Experts have prepared useful material with information about fines for companies registered in the UAE.

I. The territory of the establishment of companies in the UAE

1. The mainland companies are established in accordance with the federal legislation of the UAE. Are not limited by the territory of activity in the UAE.
2. Free zone companies are established in accordance with the legislation of the free economic zones of the UAE. Limited in their activities in the UAE by the borders of the Frison.

II. Regulation of companies in the UAE

1. 1. UAE Companies Law No. 32 (Federal Decree-Law No. 32/2021 dated 20.09.2021):

• Regulates companies in the Mainland
• As a general rule, it does not apply to companies in free zones
• It can be applied to companies in the free zones if these companies can carry out activities in the Mainland and/or in relation to legal relations not regulated by the laws of the free zones

2. 2. The law on companies in each free zone (for example, COMPANIES LAW DIFC LAW NO. 5 OF 2018)
3. 3. By-laws (Decisions of the Cabinet of Ministers, Regulations, etc.)

III. Responsibility

Section 11 of Federal Decree-Law No. 32 on Commercial Companies

Intentional introduction of false information in company documents (for example, in the MOA) – Article 346	Imprisonment for 6 months – 3 years and/or a fine of 200 thousand – 1 million AED
Intentional assessment of a contribution to capital in excess of market value – Article 347	Imprisonment for 6 months – 3 years and/or a fine of 200 thousand – 1 million AED
Concealment of the actual financial situation of the company (for example, false information in BS, PL) – Article 349	Imprisonment for 6 months – 3 years and/or a fine of 100 thousand – 500 thousand AED
Unfair use of confidential information about the company – Article 354	Imprisonment for up to 6 months and/or a fine of 50 thousand – 500 thousand AED

UAE Cabinet of Ministers Decision No. 102/2022
(used in the Mainland, not used in free zones)

Gradation of punishments in case of “relapse”:

The first violation is a written warning and 30 days to eliminate it

The second – the amount of the fine in a single amount

The third –  the amount of the fine x2

The fourth –  the amount of the fine x3 + suspension of activity for up to 6 months with the possibility of a one–time extension

Suspension of licenses/permits in case of refusal of compensation for damage caused by illegal actions

Non-execution of the decision about the change of the name (the name is disputed or contradicts the law or on its own initiative) – article 12	Fine 500 – 5000 AED for each month 30 working days – the period of voluntary execution from the moment of notification
Absence of accounting registers for the last 5 years – Article 26	Fine 10,000 AED
Absence and/or non-provision to interested persons of the minutes of the General meeting of shareholders, the MOA, the register of shareholders	Fine 1000 AED
Failure to provide documents when checking the company	Fine 5000 AED
Violation of other provisions of the Federal Decree-Law on Commercial Companies that are not subject to fines	Fine 10,000 AED
Conducting the activities of a foreign company in the UAE without proper registration (branch, license)	Fine 100,000 AED
Conducting commercial activities by a representative office of a foreign company in the UAE	Fine 50,000 AED

UAE Cabinet of Ministers Decision No. 58/2020
(used in the Mainland, as well as in free zones, except for DIFC, ADGM)

Responsibility for not having the UBO registry	The first violation – a warning The second – a fine of 50,000 AED The third – a fine of 100 000 AED and suspension of the lice nse for at least 12 months
Responsibility for not having the register of shareholders	The first violation – does not exist The second – a fine of 50 000 AED and an order to eliminate the violation within 60 days The third – a fine of 100 000 AED and suspension of the license for at least 12 months

Cabinet Decision No. 40/2017
(applicable in the Mainland and in the free zones)

Lack of tax accounting	The first time – a fine of 1000 AED In case of subsequent violations – a fine of 2000 AED
Failure to provide information regarding tax obligations in Arabic (if required)	Fine 20,000 AED
Late filing of a tax return	The first time – a fine of 1000 AED In case of subsequent violations – a fine of 2000 AED

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