Audit and Assurance

5 Common Audit Issues Faced by UAE Free Zone Companies

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Discover 5 common audit issues faced by UAE free zone companies with Affiniax Partners Dubai.

For businesses operating in UAE free zones, the annual audit is more than just a compliance requirement, it’s a key step in maintaining financial transparency and credibility. Free zone authorities now place strong emphasis on accurate and timely financial audits, and companies that fall short risk penalties, delays in license renewals, or even reputational damage.

As one of the leading audit firms in Dubai, we often see recurring issues during the audit process. Below are the five most common challenges UAE free zone companies face, along with practical steps to avoid them.

1. Incomplete or Disorganized Records

A frequent issue among SMEs and startups is weak record-keeping. Without proper documentation—such as invoices, receipts, contracts, and payroll records—auditors cannot verify transactions. This not only complicates the external audit process but can also create compliance risks.

How to avoid it: Use a reliable accounting system, keep records updated in real time, and carry out periodic reviews. A strong internal process makes audit & assurance smoother and faster.

2. Non-Compliance with IFRS Standards

Free zone companies are required to prepare financial statements in line with International Financial Reporting Standards (IFRS). However, many businesses prepare accounts using local shortcuts or outdated practices, leading to adjustments and delays during the compliance audit.

How to avoid it: Hire qualified accountants or outsource to professional auditing and accounting services in Dubai. Regular interim reviews help ensure IFRS compliance before the final audit.

3. Misclassification of Expenses and Revenues

A common error is misreporting financial data—for example, booking capital purchases as expenses or recognizing income too early. These mistakes can distort financial performance and raise red flags during both external audits and forensic audits if irregularities are suspected.

How to avoid it: Invest in staff training or partner with an experienced audit and compliance consulting firm to ensure accurate classification.

4. Unreconciled Bank Accounts and Balances

Bank reconciliations are one of the first checks during any audit & assurance engagement. Unreconciled accounts create discrepancies between reported balances and actual cash, undermining financial reliability.

How to avoid it: Conduct monthly reconciliations and resolve variances immediately. This simple step strengthens internal control and reduces audit issues.

5. Late Submission of Audit Reports

Every UAE free zone sets strict deadlines for submitting audited financial statements. Missing these deadlines can result in fines, non-renewal of trade licenses, or compliance warnings. Often, delays stem from companies starting the audit too late or providing incomplete data.

How to avoid it: Begin audit preparations well in advance. Engaging a trusted audit firm in Dubai ensures timely reporting and avoids penalties.

Why Do These Audit Issues Matter?

Whether it’s a compliance audit, external audit, or forensic audit, the process is not only about meeting free zone regulations, it’s also about building trust with investors, banks, and business partners. By proactively addressing these common issues, companies can avoid unnecessary stress, ensure smooth audits, and demonstrate strong financial governance.

At Affiniax Partners, our team specializes in audit & assurance, risk management compliance, and outsourced accounting services tailored to the needs of UAE free zone companies. With expert guidance, you can transform the audit process into a value-adding exercise rather than just a regulatory hurdle.

If your free zone company is due for an audit, contact us today. Our team of experienced auditors in Dubai will help you stay compliant, save time, and strengthen your financial foundation.

Ministerial Decision No. 84 of 2025: A Comprehensive Analysis of Enhanced Financial Reporting Requirements for UAE Corporate Tax

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Navigating UAE Corporate Tax- MD 84/2025 Financial Reporting Updates

Ministerial Decision No. 84 of 2025, issued by the UAE Ministry of Finance on March 25, 2025, marks a significant update to the financial reporting and audit requirements under the UAE Corporate Tax regime. Effective for tax periods commencing on or after January 1, 2025, this decision repeals and replaces Ministerial Decision No. 82 of 2023, reinforcing the UAE’s commitment to robust financial transparency and alignment with global tax practices.

Here’s a summary of its key provisions and implications:

1. Mandatory Audited Financial Statements

  • Individual Taxable Persons (not part of a Tax Group): Must prepare and maintain audited financial statements if their annual revenue exceeds AED 50 million during the relevant Tax Period.
  • Qualifying Free Zone Persons (QFZPs): All QFZPs are now universally required to prepare and maintain audited financial statements, regardless of their revenue, to maintain their preferential 0% Corporate Tax rate.
  • Tax Groups: All Tax Groups are now explicitly mandated to prepare and maintain audited special purpose financial statements for Corporate Tax purposes. This removes the previous AED 50 million consolidated revenue threshold for Tax Groups. The decision indicates that the form, procedures, and rules for these statements will be specified by the Federal Tax Authority (FTA).

