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Employee Self-Service Portal in UAE

Employee Self-Service Portal (ESS) is a web-based resource through which employees can access their personal records and employment-related data. An ESS portal in UAE enables employees to manage different human capital services and job-related requests, without having to rely on the HR department.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

ESS Portal Modules

Employee Leave Management

Employee Profile Management

Loans and Advances applications

Report Center

Role Delegation

Edit Info portal

Proxy Requests

Configurable Approval Workflow

Configurable User Rights management

Team View and Calendar View

To-Do Lists

Alerts and Notification

Online Payslip

Exit Interview

Online Employee clearance

Expense claim Management

Business Travel claim

Air Ticket\ Leave Passage

School Fees reimbursement

Letters and Certificates

Over Time\ Time Sheet

Significance of ESS Portal

Before the advent of ESS portals, the HR department of an organization used to face numerous challenges, which adversely affected their productivity. The most common challenges they had to face were;

1. Communication between employees and employers 2. Collecting, authenticating, and managing employee reimbursement requests 3. Managing the IT declaration process every month

Unlike the traditional method, wherein employees had to personally call the HR or visit them to enquire about their leaves, payroll information, etc, now they can access all this information with just a login name and password. This has made the work of not just employees easier, but the HR department as well. The HR department of any organization is always equipped with work related to hiring, payroll calculation, etc and having employees approach them for minor reasons, can add to their work load. With ESS portal, HR can focus on their core work.

The HR department of an organization has the responsibility to inform numerous things to the employees; it can be organization policies or important announcements made by the Government. Hence, it is mandatory for HR and payroll departments to be able to communicate without any sort of friction.

The ESS portal attained much more significance with Covid-19 pandemic and the remote working scenario that resulted from it. Most of the organizations had to rely on work from home option; but the ones that use ESS portals didn’t face major issues with regard to employee attendance, leave recording, etc.

By giving employees access to their personal details as well information related to the entity, the employee engagement level increases, which brings in more productivity and also, employees are not left in ambiguity. They have the flexibility and freedom to complete tasks without having to make numerous phone calls or send multiple mails.

ESS portals are not just any additional feature of payroll; the right one has the potential to boost the efficiency and productivity of an organization. A properly organized ESS portal with the correct features will enhance the positive outlook of employees towards their organization. It can save time by making certain complex tasks such as follow-up communication, reimbursements, IT declarations, POI, and information distribution easier and fast. HLB HAMT’s employee self-service portal helps companies overcome HR-related complexities and execute operations effectively.

READ MORE: https://hlbhamt.com/ess-employee-self-service-portal-uae/

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Business Valuation Service in UAE

Business valuation is used to determine the total economic value of a company and its assets. Majority of the organizations consider valuation prior to entering a major business deal. But, with the ever-changing global marketplace, gaining an accurate understanding about what your business is worth even without any specific reason can be highly beneficial and can enhance the value of your business. Business valuation services in UAE gives an insight into the strengths and weaknesses of your company.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

Organizations seek valuations for diverse reasons. The major ones include;

exit strategy planning/ selling a business

financial reporting

mergers

succession planning

shareholder or partnership disputes

Valuation is a complex process which requires the correct blend of analysis, experience and professional judgment. While conducting business valuation, an extensive examination of the market, the asset, the entity and its competitors, financial and non-financial details, and the legal and regulatory environment is carried out, using different methods. The commonly used methods for assessing the value of a business are;

Income approach

An income-based approach is used to determine the cash businesses will make in the future and it also provides an assessment of risk. The major income based approaches are;

capitalization of earnings (or cash flow) methodology and

discounted cash flow methodology

The Earnings Capitalization Method values businesses by calculating the future maintainable profits by analyzing the past or the projected working results of the entity. This is done after making required modifications to non-recurring and extraordinary income and expenses.

In the Discounted Cash Flow (DCF) method, the future cash flows are considered while estimating the value of a business. The projected cash flows are discounted at the weighted average cost of capital and the value of business is determined by adding the discounted free cash flows.

In the DCF approach, the below factors are considered;

Future free cash flows

The time period of cash flows

The relevant discount rate to be applied to cash flows

The cumulative value of the free cash flows beyond the predictable time frame

Debt value

Market Approach

In market approach, the actual transactions are reviewed and the selling prices of similar businesses are compared. To ensure the data from transactions is reliable, publicly listed company data on precedent transactions is used. Market approach can be used in a stand-alone manner only if there are comparable transactions that happened in the recent past and reliable data to support these transactions.

Asset Approach

An asset-based valuation provides a complete analysis of the assets in an entity. The value of these assets after deducting liabilities is considered while conducting business valuation. The assets include both tangible items such as real estate, car, etc and intangible assets such as copyrights and trademarks.

These techniques are highly beneficial in determining the value of a firm. But, along with this, various other factors such as the fundamentals of the business model, the management team, the key value propositions that the business offers and its consumer base should also be considered, to understand the true value of a business. The business valuation team at HLB HAMT takes into consideration these factors while helping businesses assess their worth.

