I have discussed company secretarial duties in previous articles. Think of it as an individual who acts for a company in the same way a personal or executive assistant does for a ranking corporate individual.
Until now, in the UAE, those duties have been reasonably minimal. Renewing your trade licence is the most common one.
With a proliferation in regulated regimes, such as VAT, CRS/FATCA, AML and, most recently, corporate tax, we have all been spending a lot of time on the Federal Tax Authority portal or Ministry of Finance website completing applications.
If you are unsure whether you have completed all of your registrations, go to these portals, download and review the required documentation. You can enlist support. Penalties apply for non-compliance.
When VAT launched, the portal would remind you that a certain document had expired and that you should provide the new version. After a year or so, this requirement quietly disappeared to even quieter, but no less joyful, celebrations. A year or so ago, it reappeared.
This time, compliance would not be optional. The first hint was the inability to move forward with certain applications until all the requested documents had been uploaded, reviewed and signed off. For a short time, the portal allowed you to complete this process through another required registration that included the same document.
Remember that the portal system has certain fields of information that are common to all platforms. A wise and useful approach. This optional process has sadly, and again quietly, disappeared.
This can potentially cause issues with registrations. Any delay in approving the updating of a document may cause an otherwise ready-to-submit, timely application to become late. This is because the time between the acts may straddle two months.
By the end of March, penalties will begin to apply for entities that do not update their documentation. Which documents, you may ask? Passports, Emirates IDs and, of course, trade licences. These are the ones you will typically see highlighted when you log into the portal.
But the remit of what is covered is much broader and will, and should, surprise many.
Any change in the name of the entity, its address or contact details must be notified. Should an activity on a trade licence be changed or an additional one added, this too must be communicated.
An interesting aspect relates to the changing of a legal form. It is not unusual for a business to begin as a sole proprietorship. You might better know the term as a sole trader. Effectively, an individual becomes a working rights-carrying, legally formed, trading entity.
Later, with success, it is decided to change the entity to an LLC, onshore or offshore. My experience here is that the portal does not allow a simple entity type change. Instead, the legacy entity must be deregistered and the evolved one registered.
Continuity becomes an issue here. Sometimes customers and suppliers’ terms and conditions contain break clauses should the legal form of an onboarded supplier or customer change. The process may need to be completed again.
Where the customer is a large and important part of an entity’s business, this could cause a delay in the signing off of projects while internal protocol conditions are complied with. Immediate business could be lost and long-term relationships might be affected.
It is now common for regulatory authority-issued certificates to form part of the onboarding process. This means corporate tax and VAT registrations. If you are deregistering and registering, this takes time. Explaining to a compliance department that you are no longer registered but soon will be, can be a very distracting conversation.
How long do you have to complete the process? Twenty working days. Just under a month. I am assuming that this limit refers to the time you have to submit the application rather than complete it.
Some questions to close with.
What are the penalties for non-compliance? Is it just one penalty or is it dependent on what is missing? Is it a single one-off charge, with interest added if not settled promptly? Is there a repeat charge or higher if the updating remains incomplete? I am unsure.
What happens when an individual no longer has an Emirates ID, but maintains their position in the business? There is nothing to update, but how is the portal supposed to know this?
A dual citizen may be using their other passport, having not updated the one they first registered with. Will the portal allow them to change nationality?
In drafting this article, I titled it "Beware the Ides of March". This is a reference to William Shakespeare’s Julius Caesar and the titular character’s continued pooh-poohing of warnings of bad tidings scheduled for March. This year, we are all Julius Caesar.