2. Mandatory IFRS Adoption (Context from MD 114/2023)

  • While not solely introduced by MD 84/2025, this decision operates within the broader context established by Ministerial Decision No. 114 of 2023. All financial statements used for Corporate Tax purposes, including those subject to audit, must be prepared in full compliance with International Financial Reporting Standards (IFRS). Taxable Persons with revenue not exceeding AED 50 million may apply IFRS for Small and Medium-sized Entities (IFRS for SMEs). Cash basis accounting is permitted only if revenue does not exceed AED 3 million, or in exceptional circumstances with FTA approval.

3. Expanded Audit Scope

  • The decision broadens the scope of mandatory audits, particularly by removing the revenue threshold for Tax Groups and reiterating the requirement for all QFZPs, leading to an increased demand for statutory audit services across more entities.

4. Stricter Record Retention

  • All financial records, including statements, ledgers, invoices, and supporting documents, must be retained for at least seven years and be readily accessible to the FTA upon request.

5. New Requirements for Free Zone Distributors

  • QFZPs engaged in the activity of distribution of goods or materials in or from a Designated Zone will be subject to additional procedures to be prescribed by the FTA.

6. Non-Resident Audit Threshold Clarification

  • For Non-Resident Persons, only revenue derived through a UAE Permanent Establishment and/or nexus in the UAE will be taken into account when calculating the AED 50 million audit threshold.

7. Direct Corporate Tax Impact

  • High-quality, timely audited financial statements are no longer merely a compliance exercise but are directly integrated into Corporate Tax calculations and preferential tax status eligibility (such as QFZP status). They are now a strategic necessity for tax compliance and optimization.

Status of Further Guidance: As of July 2, 2025, the anticipated detailed guidance from the Federal Tax Authority on the “form, procedures, and rules” for audited special purpose financial statements for Tax Groups, and “additional procedures” for Free Zone Distributors, has not yet been publicly released. Businesses should actively monitor official FTA announcements for these forthcoming details.

This Ministerial Decision underscores the UAE’s commitment to enhancing financial transparency, streamlining tax administration, and aligning its corporate tax framework with international best practices.

For more information on how Affiniax can ensure your compliance to Ministerial Decision No. 84 of 2025, contact us at mail@affiniax.com.

Internal Control Over Financial Reporting (ICOFR) Audit – Case Study

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ICOFR audit of a company's internal controls that are designed to ensure the reliability and accuracy of its financial statements.

The Issue

A diversified group was facing repeated statutory audit qualifications and delays in financial closing due to:

  • Weak controls over revenue recognition and accruals
  • Lack of documentation and audit trail for journal entries and adjustments
  • Inconsistent application of accounting policies across business units
  • Limited understanding of financial control responsibilities among process owners
  • Absence of a formal ICOFR framework and control testing mechanism
  • This resulted in high compliance risk, investor concerns, and challenges in obtaining clean audit opinions.

Affiniax Approach

Our approach included:

  • Conducted process walkthroughs across key financial areas: revenue, receivables, procurement, payables, fixed assets, payroll, and financial close.
  • Mapped end-to-end process flows and identified risk and control points.
  • Developed a risk control matrix (RCM) covering entity-level and process-level controls.
  • Identified and documented manual and automated controls, and defined roles/responsibilities for control ownership.
  • Designed control testing procedures, sampling techniques, and control effectiveness assessments.
  • Provided remediation plans for design or operating effectiveness failures (e.g., lack of documentation, inadequate review mechanisms).
  • Conducted training workshops for control owners and finance teams on internal control awareness and documentation best practices.

Impact Delivered

  • Established a centralized ICOFR framework and repository of controls, improving consistency across all units.
  • Enabled timely and accurate financial reporting through effective risk mitigation and error prevention.
  • Reduced reliance on manual journal entries by identifying system-based controls and automations.
  • Supported external audit readiness with detailed control documentation, evidence, and walkthrough packs.
  • Enhanced control culture and ownership across departments, enabling smoother financial close processes.
  • Positioned the company to achieve clean audit reports, enhancing investor confidence and governance image.

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

Unlocking Business Potential with External Auditing

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Value-of-external-auditing-01.jpg

External auditing plays a pivotal role in enhancing a business’s value, offering numerous benefits that contribute to its stability, reputation, and operational efficiency. By conducting thorough and independent evaluations, external audits provide crucial insights that can transform a company’s trajectory toward sustainable success.