Read More:https://hlbhamt.com/audit-advisory-dubai/audit-assurance-dubai/business-valuations

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Major free zones in Dubai

Dubai is not just a tourist’s paradise; the city is one of the most promising business destinations across the globe. Investors have been making their way to Dubai, in search of the perfect base for their company and the city has been successful so far, in fulfilling the various requirements of investors. The business-friendly initiatives by the government, diverse jurisdictions and the low-tax regime are some of the factors that have been attracting people to Dubai. One can setup their company in Dubai mainland, offshore or free zones.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

There are more than 30 free zones operating in Dubai and all of them promise varied facilities.

Advantages of setting up business in Dubai free zones

· Full ownership

· Full repatriation of profits and cost

· Absence of personal income tax

· Nil currency restrictions

· Top-notch infrastructure

· Wide-range of activities

· Availability of varied licenses

· Faster incorporation procedure

· Diverse office package solutions

Prominent Free Zones in Dubai

JAFZA

Jebel Ali Free Zone is one among the fastest-growing free zones in the MESA region, which houses more than 8,700 firms including 100+ Fortune Global 500 companies from 130+ nations. JAFZA is a perfect base to set up your dream firm as it offers numerous benefits including 5 types of licenses and different types of business formation.

DAFZ

There are more than 2000 registered businesses from over 20+ sectors and diverse industries in Dubai Airport Free Zone. Strategically located next to Dubai International Airport, DAFZ is the ideal entry to the Middle East market. The free zone offers diverse range of top-notch facilities, business set-up service packages and lucrative solutions and one can setup business in DAFZ in a matter of few days.

DMCC

Dubai Multi Commodities Centre is a leading zone for trading international commodities. Ever since its establishment in the year 2002, DMCC has come a long way and the free zone currently houses more than 20000 companies and an average of 170 companies join this free zone every month. There are a wide range of industries functioning at DMCC that include, agro, energy, financial services, diamonds, gold and base metals, etc.

MEYDAN

Meydan free zone was established in the year 2009 and it is situated in the heart of Dubai. Meydan is one of the most sought-after free zones in Dubai, mainly because of its location, world-class infrastructure and business and tax-friendly environment. Companies can choose from over 1500 business activities at Meydan and the free zone also provides the flexibility to combine up to 3 business activity groups from different sectors in the trade license.

IFZA

International Free Zone Authority is located in an innovation-focused district in Dubai and the free zone offers numerous office solutions and real estate products. The diverse residency visa packages coupled with thousands of business activities make IFZA a favorable destination. One can also merge Professional, Commercial and Industrial Business Activities under one License at IFZA.

DIFC

The Dubai International Financial Centre is a well-known global economic hub in the Middle East, Africa and South Asia region. There are a wide-range of financial and non-financial companies and international retailers operating at DIFC. Banking, professional services, global corporation, insurance, and wealth management are the prominent areas of businesses at DIFC. Starting a business at DIFC is an easy process and it takes minimal time.

Dubai South

Dubai South was set-up between the two emirates of Dubai and Abu Dhabi in close proximity to the Jebel Ali seaport, with the intention to connect the region with the outside world. The free zone provides a complete array of administrative and virtual services to investors.

While setting up a business in free zones in Dubai is not much complicated, the assistance of a consultancy can make the process easier. HLB HAMT is a business consultancy firm that has helped thousands of business from different verticals setup their base across various free zones of this futuristic city.

Read more: hlbhamt.com/business-setup-in-uae-free-zone

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UAE CORPORATE TAX

The UAE has recently made it to the headlines with its decision to implement Corporate Tax, commencing from June 2023. Corporate tax is a type of Direct tax that is charged on the net income or profit of corporations and other businesses, which is also known as corporate income tax or business profits tax. Most nations across the globe had already introduced Corporate Tax in UAE.

The decision to introduce corporate tax reflects UAE’s constant strive to evolve and expand, by restructuring its economy. The country is on a move to shift away from its reliance on oil and gas revenues and it is working to reinforce its position as a digital and technological powerhouse.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

UAE corporate tax objectives

By implementing corporate tax in the country, UAE intends to;

· reinforce its position as the foremost international centre for business and investment

· speed-up its growth and transformation to attain its strategic goals

· confirm its commitment to fulfilling global standards for tax transparency and avoiding unfair tax practices

Applicability of UAE corporate tax

Corporate tax will be applicable to:

All businesses and individuals that carry out business activities with a UAE commercial license

Free zone businesses (The CT incentives, that are being provided to free zone entities that follow all the regulatory requirements and that do not conduct any business on UAE mainland, will be continued)

Foreign companies and individuals, provided they accomplish a trade or business in the UAE in an ongoing or regular manner

Banking functions

Real estate management, construction, development, agency and brokerage activities

Corporate tax exemptions

· Businesses engaged in the extraction of natural resources will remain within the scope of current Emirate level corporate taxation and thus, won’t be subject to corporate tax.

