Our management team at UAE Business Solution recently attended a seminar at the Dubai Chamber of Commerce, where changes to the UAE Companies Law were outlined. Of particular interest to us was the news that all onshore companies in the UAE will now be required to keep accounting records for 5 years at their place of business. The new law came into effect from July 2015 with companies having a 12 month grace period to make themselves compliant.
This is fantastic news for those of us who strongly believe that companies should maintain accurate financial information and it should provide a greater level of confidence in the UAE business community. Business owners will also have a greater understanding of their business models, breakeven points, profitability and liquidity.
What will the financial impact be for business owners who have previously failed to prepare accounting information?
There will be investment required for accounting software and also a bookkeeper or accountant. These will be new costs to the business and a rough estimate would suggest an annual cost of 80,000 AED. This cost estimate takes into account salary, end of service gratuity, visa processing fees, annual flight ticket and holiday pay.
The cost of compliance might seem high for an SME (small to medium enterprise) but there is an alternative. Outsourcing accounting to a third-party can save up to 40% of the costs outlined previously. Outsourced accounting also means not having to recruit a full-time member of staff and compliance with the new law can be achieved smoothly and professionally.
If you would like to discuss your accounting requirements in line with the new Companies Law regulation, please contact us today.[contact-form to=’email@example.com’ subject=’UAE Companies Law’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Mobile’ type=’text’ required=’1’/][contact-field label=’How can we assist you?’ type=’textarea’ required=’1’/][/contact-form]