An external audit adds significant value to a business in several ways:

  1. Enhancing Financial Reporting Integrity:
    External audits ensure the accuracy and reliability of financial statements by independently verifying the information presented. This inserts confidence in stakeholders, including investors, lenders, and regulators, and helps maintain transparency and accountability in financial reporting.
  2. Identifying Weaknesses in Internal Controls:
    Through the audit process, external auditors assess the effectiveness of an organisation’s internal controls over financial reporting. By identifying weaknesses or deficiencies in these controls, auditors provide valuable insights that management can use to strengthen controls and mitigate risks of fraud or error.
  3. Detecting and Preventing Fraud:
    External auditors are trained to detect fraud indicators while examining financial statements and supporting documentation. By uncovering irregularities or inconsistencies, auditors help deter fraudulent activities and protect the organisation’s assets and reputation.
  4. Improving Operational Efficiency:
    The audit process often involves a review of business processes and procedures. Auditors may identify opportunities for streamlining operations, reducing costs, or improving efficiency, which can ultimately enhance the organisation’s overall performance and competitiveness.
  5. Facilitating Compliance with Regulations:
    External auditors ensure that the organisation complies with relevant laws, regulations, and accounting standards. By staying abreast of regulatory changes and requirements, auditors help mitigate the risk of non-compliance penalties and legal consequences, thereby safeguarding the organisation’s reputation and financial well-being.
  6. Providing Valuable Insights and Recommendations:
    External auditors offer valuable insights and recommendations based on their observations and findings during the audit process. These insights may include best practices, industry benchmarks, or areas for improvement, which management can leverage to make informed decisions and drive strategic initiatives.
  7. Enhancing Stakeholder Confidence:
    External audits enhance stakeholder confidence and trust by providing an independent and objective assessment of the organisation’s financial performance and operations. This can lead to stronger relationships with investors, creditors, customers, and other stakeholders, fostering long-term partnerships and facilitating access to capital.

Overall, the rigorous and systematic approach of external audits adds value to the business by promoting transparency, accountability, and sound governance practices, essential for sustainable growth and success in today’s competitive business environment.

Affiniax specialises in providing external audit services in the UAE and GCC. Get in touch with our experts to learn more.

Soft Close Audit

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Soft Close Audit

Preparation and finalization of management accounts for getting ready and reconciling the supporting schedules, while the audit is being conducted, may result in delays in meeting the deadline to deliver the audited financial statements promptly, and further distract and pile up the day-to-day operational tasks of the company’s management.

Having a comprehensive audit strategy and adopting best practices by the companies throughout the year can help everyone relax when the audit team arrives.

One of the practices is to plan and conduct a soft close audit, to review, verify and confirm the books of accounts, supporting schedules and related information are up-to-date, further, these will be ready and available to consolidate the subsequent period transactions (until the FY end) at the time of the year-end audit.

The soft close audit is the practice wherein the external auditors majorly focus on verifying historical transactions up to the cut-off date e.g. 10-month soft close audit (Oct 31). The auditors generally perform the test of the internal controls along with supporting samples, performing or/and planning a detailed walkthrough on the material and complex transactions during the soft-close to facilitate his year-end audit work.

This helps him to identify material discrepancies in the books of accounts, if any, beforehand to discuss with the management and ensure a timely conclusion of the audit post-year-end.

Soft Close Audit provides an opportunity for the management to plan and prepare the following points:

  • Closing Checklist: Will be performed to ensure that all month-end processes are completed, and all journal entries are posted. If there is no checklist to follow, quarterly and annual entries may be overlooked.
  • Document Verification: Management should not be scrambling at the hard close audit stage to find documentation for the auditors, e.g. if the Verification of documents and related agreements are required, like debt agreements, leasing arrangements, and contracts with major customers and vendors could be identified at the soft close audit stage to arrange them at time of the year- end audit.
  • Internal Controls: Soft close audit provides enough time to plan and conduct a test of controls to the external auditors to verify, whether these controls are effective, efficient, and up to the standards.
  • New Accounting Standards: Helps external auditors and management to reconcile the applicable interpretation (if any) of the newly introduced standards, changes, or amendments before closing and reporting the books of accounts for internal review purposes.
    To give awareness of new accounting pronouncements and modifications to existing pronouncements continually being introduced. It’s important to pay attention to the effective dates, and you should start on them earlier than you expect since they usually require more work.
  • Non-Recurring Transactions: If there are non-recurring transactions like the sale of property, acquisition, significant leases, a new incentive plan for management, a new line of business with a unique revenue stream, a change in debt, etc. Reach out early to soft close the audit, as it will take time for discussion and reach out to a consensus.
  • Balance Sheet Reconciliations: Balance sheet reconciliation at the soft close is audited to find any discrepancies, and fix processes throughout the year. For example, old outstanding checks on the bank reconciliation can be a sign of lost or duplicate checks.
  • Revenue Testing: To ensure accurate recording of revenue, having a process to verify that all shipments or services are billed promptly.
  • Expense Testing: A review of repair and maintenance can give an indication of impairment and identify the items that should have been capitalized as fixed assets.