· Dividends and capital gains from the qualified shareholdings made by a company in the UAE will be excluded from CT.

· Qualifying intra-group transactions and reorganizations will be exempt from CT, provided the required conditions are fulfilled.

Also, CT will not be applicable to:

· The personal income of employees, even if received from public or the private sector

· Interest and other income an individual gets from bank deposits or saving schemes

· The income made by a foreign investor from dividends, capital gains, interest, royalties and any other investment returns

· Investment made by individuals in real estate, using their personal capacity

· Dividends, capital gains and other earnings that are made by individuals from owning shares or other securities in their personal capacity.

Corporate tax rate in the UAE

The Federal Tax Authority will be the regulatory authority for the corporate tax in UAE and also monitor its administration, collection and enforcement. According to Ministry of Finance, the corporate tax rates are as follow;

· Nil for taxable income up to AED 375,000

· 9 per cent for taxable income more than AED 375,000

Corporate tax is being introduced in the UAE for the first time and as such it is expected to bring in major changes to the tax and compliance costs of majority of businesses. Companies must be compliant with the new tax regime which will involve modifications to corporate structure, operating model(s), finance/tax operations, reporting systems, legal agreements and transfer pricing policies if required.

The assistance of a consultancy that has a specialized tax team will smoothen the process of corporate tax implementation and the necessary compliance. HLB HAMT is a tax agent in UAE approved by FTA who has provided aid to more than 800 clients for tax related issues. The company is a member firm of HLB International and has the global exposure to help entities comply with corporate tax, once it gets implemented in the year 2023.

READ MORE: hlbhamt.com/services/uae-corporate-tax

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Accounting Outsourcing in UAE

Accounting is one among the most vital functions of an organization; be it in UAE or any other part of the world. Many investors across the globe are now making their way to the futuristic city of Dubai, mainly because of the strategic location and expat friendly business opportunities. With the increasing number of businesses in the country, the need for reliable accounting agencies also increases.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

Accounting is much more than just numbers; timely and accurate business reports have the potential to keep track of a company’s performance and eventually make the right strategic decisions based on them. The accounting team carries out numerous functions within an organization which range from daily transaction coding, and accounts receivable to accounts payable and payroll, financial reporting management.

With diverse business functions to take care of, the process of accounting becomes an additional burden for companies. Hence, to tackle this and to focus on the core business areas, companies seek the assistance of reliable accounting providers, who have the expertise and experience handling accounting of diverse entities.

Accounting Outsourcing Process in UAE

The accounting outsourcing process is done in a very systematic and focused manner and it involves a thorough understanding of the business and the requirements of the management and other stakeholders. The complete process is planned with the approval from the management and based on this, the resources are arranged. The resources then perform the work according to the agreed scope. The reporting process takes place on a monthly / quarterly interval.

The outsourcing team usually consists of Accounting and Finance Professionals from Data Entry Level to Director Level who hold qualifications such as Commerce degree & Masters, MBAs in Finance, ACCAs, and CAs etc. Outsourced team will have experience working with Accounting software and ERPs such as Quick Books, Zoho Books, Xero, Tally, Focus, Oracle, SAP, Sage etc. The software selection is dependent on information required and the available budget.

Benefits of Outsourcing Accounting Functions

There are numerous benefits of outsourcing accounting in UAE; the major ones include;

Access to specialized knowledge

Outsourcing accounting operations provides the assistance of experts who are highly qualified and trained. Many organizations will have requirement for bookkeeper, accountant, controller, etc, but it is not viable for businesses to employ all of them. With outsourcing, businesses are provided with all these services.

Reduced cost

Hiring employees to handle accounting operation is quite expense. It is not just the salary that needs to be considered; businesses will also have to spend money on other benefits, taxes, etc. With outsourcing, businesses get high-quality service without spending extra money on labor costs.

Saves time

Companies need to focus on various aspects of businesses; be it marketing, sales or operations. Outsourcing accounting operation frees up the time of companies and permits them to fulfill various other significant tasks.

Advanced tools and processes

Businesses that outsource their accounting operations get access to better tools, which help in bringing more value to the company. Smaller businesses may not be able to afford such expensive tools; but outsourcing makes it possible.

Accounting is quite a complex process and without the assistance of an experienced team it becomes even more complicated. For error-free and accurate accounting, outsourcing would be the best option. HLB HAMT is an account outsourcing service firm in Dubai, UAE that provides end-to-end professional accounts outsourcing services and financial management services at reduced cost.

Read More: https://hlbhamt.com/services/accounts-outsourcing-services-dubai-uae/

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Tax Residency Certificate in UAE

Tax residency certificate is issued by the Federal Tax Authority in the UAE, to let government entities, companies and individuals take advantage of double taxation avoidance agreement. Branches of companies cannot avail TRC as they are not included in double taxation avoidance agreements.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

What is meant by double taxation?

