Economic Substance Regulations – Deadlines Announced so far

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The UAE Economic Substance Regulations (ES Regulations) require all UAE entities that fall within the scope of the regulations by carrying on a “relevant activity” as defined by the ES Regulations to comply with annual reporting obligations.

Due to the current pandemic and subsequent lockdown, several Free Zone Regulatory Authorities have extended the last date for making filings in compliance with the ES Regulations. The Free Zone Regulatory authorities that have extended the filing dates are as follows:

  • Abu Dhabi Global Market (ADGM) : The 31 March 2020 notification deadline is no longer applicable and a new deadline has not been announced yet. Guidance on the filing process is available on the ADGM website
  • Dubai Airport Freezone Authority (DAFZA) : The notification deadline is 3 May 2020. Guidance on the filing process has been shared with DAFZA licensees via email
  • Dubai International Financial Centre (DIFC) : The 31 March 2020 notification deadline is no longer applicable. A new deadline has not been announced yet; however, the DIFC stated that the notification must be filed during the second quarter of 2020 (i.e., at the latest by 30 June 2020). Guidance on the filing process is available on the DIFC website
  • Dubai Multi Commodities Centre (DMCC) : The notification deadline is 30 June 2020. Guidance on the filing process is expected during April 2020, but general ES guidance is available on the DMCC website
  • Dubai Silicon Oasis Authority (DSOA) : The notification deadline was 31 March 2020. Guidance on the filing process has been shared with DSOA licensees via email
  • Ras Al Khaimah International Corporate Centre (RAKICC) : The notification deadline is 30 June 2020. Guidance on the filing process has been shared with RAKICC licensees via email
  • Hamriyah Free Zone Authority (HFZA) : Entities that are governed by the Regulations will need to submit a notification by 30 June 2020, and where required prepare and submit to HFZA an economic substance declaration within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019.)
  • Sharjah International Airport Free Zone (SAIF): Entities incorporated under the jurisdiction of the SAIF ZONE Authority will need to submit a notification by 30 June 2020

In case you have any questions regarding your organisation’s reporting obligations or the deadline for your organisation, please contact us at mail@affiniax.com.

DMCC and DED announce 2 new Services

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Introducing New Services from DMCC in Partnership with DED

Last year, Dubai Multi Commodities Centre Authority (DMCC) – the world’s flagship Free Zone and the Department of Economic Development (DED), the entity of the Government of Dubai that regulates the economic activity of all onshore companies, signed a strategic agreement to collaborate on the licensing of companies in Dubai allowing them to operate within the Free Zone and onshore mainland.

In line with the partnership, DMCC has finally introduced the two new services that will further facilitate trade and boost economic activity in the emirate.

The services are as follows:

  • DED NOC to Operate Onshore
    DMCC member companies with specific service licence activities are now permitted to offer their services outside the Free Zone without having to incorporate another Company, provided that they obtain a no-objection certificate from DMCC first. Currently, there are more than 30 eligible service activities that would be permitted to conduct business outside its zone.
    The eligible DMCC companies can apply online for a No-Objection-Certificate (NOC) from DMCC to obtain the permit from DED. This NOC will be required to obtain the Commercial Permit to operate onshore/mainland, from DED.The NOC will be valid for 90 days from the date of issuance.
  • Dual Licence Office Permit
    DMCC member companies who wish to have their DED branch/Subsidiary or a DED Company with Common shareholder operate from the same JLT office address they occupy, can now apply for Dual Licence Office Permit subject to meeting the eligibility criteria.Eligibility criteria are as follows:

    1. Branches of DMCC Companies:
      A DMCC licensed Company occupying an office in DMCC Free Zone and having a branch in DED can apply for this permit in order to share the same unit (office) address with DED Company.
    2. Subsidiaries of DMCC Companies and Companies with Common Individual Shareholders:
      The Company may share the same unit (office) address, provided 25% common ownership is continually maintained.

The validity of the permit is one year, which will help save the cost of leasing another office for the DED licence. Leased/purchased property type must be office as per the title deed of the Unit. Sharing on any other property types such as “workshop, shop/retail, land, flat etc.” is not allowed.

Also, units within Business Centres, co-working spaces and Incubation Centres are not eligible for Dual Licence Office Permit as each Company must be allocated to a dedicated area within the unit with the minimum area size for DMCC Company being 300 sq. ft.

Retail and industrial activities are also not eligible for Dual Licence Office Permit.

To know more about the partnership and services, feel free to get in touch with one of our team members at mail@affiniax.com or call us on +971 4 425 6616.

RAS AL KHAIMAH ECONOMIC ZONE (RAKEZ) BUSINESS SECURE PACKAGE

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As part of RAKEZ’s commitment to offer a cost effective and world class economic zone, RAKEZ has introduced a Business Secure package that would help support individuals in the UAE to start afresh, embark on their entrepreneurial journey and turn the current challenges into an opportunity.

The Business Secure Package Includes:

  • 1-year license and establishment card
  • 3-year UAE visa and status change
  • Medical and Emirates ID

Plus, additional Incentives such as:

  • 25% discount on full dependent visa packages
  • 50% down payment, 50% after 6 months
  • Same renewal rate guaranteed rate for life

You can now start up your own business for as little as AED 11,535/-*.

Other business / office spring packages have been rolled out by RAKEZ as well for SME’s, entrepreneurs and startups keen to explore the market. These packages provide a choice for a shared workstation, serviced office, private office or customizable office situated in RAKEZ’s premier business zone without putting a high cost.

To know more about RAKEZ offers, please feel free to contact us at mail@affiniax.com.

*Terms and Conditions Apply!

