Substance and Compliance

UAE legislation requires resident companies to meet the requirements of “economic substance”, demonstrating that their business operations are actually being carried out in this jurisdiction. A company that fails to meet these requirements may be considered a shell company and become an undesirable client for banks or an unreliable partner in the eyes of business associates.

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For successful work with banks not only in the UAE but throughout the world, the company must work in the country of registration. Otherwise, such a company will be recognized as a shell company, which puts an end to the prospect of opening a corporate account for it in a decent bank.

For a company to be a desirable client for a bank, it must have substance – that is, confirmation of real economic activity in the country of registration.

  • Office search for the company
  • Renting an office in a business center or a separate office for a company
  • Connecting a telephone line and all communications to the office
  • Search and hiring of personnel. Advice on labor law in the UAE, assistance in the registration and dismissal of employees
  • Assistance in the preparation of documentation on the work of the company – contracts, invoices, and other documents.

If necessary, the employees of our company will help you in creating a corporate website, e-mail, and much more.

The compliance procedure is the process of checking the legality of the origin of assets with which it will work, and the identity of the final beneficiary. The purpose of the procedure is to make sure that the funds that will go to the bank account are earned honestly and are not related to the arms trade or drug trafficking, have not been withdrawn from taxation, and are not in the sanctioned bank

Nowadays, banks contain entire compliance departments that look for information about potential customers in various registries, databases and on the Internet. In addition, at the request of the employees of the department, the client must provide documents confirming everything said by the client. Such documents can be called Compliance dossiers.

The Compliance department wants to make sure that the potential client’s business is real, it is legal, the working capital is honestly earned, and the owner of the company himself is not a politically exposed person (PEP).

Based on this, the Compliance dossier may include the following documents:

  • Tax reporting on the past business of the client, which will confirm the purity of the origin of capital;
  • Salary statements for recent years
  • Contracts with counterparties
  • Corporate or personal website: many banks believe that it is impossible to do business in the 21st century without a virtual representation on the Internet
  • Transaction history (if the company is already doing business and has been serviced by other banks)
  • Beneficiary’s CV
  • Documents confirming the fact of ownership of immovable/movable property, shares/corporate rights of other companies
  • Income tax returns for previous years
  • Documents confirming the facts of the sale of property, etc.

This is not a complete list of what may be included in the Compliance dossier. The presence of all of the above will facilitate the opening of an account, but by no means guarantee anything – modern banks do not make decisions automatically. Therefore, to undergo the Compliance procedure at the bank, we strongly recommend that you turn to professionals!

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