When one taxpayer is required to pay tax twice in two different countries, on the same tax base, it is known as double taxation. This affects the transfer of goods and services across the border.

To avoid double taxation and to enhance the trade relations between various nations, UAE entered into a double taxation avoidance agreement with more than 100 countries. 

Purpose of double taxation avoidance agreement

Enhance the development objectives of the nation and help in the diversification of national income

Abolish double taxation, extra and indirect taxes and fiscal evasion

Enable smoother cross-border trade and investment flows

Provide complete protection to tax payers from double taxation; both direct and indirect forms.

Consider taxation problems and the global happenings in the economic, financial sectors, and the new financial instruments and the methods of transfer pricing

Give complete support while transferring the goods, services and also during capital movements.

Tax residency certificate is also known as tax domicile certificate and it is valid for a year and is provided to individuals as well as companies. It was the Ministry of Finance that was in charge of TRC issuance till November, 2020 and later on it was changed to Federal Tax authority as per the Cabinet Decision No. 65 of 2020.

For individuals

Individuals, who have stayed in the UAE for a minimum of 180 days, can apply for TRC. Non-residents cannot apply for one.

Documents required

A copy of the passport, valid permit of residence and ID card

A certified copy of rental agreement

Bank statement from a local bank(6months statement)

Source of earnings or salary slip

A report from the General Directorate of Residency and Foreigners Affairs mentioning the number of days the individual has stayed in the country

Any tax forms from the nation in which the TRC certificate is to be submitted

In the case of investors, the above mentioned documents along with the company license including partners' names should be attached.

For housewives

Marriage certificate

Copy of passports and permits of residence for the married couple

Salary certificate

Husband’s employment contract

Along with these the other documents related to the husband as referred to earlier must also be submitted.

For companies

Companies that have functioned in the UAE for at least one year can avail tax residency certificate.

Documents required

Trade licence copy

Establishment contract certified by the authorities concerned (provided it is not a sole entity)

Copies of the company’s owners/partners/directors' passports, IDs and permits of residence

A certified copy of the audited fiscal accounts

A 6 months validated bank statement

A certified copy of the rental contract

The organisational structure of the firm (provided it is not a sole company)

Any tax forms from the nation in which the TRC certificate is to be submitted

It takes just a couple of days to get your tax residency certificate in the UAE and with the assistance of a consultancy the application process becomes simpler. HLB HAMT has been helping companies and individuals in the UAE acquire TRC certificate for years. We help with the required documentation and the application procedure. We also assist in the attestation of certain forms (certain countries require this) from FTA along with the TRC application

Read more: https://hlbhamt.com/services/tax-residency-domicile-certificate-dubai-uae/

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Due Diligence Services in UAE

The global mergers and acquisitions market witnessed massive growth in the year 2021, with the number of announced deals exceeding 62,000. The value from publicly disclosed deals was US$5.1tn; higher by 57% when compared to the year 2020.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

There are thousands of mergers and acquisitions deals taking place around the globe annually, but there is no assurance on the success rates of these deals. In fact, according to studies, the number of failed deals surpasses the successful ones. There might be numerous reasons behind an M&A deal failure, but a majority of businesses cite the lack of due Diligence to be a major reason for an unsuccessful deal.

Due Diligence plays a vital role in the successful navigation of a business deal. Due Diligence is an investigation or audit of a potential investment, product, or key business decision that helps in gaining a deeper understanding of the target organization or investment and identifying any potential risks or issues.

Due Diligence methodology in UAE

A Due Diligence services in UAE generally involves the below steps;

Deciding the scope and objective of the due Diligence

Obtaining the required information such as historical audited financials, recent management financials, business plans, banking and liabilities data, information on operations, assets, employees from the target company and analyzing these details

Understanding the deal drivers

Organizing interviews and reviewing the policies and procedures

Onsite assessment and comprehensive walkthroughs where required

Holding discussions with the management to authenticate findings

Analyzing the implications of the major findings

Providing the Due Diligence report highlighting key risks, proposed mitigants and other recommendations

Factors to be considered while arriving at the Enterprise Value

Types of due Diligence

Financial Due Diligence

Financial due Diligence gives an insight into the monetary status of an entity. The financial data provided, which includes income statements, balance sheets, cash flow statements, etc, are examined thoroughly prior to a transaction.

Commercial Due Diligence

With the help of commercial due Diligence, a buyer can get a clear understanding of the business based on its positioning in its operating markets, its quality of management, organizational structure and policies.

Tax Due Diligence

Tax due Diligence provides an independent review of the tax profile of the target business and helps in identifying tax-saving opportunities and tax risks. It helps in assessing historical tax exposures and various modes of tax neutral deal structuring.

Human Resources Due Diligence

HR due Diligence makes it possible to analyze the human capital within a company, by identifying the qualifications, technical ability and working initiative of the target firm’s senior management team as well as key staff. Further, it can also give valuable insights into the company’s culture and HR practices. Other risks like dependence of the acquiree on key personnel and impact of a merged structure on such personnel can be highlighted.

