Compliance Advisory in the UAE

Compliance advisory in the UAE means professional guidance across the range of regulatory obligations that affect businesses operating in the country.

Since the introduction of corporate tax in 2023, the scope of compliance has expanded significantly. Most companies now face obligations across multiple frameworks: corporate tax registration and filing, VAT compliance, Economic Substance Regulations (for companies with relevant activities), anti-money laundering requirements (for designated businesses), Ultimate Beneficial Owner declarations, labor and employment law, and in some cases data protection and corporate governance standards.

Compliance advisory is proactive. It identifies gaps before they become penalties, builds frameworks and policies that support ongoing compliance, and monitors regulatory changes so your business stays current.

Compliance obligations affect every UAE business, but the scope varies:

• All businesses subject to corporate tax need to ensure CT registration, filing, and record-keeping are in order
• Businesses approaching or above VAT thresholds need registration and filing compliance
• Free zone companies with relevant activities under ESR need notification and reporting compliance
• Designated non-financial businesses and professions (DNFBPs) face specific AML compliance obligations
• All UAE companies must comply with UBO declaration requirements
• Companies with employees face labor law, WPS payroll, and employment regulation compliance
• Companies preparing for growth or investment benefit from governance frameworks

If you operate across multiple compliance areas - which most UAE businesses do - an integrated approach is more efficient and reliable.

Step 1: Compliance assessment and gap analysis. The advisor reviews your current compliance position across all relevant regulatory areas. This identifies gaps and where exposure is highest.

Step 2: Framework and policy development. Based on the assessment, the advisor helps develop or improve your compliance framework - policies, procedures, internal controls, and documentation standards.

Step 3: Ongoing monitoring and support. Compliance is not a one-time project. Ongoing advisory ensures your framework stays current as regulations change and your business evolves.

Economic Substance Regulations (ESR) apply to UAE entities that conduct certain relevant activities. There are nine categories of relevant activities, including banking, insurance, fund management, lease-finance, headquarters, shipping, holding company, intellectual property, and distribution and service centre business.

Companies with relevant activities must:

• File an annual ESR notification with the Ministry of Finance
• If they conduct relevant activities, file an annual ESR report demonstrating adequate economic substance
• Maintain adequate substance - employees, expenditure, and premises proportionate to the activities

The ESR substance requirements overlap with corporate tax QFZP substance requirements for free zone companies. Businesses subject to both should assess substance holistically.

Note: ESR rules continue to evolve alongside the corporate tax framework. Confirm current requirements with a compliance professional.

While formal corporate governance codes primarily apply to listed companies and regulated entities, good governance practices benefit businesses of all sizes.

Governance basics for UAE companies include:

• Clear board responsibilities and decision-making frameworks
• Documented management authorities and delegation
• Internal controls for financial reporting and operational processes
• Risk identification and management processes
• Conflict of interest policies
• Shareholder communication and rights management

For private companies and family businesses, governance becomes particularly important during growth transitions, ownership changes, or when seeking external investment.