Business Continuity

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The current global scenario has hampered the growth of the economy and stability with almost all sectors facing a decline as a result of Covid 19. Although this has only started to emerge, the extent of this will be noticed in the upcoming months. The spread of the virus is causing different impacts in each country and governments are quickly backing up to protect its citizens and limit the damage.
The decline experienced by the global financial markets indicate that the world economy could take much longer to recover and return to normalcy. The pathway to growth and the degree to which the demand will be delayed can be explained in three scenarios – described as V-U-L.

V – SHAPED

Equivalent to the classic real economy, where the shift and decline in output eventually rebounds back. In this scenario, the annual growth rate might completely absorb the shock.

U – SHAPED

Under this scenario, the shock persists and there is permanent loss of output, with initial growth resuming and having a slower rebound.

L – SHAPED

A more downbeat scenario where one would have to assume that Covid-19 has led to significant structural damage to the economy’s supply such as labor market, productivity or capital formation. This would have a larger impact on the economic growth, triggering a global recession.

In order for businesses to survive, companies will have to be resilient and take necessary precautions to navigate past the changing times.

  1. Establish the facts
    It becomes essential for all businesses to outline the current business scenario and its impact in the short, medium and long term, keeping in mind the present-day situation. This involves running different scenarios, revisiting key business decisions for immediate recovery to alleviate business disruptions and potential revenue loss.
  2. Employee Involvement
    Employees, being a key part of any business, should be well informed with the transformational changes taking place. With each business and industry having different requirements, the employees should be made aware of the current situation and what is expected of them. Companies should support employees and communicate clearly about adaptation to digital workplace to ensure seamless continuity.
    It is also important to utilize collaborative tools across the departments to ensure communication and quality of work or service provided to clients is not hampered/ compromised in any manner.
  3. Cloud Based Solutions
    With social distancing being practiced by most companies, it is necessary for employees to adapt to cloud based applications and storage for easy access of data and documents by all the employees.
    Working on cloud technology provides real time data, thereby resulting in transparency and deeper engagements with clients.
  4. Dedicated Crisis Management Team
    A crisis like Covid 19 is having an impact on every part of the business. During a time of complexity and uncertainty, teams should be able to adapt and proactively coordinate in an effective way. Led by the CEO, a core team should take charge, with members from different teams and functions defining key specific goals to be achieved by the organization, focusing largely on the output to be achieved.
  5. Stress Testing
    Stress testing helps in identifying vulnerabilities in the current business model and can be useful in managing risk, strategy, risk appetite and capital decisions. Internal stress testing should be conducted to identify gaps and work towards recovery planning. Businesses need to focus on key trigger areas, revenue and variables that will directly impact their revenue and cost.
  6. Managing the Funds flow
    Growth objectives are key to every organization to maximize value and preserve the continuity of funds. During such times, it is important to identify areas of surplus and deficit funds and engage surplus to cover any deficits.
  7. Support clients
    During such times, it is equally important to work closely and maintain personal relationships with customers and clients by communicating clearly to identify key areas to focus on and offer assistance beyond the areas of regular service offered.

1. Business Continuity

  • Providing your team regular updates on the current situation in the region on key labor, fiscal and monetary measures taken by the Government.

2 Cloud Based Solutions

  • Keeping in mind the safety of employees, we can analyze the current system and processes in place and provide support towards digital transformation to cloud services to ease access across the business.
  • Affiniax Partners can help identify and maintain flexibility and synchronization between the business processes, applications and IT infrastructure.
  • This can be conducted through evaluating, planning, designing, implementing and testing of cloud-based solutions for companies.

3 Cross Functional Response Team

  • Setting up cross-functional teams for key workstreams – Employees welfare and ability to perform tasks, financial stress testing of the business, evaluation of budgets and closely monitor supply chain and other areas important to businesses.

4 Stress Testing

  • Define risk factors and run business-wide stress testing using various platforms across the organization, supported by technology to enable reviews.
  • Conduct sensitivity analysis and run scenarios on the viability and financial implications of business decisions. Review of potential opportunities to grow revenues within designated risk tolerance level.
  • Scenario analysis on the variables affecting revenues and cost and identifying input variables that could affect liquidity position of the business.
  • Running different scenarios of financial models (Cash flows, Balance sheets and P&L) to measure and identify potential liquidity and optimization techniques.
  • Scrutiny of budgets (revenue, sales, marketing, inventory, investment capacity) on pricing changes and discounts and optimization of supply chain (inventory levels, after sales stock, delivery capacity and capability).
  • Implement appropriate stabilization techniques for optimizing costs and supply chain.

5 Practice with Top Team

  • Analysis and scenarios will be discussed and reviewed with the top Management via reporting tools for deeper understanding of company risk profile.

To learn how we can help you, please contact us at mail@affiniax.com

DMCC Business Support Package

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Dubai Multi Commodities Center (DMCC), the world’s flagship Free Zone and Government of Dubai on commodities trade and enterprise has recently announced the roll out of a “Business Support Package”, to support and safeguard the business interests of its members during these difficult times.

Effective from 1st April to 30th June 2020, existing DMCC members can get exclusive support as such:

  • Waiver of late license renewal penalties
  • Waiver of office sharing permit fee
  • Waiver of all Flexi Desk and DMCC Business Centre Penalties
  • Discount on license renewal
  • 3 months’ rent holiday for Flexi Desk and DMCC Business Centre tenant’s renewal (this is applicable for those who are due for renewal during the offer period).

However, all existing offers will be discontinued during this period and for all businesses with activities suspended due to official UAE Government Policy on Covid 19. This offer is extended and valid until 30 September. Terms and conditions apply.

For any further enquiries and assistance, please feel free to contact our team at mail@affiniax.com.