Operational Due Diligence

An understanding of the non-financial aspects of the target firm by investigating the business model and operations is termed operational due Diligence. This usually includes an evaluation of systems and processes, review of the existing management team, staffing levels and other HR operations, or insurance arrangements and risk assessment.

Legal Due Diligence

An investor must know beforehand any legal risks or issues associated with the investment decision such as property ownership, intellectual property and employment disputes.

Administrative Due Diligence

Admin-related information such as facilities, occupancy rate, number of workstations, etc must be verified to ensure all operational costs are captured in the financials.

Asset Due Diligence

Asset due Diligence includes detailed information related to fixed assets and their locations, all lease agreements for equipment, sales and purchases data of major equipment, real estate activities, mortgages, title policies, and use permits.

Customer Due Diligence

Customer due Diligence is the examination and analysis of major customers by collecting information such as service agreements and related insurance coverage, existing credit policies, customer satisfaction score, and related reports for past periods.

Due Diligence is an integral part of any merger and acquisitions transaction, which helps the management forecast the success or failure of a deal. With the help of an experienced due Diligence team businesses can recognize possible risks and potential opportunities. HLB HAMT helps businesses establish the correct value of a transaction and identify issues and risks if any.

Read more: https://hlbhamt.com/audit-advisory-dubai/audit-assurance-dubai/due-diligence

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PAYROLL PROCESS IN UAE

HLB HAMT is a payroll outsourcing provider in the UAE that has been assisting clients manage their payroll cycle, with 100 percent accuracy and confidentiality. Payroll process is a mandatory function in any business that requires time and an eye for detail. Even though payroll laws and regulations vary from country to country, the basic principle remains the same; paying all the employees on time, without any error in calculations.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

In the UAE, payroll requirements are taken care of by the labour law. The new labour law, Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector, came into effect on 2nd February, 2022, replacing the previous Federal Law No. 8 of 1980. The new law intends to protect the rights of both employer and employee and it covers subjects connected to working hours, overtime, leaves, vacation and public holidays, employing juveniles, employee records, safety standards, minimum wage, termination of employment, end of service gratuity payments and work injuries. The law does not specify any minimum wage, but the salary provided to employees must be sufficient to fulfill their basic requirements.

It is the Ministry of Human Resources and Emiratisation (MoHRE) that is in charge of supervising the employer-employee relations and ensuring labour rights are maintained in the private sector.

Wages Protection System

For non-free zone companies and JAFZA free zone, payments are controlled as per the wages protection system. As per this system, employees’ wages will be transferred to their accounts in banks or financial organizations, which are authorized by the Central Bank of UAE. Unless a company registers with WPS, MoHRE does not involve in any kind of transactions or deals with them.

The payment can be made in the national currency of the country, Emirati Dirham or any other currency, provided it has been agreed upon by both the employer and employee in the employment contract.  The employees must be paid monthly or bi-weekly based on the type of contract.

Payroll is not subject to income tax in the UAE and as such there are no mandated tax deductions. But, UAE nationals will have to contribute towards national pension plans contributions.

Gratuity payment in UAE

Gratuity is a one-time payment made to employees following the end of their service, provided the employee has served in the company for more than a year. As the service period of the employee increases, gratuity sum also accrues. While calculating the end of service gratuity in UAE, the days of absence from work without payment are not considered. The gratuity amount is calculated as given below;

21 days pay for each year of the first five years of employment

30 days salary for each additional year

Outsourcing payroll in UAE

Companies usually find it bit difficult to manage payroll of multiple employees, when they have numerous other core business functions going on at a daily basis. In the case of larger enterprises, that has thousands of employees, the work increases. Moreover, when you do payroll on your own, the chances of error increase and the mistakes in the calculation of salaries can result in dissatisfied employees and can affect the work productivity.

Outsourcing the payroll function not just frees up the time of an entity, but also offers the assistance of a professional company that can provide accurate results, that is compliant with the laws and regulations. Another major advantage of outsourcing the payroll function in the UAE is the cost-effectiveness it provides. A company need not bear the cost of costly technology or skilled personnel as opposed to processing payroll internally.

UAE payroll is subject to numerous laws and regulations; hence the assistance of a professional squad who are well updated about the compliances and changes in the industry is mandatory. Outsourcing payroll also comes with additional data security as these consultancies will be equipped with highly updated resources and strategies to protect the sensitive information of employees.

READ MORE: hlbhamt.com/payroll-process-in-uae

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Accounting and Bookkeeping in UAE

https://hlbhamt.com/bookkeeping-and-accounting-services-dubai-uae

Accounting and bookkeeping are the most significant functions in a business that helps in generating accurate financial reports. Bookkeeping is the process of recording an entity’s monetary dealings into organized accounts.