Written by Raheel Tamimi, Mian Muhammad Azeem and Mufaddal Shabbir

Affiniax Partners collaborates with Pagero for KSA Compliance

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Saudi Arabia Business Advisors

Affiniax Partners is very pleased to announce it has collaborated with Pagero, a digital solution company with 20+ offices worldwide that has dedicated itself to the success of multiple conglomerates since its founding in 2009. Pagero is offering support to companies through the digitalisation of the accounts receivable and payables process; and distribution of electronic invoices in line with their ERP system. It provides access to an open, global, cloud-based network that makes on-boarding, connecting and compliance effortless.

The e-invoicing mandate in the Kingdom of Saudi Arabia, implemented from December 4 th 2021 (Phase 1), means that each invoice issued by the resident taxable person in KSA will be required to meet certain format specifications laid down under the law. The taxpayers are required to generate and archive invoices electronically according to the new content requirement. Under the implementation plan, ZATCA will be notifying taxpayers within 6 months’ before 1 st December 2023 (Phase 2) to connect with the invoicing platform.

Our collaboration will ensure that our KSA clients are compliant with the local laws of the country, implementing changes within their existing model where necessary. We continually seek new ways to better meet the needs of our clients by sharing ideas, training programs, and technical expertise. We look forward to being an active contributor in this digital transformation phase in the Kingdom of Saudi Arabia.

To know more about the project or the compliance requirements in KSA, please contact our Affiniax Partners team.

What Safety Measures Restaurants should take during the COVID-19 Pandemic

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Steps restaurants can take to get more customers during pandemic

After months of being stuck at home during lockdown, even the most experienced home chef would be longing for a meal that he or she did not labour to make in their kitchen. For some, a reason to change out of their sleepwear and get out of the house—with or without the kids—is becoming more of a necessity to keep their sanity than a celebratory activity. In short, people are eager to be able to eat out again.

It is safe to say that most, if not all, in the food-service industry are also eager to welcome back the diners that they are used to serving. Business owners are eager to be able to reopen and recover lost earnings while the service staff is eager to earn again after months of being without work. There are also many who simply miss the satisfaction of serving people meals that nourish them and giving them an enjoyable dining experience; who missed the creative expression that came with their food industry jobs. Whether it is grabbing an inexpensive meal at a quick-service restaurant or an exquisite dining experience at a fancy restaurant, food safety and the assurance that a consumer will not go home with a COVID-19 infection is of paramount concern to everyone.

For the employers or business owners and their management team, the responsibility for prevention and management of outbreaks rests on their shoulders.

  • Take steps to ensure that staff adhere to existing and additional government regulations to keep the workplace safe while the COVID-19 threat still exists.
  • Conduct a COVID-19 risk assessment of the entire workplace; having a tried and tested business continuity plan in place would also be a big help.
  • Increase visible monitoring and enforcement of control measures including HACCP-based SOPs.
  • Conduct regular reviews, including seeking feedback from staff and customers to identify areas for improvement.

All employees, on the other hand, must be more vigilant, strictly following all processes put in place to ensure food safety. Although it is very unlikely COVID-19 could be transmitted through properly prepared food or food packaging that is properly handled, staff must observe good hygiene practices at all times.

  • Wash hands frequently with soap and water for at least 20 seconds (or sanitise), especially before and after handling food, cleaning cutlery, dishes, glasses, or other items to be used by the customer.
  • Staff that handle dirty or used items, collect used dishes from customer tables, and handle payments should be designated for these activities only, whenever possible.
  • All employees must ensure their thorough understanding of all HACCP principles and:
    • identify any food handling hazard;
    • identify the critical control points (CCPs) to prevent, remove or reduce a hazard;
    • set limits for CCPs;
    • monitor the CCPs;
    • immediately correct any problem with a CCP;
    • put checks in place to make sure the HACCP plan is working; and
    • keep accurate and up-to-date records.

