Compliance & Regulatory Services
Compliance & Regulatory Services
Businesses in a well-informed environment can mitigate the risk of legal and regulatory non compliances and thus avoid financial and reputational laws.
The UAE has several regulations in place for smooth and fair conducting of businesses. A responsible entrepreneur is obliged to comply with laws that
- Govern one’s business
- Protect labour rights, consumer rights and intellectual property rights
- Protect health and environment and ensure safety
- Govern the free zone in which the business is set up in.
Recent developments in the economy with regulatory requirements for compliance, AML framework and such have demonstrated increased need for maintaining an adequate compliance infrastructure for most organizations.
We at MBM ensure that we keep abreast with the evolving legal environment and keep our clients updated about the same. We support our clients in designing and implementing appropriate processes, policies and procedures by understanding the prerequisites in accordance with the prevailing laws.
The Regulatory framework governing a business enterprise in the UAE mainly consists of the following laws and regulations:
ECONOMIC SUBSTANCE REGULATIONS
The Economic Substance Regulations (ESR) is in line with UAE’s commitment to the international tax cooperation and transparency. The regulations require UAE's
- Onshore and
- Free zone companies and
- Other business forms
that carry out any of the 'Relevant Activities' as listed in the regulations to maintain an adequate 'economic presence' in the UAE relative to the activities they undertake (Economic substance test). Following activities are prescribed as Relevant activities as per the Regulations:
- Banking Business
- Insurance Business
- Investment Fund management Business
- Lease - Finance Business
- Headquarters Business
- Shipping Business
- Holding Company Business
- Intellectual property Business ("IP")
- Distribution and Service Centre Business
Entities that are within the scope of the Regulations are required to submit an annual Notification form to their Regulatory Authority.
Entities which earn income from relevant activities mentioned above must submit an Economic Substance Report to the Regulatory Authority within 12 months from the end of the Financial Year.
How do we assist you?
We at MBM assist you in
- Filing notification of Economic Substance and
- Economic Substance Report, if applicable, with the FTA by taking you step by step throughout whole process.
- We also assist you in correspondence with the Authorities.
COUNTRY BY COUNTRY REPORTING
Country by Country (CbC) Reporting is part of an initiative led by the Organization for Economic Co- Operation and Development (OECD) and the Group of Twenty (G20) industrialized nations.
CbCR is applicable to UAE headquartered Multinational companies with Financial Reporting years starting on or after January 1 st , 2019. Such Multinational Groups of Entities (MNEs) are required to file a CbC Report that should provide a breakdown of the Multinational Group’s
- Global revenue
- Profit before tax
- Income tax accrued and
- Some other indicators of economic activities
For each jurisdiction in which the MNE operates.
The purpose of CbC Reporting is to eliminate any gap in information between the taxpayers and tax administrations.
What will the information provided on a CbC Report be used for?
- To assess high-level transfer pricing risk;
- To assess other BEPS-related risks; and
- For economic and statistical analysis.
We at MBM with our professional experience and expertise assist you in complying with all the Regulatory requirements and also keep you updated about the amendments from time to time.
ULTIMATE BENEFICIARY OWNER REGULATIONS (UBO)
All UAE companies, whether considered “onshore” or “offshore”, must comply with the reporting obligations under the UBO Regulations. This reporting is directly to the authority that the company is registered under. It should be noted that the Regulations do not apply to companies that are directly or indirectly wholly owned by the federal or local government or their subsidiaries. In addition, DIFC and ADGM registered companies remain unaffected by the new regulations.
The objective of the Regulations is to regulate the requirement for corporate entities to maintain registers listing (i) the UBOs, (ii) the partners or shareholders of a company and (iii) where applicable, nominee directors.
Under the new UBO regulations, a company must prepare and maintain
- a UBO Register
- Register of Nominee Director / Manager
- Register of Partner / Shareholder
Companies are also required to file this information with the respective regulator/licensing authority within 60 days from the date of publication of these regulations (i.e. by 27 th October 2020) or within 60 days from date of registration of company.
Companies must make sure that the Registers are maintained and updated, and that any change to the information listed therein is reported to the competent licensing authority within 15 days.
UBO
Ultimate beneficial Owner is
- Any natural person who ultimately own or control or have the right to vote with minimum 25% shareholding of the company, whether through direct or indirect ownership or who have the right to appoint or dismiss majority of the Directors / Managers.
- Where no such natural person is identified, then any natural person who exercises control over the company through other means shall be deemed as the UBO.
- If no natural person satisfies any of the conditions above, then a natural person who is responsible for the senior management of the company will be deemed as the UBO.
INTERNAL CONTROLLER FOR INSURANCE BROKING COMPANIES
The internal controller’s efforts are focused on the most critical and important areas of the company. Insurance brokerage is one of the most required companies to implement internal control and auditing procedures for the purpose of providing effective services and results based on a strong qualitative service delivery system.
An insurance brokerage company also seeks effective ways to ensure sound decision, minimize manipulation, embezzlement, fraud and all the risks encountered by insurance brokers.
This is where the Internal controller’s role becomes significant. Internal controller ensures that the insurance broking company is in compliant with the laws, regulations, instructions, and decisions issued in the State in general and by the Insurance Authority in particular, in respect of certain fields of insurance activity.
He is also responsible for providing information, data and documents required by the Insurance Regulatory Authority in respect of those areas.
The internal control of the technical departments’ performance in the insurance brokerage companies is one of the most important aspects that the Internal Controller follows up. It includes reviewing the performance of all departments related to technical works in insurance brokerage.
To sum up, an Internal controller does the following functions:
- A periodic review of the company's implementation of the decisions and directions of the Insurance Authority which stipulate the obligations of the brokerage company towards the Insurance Authority, Insurance companies and customers.
- The Implementation of the regulations of Anti- money laundering and combating terrorist financing in insurance activities.
- Functions related to the disclosures and financial and non-financial statements of the insurance brokerage company.
We assist our clients in complying with the filing requirements along with periodically updating them with the developments in the Regulatory framework.
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