A deep understanding about the financial position of the business you are doing is mandatory as it not only helps being compliant with the regulations, but also gives the required data to measure the performance of your business. Bookkeeping boosts the financial foundation of any business, which eventually helps in making business decisions.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

Prior to commencing with bookkeeping operations, businesses must consider certain areas of their business, specifically the volume of daily transactions and the amount of revenue made. For smaller entities, a complex bookkeeping method might bring in unnecessary problems and in the case of larger corporations, less robust methods may not be sufficient.

Organized, reliable and updated recordkeeping are mandatory for the smooth functioning of an organization. Hence, only the right team or company can ensure this is accurately taken care of. Business owners find it really difficult to keep up with the various accounting and bookkeeping tasks, as they have numerous other functions going on at the entity. As a result, the most preferred method organizations opt for is outsourcing accounting and bookkeeping services in UAE. The advantages of outsourcing accounting and bookkeeping are many. It helps in/ with;

· Reducing cost

· Ensuring accuracy

· Focusing on the core area

· Reducing administrative burden

· Assurance on continuity of service

· Increasing flexibility to respond to growing business requirements

Accounting and bookkeeping in UAE

There are primarily 4 reasons for maintaining books of accounts. These are legal requirements, management control of businesses, informing investors and shareholders about the monetary condition of the entity, and other third-party requirements, e.g., banks, municipalities, or financial institutions.

The UAE Commercial Companies Law, Federal Law No 2 of 2015, mandates every organization in the UAE to maintain proper books of accounts and to hire a registered auditor to audit its books of accounts annually.

Administrative penalties will be charged if books of accounts with supporting documents are not properly maintained. It can range from AED 10,000 to AED 1, 00,000.

Accounting services in UAE

Online or cloud based accounting

In cloud based accounting, all the information is stored on a cloud server, which makes it possible to access financial information from anywhere, at anytime. It is usually preferred by SMEs and startups.

Onsite accounting

Mid-sized and larger organizations usually opt for onsite accounting, wherein the person employed to carry out the bookkeeping process will be physically present at the place of business.

Accounting system setup and training

Accounting system setup and training involves examining and evaluating the existing accounting system of an enterprise and based on this, developing the most appropriate accounting configuration for the entity.

Accounting secondment

Sending employees from one company to another temporarily for a specific period of time, to carry out a certain work is termed as accounting secondment.

Receivable and payable management

This primarily includes developing POs/Invoices, electronic delivery of the same and sending periodical status report to the management.

Budgeting and forecasting

Budgeting and forecasting is all about preparing periodical budgets like revenue and expenditure and cash flow forecast.

Data entry or transaction processing

Data entry or transaction processing services help entities reduce the delays and errors while dealing with large volume of data.

Reconciliation assignments

The reconciliation service generally includes cash/bank Reco, inventory Reco and receivables & Payables Reco.

Management reporting

This includes providing customized reports to the management on time to help in the process of decision making and analyzing the performance of the business.

Accounting supervision

The accounts prepared by the client are thoroughly reviewed and corrections to enhance the reliability of financial information are provided.

Accounting is an integral part in the functioning of an organization and it is a complex process too. Outsourcing the process comes with numerous benefits. One should always be vigilant while outsourcing your accounting in the UAE, as there are numerous accounting and bookkeeping consultancies in the UAE, but not many can provide accurate and timely services. HLB HAMT has been providing accounting and bookkeeping services to entities from different vertical for more than two decades.

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VAT SERVICES IN UAE

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Value added tax is a tax collected on the consumption or use of goods and services at the point of sale. The UAE introduced Value added tax in the year 2018 at a standard rate of 5 percent, with the intention to provide the country with a new source of income. With the introduction of VAT in UAE, the government of the country was successful in reducing its dependence on oil as a source of revenue.

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VAT registration and applicability

Businesses must undergo VAT registration, if their taxable supplies and imports exceed AED 375,000 per year. In the case of businesses whose supplies and imports exceed AED 187,500 per annum, VAT registration is optional.

The tax that businesses collect from their customers are paid to the government and the government provides a refund to businesses on the tax they have paid to suppliers. Foreign tourists & certain entities can recover the VAT they incurred while on a visit to the country.

VAT is applicable to tax-registered businesses on the UAE mainland as well as free zones across the country. Certain transactions in cases where the UAE Cabinet gives a ‘designated zone’ status to a particular free zone, won’t be subject to VAT. VAT won’t be applicable for transfer of goods between designated zones.

Vat return filing

VAT registered businesses or the ‘taxable persons’ are required to submit VAT return to the Federal Tax Authority for each tax period. A VAT return generally includes the value of the supplies and purchases a taxable person has made during the tax period, and reflects the taxable person’s net VAT liability.

The VAT Return filing in Dubai must be submitted online via the FTA portal. The taxable Person, or another person assigned by the taxable person (for example, a Tax Agent or a Legal Representative) can submit the tax return.