There are other resources available for business owners that could help to further reassure their customers that their establishment is a safe environment for them to be in. The World Travel and Tourism Council (WTTC) has come up with a global safety stamp to recognise establishments around the world who have adopted policies and protocols that ensure the safety of consumers (for more info, click here). Certification agency Bureau Veritas has also launched a Safeguard label for shops, restaurants, and other confined spaces were people gather (for more info, click here or here).

With business owners and their employees clearly understanding how their cooperation will ensure their customers will be safe while in their premises, this will allow for a more comfortable, enjoyable, and most importantly, COVID-19 safe customer experience. If you are in need of help with regards to implementing HACCP or another food safety management system such as ISO 22000 in your establishment, contact Affiniax Partners for a free consultation.

 

UAE Economic Substance Regulation ESR: Major Overhaul

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New ESR law 2020

The United Arab Emirates (“UAE”) Cabinet of Ministers issued Cabinet Resolution No. 57 of 2020 on 10 August, 2020. This resolution replaced the original Cabinet Resolution No.31 of 2019 (the original ESR law) concerning the Economic Substance Regulation (“ESR”). The UAE Ministry of Finance has now also updated its website with further information regarding the changes to the regulation. Since the application of the new resolution is retrospective (i.e. effective 1 January, 2019), all companies are advised to revisit Notifications already submitted.

The most prominent update in Cabinet Resolution No. 57 of 2020 was the appointment of the Federal Tax Authority (“FTA”) as the National Assessing Authority for the assessment and determination of ESR compliance and governance.

Major changes introduced in the ESR legislation include:

  1. The Federal Tax Authority has been appointed as the National Assessing Authority for the enforcement, assessment and determination of compliance with ESR rules by the licensees.
  2. The amended ESR (issued on 10 August, 2020) now covers juridical persons (those with separate legal personality) and unincorporated partnerships, while excluding natural persons – including sole proprietors, trusts and foundations. Also, the licensees that are now exempt include Investment funds, entities being Tax Resident outside the UAE and UAE branches of a foreign company (head office / parent company) whose relevant income is subject to Tax in a foreign country.
  3. As branches do not have separate legal identity from their parent or head office, they are not regarded as “Licensees”.
  4. Distribution & Service Center Business: The new regulation emphasises and clarifies that, for a trading business, there is no requirement to import and stock goods in the UAE in order to be considered as a Distribution and Service Center Business. Further, the law also clarifies that any services provided to foreign connected persons shall be considered a relevant activity (previously it stated that such services are only considered a relevant activity if they are “in connection with a business outside the State”).
  5. A Connected person shall be any entity that is part of the same group as a Licensee. Groups are defined as “two or more entities related through ownership or control such that they are required to prepare consolidated financial statements for financial reporting purposes under the accounting standards applicable thereto”.
  6. High Risk Intellectual Property Licensee The definition of a High-Risk Intellectual Property Licensee has been limited to an Intellectual Property Business that meets all of the following conditions:
    a) Licensee did not create the IP asset;
    b) Licensee acquired the IP asset from a connected person or in consideration for funding, research and development by another person situated in a foreign jurisdiction, and
    c) The Licensee has sold the intellectual property asset to a connected person or earns separately identifiable income from a foreign connected person in respect of the use or exploitation of the intellectual property asset.
  7. As the application of the amended ESR law is retrospective (i.e. effective 1 January, 2019), companies that have already submitted the ESR notifications based on the previously issued Cabinet Resolution No.31 of 2019 will need to re-submit the notification based on the new law for ESR i.e. Cabinet of Ministers issued Cabinet Resolution No. 57 of 2020. Further guidance on this matter is yet to be announced by the Ministry of Finance.
  8. The deadline for the annual ESR Notification is within 6 Months from the end of the Licensee’s financial year.
  9. The deadline for the annual ESR Report is within 12 months from the end of the financial year, same as before.
  10. The Penalty for non-submission of the ESR Notification by a licensee is now increased to AED 20,000 while the penalty for non-submission of the Annual report is now AED 50,000.

Given the above updates, and in particular the appointment of the FTA, the scope of ESR is increasing and demonstrates the UAE’s increased commitment towards international tax and reporting compliance. Also, the appointment of the FTA means that there shall now be a bridge between License issuing Authorities and the Federal Tax Authority. As observed in the enforcement of VAT laws in UAE, the FTA shall be thoroughly assessing the information being submitted under the ESR Notification and Annual Report.

