31st January each year to avoid fines accruing on a monthly basis.
In general, failure to renew licenses and registrations usually results in fines which accrue on a monthly basis, so be prepared and renew in time.
How Gateway Group can help with your organisations's PRO services
Gateway's concierge PRO services help companies to stay compliant by managing their government transactions, such as business setup, visas processing, trade license renewals and permit applications. Never over look an expiry date again. For assistance with your UAE Employment contracts and visas email us info@GatewayToUAE.com
Written by Jenny Hunt, Founding Partner & CEO
Gateway Group Of Companies, Abu Dhabi & Dubai UAE
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