VAT liability

The difference between output tax payable (VAT charged on supplies of goods and services) for a specific time frame and the input tax (VAT incurred on purchases) refundable for the same time frame is termed as VAT liability. If output tax is more than input tax amount, the difference amount must be paid to FTA and situations wherein input tax exceeds output tax, the taxable person can recover the excess input tax.

The FTA mandates taxable businesses to file VAT return within 28 days of the end of the ‘tax period’ as stated for each mode of business. The standard tax period is:

· 3 months for businesses whose annual turnover is below AED150 million

· monthly for businesses whose annual turnover is more than AED150 million

Certain types of businesses might be given a different tax period by the FTA. If a business does not file tax return within the specified time frame, the violator will have to pay fine as per the provisions of Cabinet Resolution No. 49 of 2021 on Administrative Penalties for Violations of Tax Laws in the UAE.

VAT applicability for different sectors

VAT- Zero-rated sectors

VAT will be charged at 0% for the below mentioned categories of supplies:

· Exports of goods and services to outside the GCC

· Global transportation, and related supplies

· Supplies of certain sea, air and land means of transportation (such as aircrafts and ships

· Certain investment grade precious metals (e.g. gold, silver, of 99% purity)

· Newly built residential properties, that are supplied for the first time within three years of their construction

· Supply of some education services, and supply of relevant goods and services

· Supply of some healthcare services, and supply of relevant goods and services

VAT- exempt sectors

The below mentioned categories of supplies will not be subjected to VAT:

· The supply of certain financial services

· Residential properties

· Bare land

· Local passenger transport

VAT compliance is a not an easy process; it requires regular monitoring and accurate recording in the books of accounts and correct reporting to FTA before the due date. Many of the VAT registered entities in UAE are still facing problems in arriving at the correct VAT treatment for various transactions effected during the course of day-to-day business operations. Amidst this ambiguity on a few scenarios faced by VAT registered companies, as a part of strict adherence on regulations, FTA is conducting audits of VAT registrants across industries irrespective of location (Designated/Free zone or Mainland) which eventually ensure compliance with VAT Decree Law and regulations. For this, organizations in UAE usually seek the assistance of professionally qualified staff to manage VAT-related tasks and ensure compliance of the same.

HLB HAMT is a FTA approved tax agent that helps companies in UAE with VAT implementation and compliance with the tax procedures.

HLB HAMT is always striving to provide value added service to our clients and as such, updating our clients on practical challenges that may enhance the financial obligation of our clients is vital to our service vision. By taking proper control checks and periodical assessment, companies can reduce the financial risk that can arise in case of administrative non-compliance.

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Business Setup in UAE

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The UAE is one among the most competitive economies in the world that has experienced substantial expansion over the last few decades. The stable political environment of the country coupled with its position as a strategic hub and the business friendly policies has helped boost UAE’s position as an ideal investment destination.

HLB HAMT Level 18 City Tower -2, Sheikh Zayed Road PO Box No 32665 Dubai – United Arab Emirates. T: +971 4 327 7775 E-mail: dubai@hlbhamt.com

The country promises numerous business options as well as significant rewards on investment across diverse sectors. The government of the country has been successful in coming up with various strategies and initiatives that has helped in economic diversification and attracting foreign investment into the country. The recent initiative to provide complete foreign ownership to businesses on UAE mainland has been welcomed whole-heartedly by expats across the globe.

Business jurisdictions in the UAE

There are three business jurisdictions in the UAE, namely mainland, free zone and offshore.

Mainland

Free Zone

Offshore

A mainland company is an onshore company licensed by the Department of Economic Development (DED) of the related emirate that has the permission to conduct business in the local market as well as outside the country with nil restriction.

Initially, non-UAE nationals planning to start their business on UAE mainland had to team up with a UAE national. In this partnership the UAE national used to own 51 percent of shares and the remaining 49 percent would be owned by the non-UAE national. But with the recent amendment in the Commercial Companies Law, 100 percent ownership is being offered to foreign nationals (for selected activities) and a local sponsor is no more mandatory.

 Advantages of setting up business on Mainland

Complete foreign ownership for selected activities

Permission to trade with other businesses on the mainland

Diverse range of business activities

Consent to work with UAE governmental bodies

Can open an office anywhere in the country

Free zones in UAE

There are more than 50 free zones in the UAE and these free zones have a special tax, customs and imports system and are governed by their own framework of regulations. Free zones provide 100 percent business ownership to expats.

Benefits of starting a company in UAE free zone

Complete foreign ownership

100% direct tax free

100% repatriation of profit and capital

No personal income taxes

No currency restrictions

Highly developed infrastructure

High level of administrative support

Modern and efficient communication system  

Major free zones in UAE

JAFZA

DMCC

DAFZA

MEYDAN

IFZA

DIFC

SAIF

Offshore

An offshore company is a legal business entity that functions outside its registered jurisdiction with the intention to legally reduce tax payment. Businesses mainly opt for offshore company formation to gain confidentiality over one’s financial affairs and grow wealth without any interruption.