It is strongly recommended that all Licensees re-assess and re-evaluate the already submitted ESR notification to ensure that they are in compliance with the updated regulation. Licensees that did not submit a Notification on the basis that the original ESR law did not apply to them may need to re-evaluate their position under the amended ESR law.

To understand more about how the above changes in ESR affect your business, please reach out to us on mail@Affiniax.com.

ESR Filing Deadlines

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ESR Filing requirement, ESR deadline

For ease of reference we have set out below details of the requirements to notify as communicated by the selected regulatory authorities, together with the deadline:

Regulatory Authority Who is required to file Deadline
ADGM Only entities/ licensees that are carrying out relevant activity By 30 June 2020
DAFZ All entities/ licensees, including those who do not undertake relevant activity By 15 June 2020 (extended from 31 May 2020)
DMCC All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
RAK ICC All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
Securities and Commodities Authority (SCA) SCA have contacted via email all Investment Management Firms, Management Company Firms regulated by SCA requesting submission of the notification form By 30 June 2020 (extended from 31 March 2020)
AJMAN FZ All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
RAK EZ All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
Dubai World Trade Centre Only entities/ licensees that are carrying out relevant activity By 30 June 2020
Dubai Aviation City Corporation All entities/ licensees, including those who do not undertake relevant activity By 23 June 2020 (extended from 7 June 2020)
Dubai Healthcare City (DHCC) Only entities/ licensees that are carrying out relevant activity By 7 June 2020 (extended form 31 May 2020)
Ministry of Economy Only entities/ licensees that are carrying out relevant activity By 30 June 2020
Hamriyah Free Zone Authority (HFZA) Only entities/ licensees that are carrying out relevant activity By 30 June 2020
Sharjah Airport International Free Zone (SAIF) Only entities/ licensees that are carrying out relevant activity By 30 June 2020
International Free Zone Authorities (IFZA) Only entities/ licensees that are carrying out relevant activity By 30 June 2020
Dubai Silicon Oasis (DSO) All entities/ licensees, including those who do not undertake relevant activity By 9 June 2020 (extended from 31 May 2020)
Dubai Development Authority (DDA) Only entities/ licensees that are carrying out relevant activity By 25 June 2020
Abu Dhabi Media Zone Authority All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
Umm Al Quwain Free Trade Zone (UAQ) All entities/ licensees, including those who do not undertake relevant activity By 30 June 2020
Fujairah Freezone All entities/ licensees, including those who do not undertake relevant activity By 15 June 2020
KIZAD All entities/ licensees, including those who do not undertake relevant activity By 20 June 2020
Jebel Ali Freezone (JAFZA) Only entities/ licensees that are carrying out relevant activity By 30 June 2020

Please contact Tanmay@affiniax.com if you wish to find out more or require assistance with your notification requirements.

GUIDELINES FOR DMCC MEMBER ENTITY OFFICES AS PER COMPANY REGULATIONS 2020

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Corporate Services Provider Dubai, HR Consultancy in Dubai -Guidelines for DMCC Member Entity Offices as per Company Regulations 2020

In line with the new rules and regulations set out on 2nd January 2020, DMCC has introduced guidelines to define the roles and responsibilities of DMCC member entities, who are required to comply with the following changes.

Officer Designation Applicable Rules
Director
  • Appointment of a Director is mandatory for all Companies except Branches entities.
  • There is no maximum limit to the number of Directors that a DMCC Company can appoint, but a minimum of one Director is required.
Manager
  • Appointment of a Manager is mandatory for DMCC member entities
Secretary
  • Appointment of a Secretary is now mandatory for all DMCC Member Entities except Branches. Branches have the option of appointing a Secretary if they wish to do so
  • Only one Secretary is allowed per DMCC Member entity.
Legal Representative
  • Appointment of a Legal Representative is no longer allowed for any DMCC member entity, but an Authorised Representative of the Company can be appointed with duly issued Power of Attorney.

DMCC Companies registered and licensed prior to the introduction of Company Regulations 2020, which has appointed a Legal Representative and has not appointed a Company Secretary, will have a maximum of twenty-four months to comply with the new rules.

The registered Legal Representative will have to resign, and if the Company wishes, it can issue a Power of Attorney to the Legal Representative in order to make him/her an Authorized Representative. A Company Secretary must be appointed in line with the new rules.

Branches established prior to the introduction of the new Company Regulations 2020, which have appointed a Director and Legal Representatives, will have to arrange for the removal of such Directors and Legal Representatives.

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

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