Setting up an offshore entity comes with numerous advantages; the major ones are-

Tax saving or deferral

Asset protection

Increased privacy

Risk management

A more favorable business climate

Less bureaucracy

Exchange convertibility

Nil restrictions on the remittance of profits and capital

Security of property rights

Confidentiality

Prominent Offshore Jurisdictions

 JAFZA Offshore, Dubai

 RAK Offshore

 Ajman Offshore

Business setup in UAE- Steps

Starting a business in UAE involves the following steps;

Selecting a business activity and an appropriate legal form

Registering the trade name

Applying for an initial approval

Drafting a Memorandum of Association and local service agent agreement

Selecting a location to setup the business

Taking additional government approvals

Submitting the required documents and paying the fee 

There are numerous factors that need to be taken of while setting up your business in the UAE. The documentation process, getting approvals and licenses from the authorities concerned, selecting business activity, location, etc, will not be an easy process for someone coming to the UAE for the first time and setting up their firm. For this, the assistance of a business consultancy firm can prove to be really beneficial. There are thousands of business consultancy firms in UAE; only the right one can help you set up your firm in UAE in a smooth and hassle-free manner.

Please refer our website for more details: hlbhamt.com/business-consultants-in-dubai-uae

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AUDIT SERVICES IN UAE

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The audit and assurance profession has been witnessing massive changes over the last couple of years, not just in the UAE, but across the world. There have been numerous regulatory amendments and with the advent of technology and the transformation has turned out to be huge. Complying with these changes and ensuring complete transparency has become the major priority for organizations.

Auditors in UAE play a key role in the growth of an organization. Prior to auditing any company, they take time to understand the entity; the area of their operation, their long-term strategy, organizational structure and any risks involved. Usually, an audit process involves four stages, which include planning, audit fieldwork, review and sign off. The planning phase involves meetings, reviews and identifying risk areas and issues. In the second stage, audit fieldwork, documents will be checked, inventory verification will be conducted and opinions from experts will be taken. In the 3rd stage, the process will be reviewed and in the final phase internal control improvements will be taken care of.

Auditing in Dubai, UAE

Article 27 of UAE Federal Law No 2 of 2015 states the requirement for every Joint Stock Company or Limited Liability Company in UAE to have one or more auditors to audit the Company’s books of accounts annually. Other types of entities can appoint an auditor under the provisions of this Law. Thus auditors in UAE play a significant role by reviewing a company’s books of accounts and financial statements to check for compliance with the laws and local and international accounting standards.

Statutory requirement of audit in UAE

· In accordance with the regulations of UAE, including VAT regulations and transaction law, every company should maintain their accounting records for at least 5 years from the end of each financial year. These records can be physical or electronic format. Moreover UAE Federal Law No 2 of 2015 and different Free Zone regulations, insisting the audited financial statements of each entity as a mandatory record for the entities.

· Public Listed companies should submit their annual audited financial statements to the respective stock exchanges in UAE by March 31st of each year.

· Central Bank regulated entities in UAE, that include banks, financial institutions, and exchange houses should submit their annual audited financial statements before March 31st the next year.

· Insurance companies and brokers that come within the scope of Central bank must submit their audited financial statements within four months from the end of fiscal year.

· Free zone authorities should submit their yearly audited financial statements to the regulating authority, which is usually 3 months or six months from the end of the financial year.

· Hotels operating in UAE must submit the yearly financial statements to the department of tourism, within a time span of 6 months from the end of the financial year.

· Branch of foreign companies must submit the yearly financial statements while renewing their commercial license.

Audit of Financial statements in UAE

Companies in UAE usually prepare their financial statements in compliance International Financial Reporting standards. These financial statements are evaluating by independent auditors using International Standards on Auditing, which stipulates the procedures and guidelines on how to conduct an audit of financial statements.

To ensure the accuracy of financial statements, businesses usually seek the assistance of a qualified external auditor, who usually examines the financial statements along with related disclosures given by the management. This helps them in providing professional opinion on the financial performance of the company over a period of time and the financial position as well.

A qualified auditor in UAE will usually analyze the business performance of the firm against the management objectives, evaluate the business processes and risks and also carry out a comparison with respect to industry standards. This way, the auditor will understand all the aspects of the client’s business.

With auditing being a mandatory process in UAE, the service of a qualified auditor can prove to be highly beneficial. There are numerous consultancies that provide audit services in, UAE, but choosing the right one who can provide a high quality professional service is indeed a challenge for the entities. HLB HAMT has been in the field of auditing for more than 2 decades and we have been successful in providing quality audits that have far-reaching benefits.

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HLB HAMT offers Accounting Services in Dubai, UAE & Advisory services entailing paramount quality account and financial record maintenance and customer support. Our accountants in Dubai will help you to significantly reduce the administrative burden and exuberant financial costs incurred. Read more: https://hlbhamt.com/accounting-services-in-dubai-uae