Any medical product entering Dubai must be registered by the UAE Ministry of Health and Prevention (MOHAP). Only licensed Drug Stores in Dubai can apply for registration of medical products though MOHAP. Moreover, only licensed Drug Stores can import medical products into the country. Also, local Pharmacies can buy registered medical products only from licensed Drug Stores in Dubai. So, having a Drug Store license is crucial to engage in medical products business on wholesale basis.

In the previous article we discussed the step-by-step process of setting up a Drug Store and legal basics. Once you register the company and obtain the Drug Store license from Dubai Economy and Tourism Department and Ministry of Health and Prevention, the company has to complete post-setup requirements and remain compliant with the applicable rules. In this article we will discuss the post-setup requirements including bank account, tax registration, filing and products registration and all critical for operating drug store in Dubai.

1.    Opening a Business Bank Account

Opening a business bank account is an essential yet challenging part of setting up your business in Dubai. Operating a Drug Store, like any other business, without a business bank account is almost impossible as most of UAE companies pay or receive payments only through bank. Cash transactions can be possible only to a limited extent.

Opening a business bank account requires proper preparation and diligence. UAE banks usually conduct strict due diligence on customers before onboarding, due to Anti Money Laundering regulations in place.

To apply for a business bank account:

• The authorized signatory has to be a UAE resident and be personally present in UAE to sign the application for bank account opening
• Apart from the standard company documents (i.e. License, MOA, Partners List etc.), the banks usually ask for proof of source of funds and source of wealth (e.g. bank statements, title deeds etc.)
• Business plan, Financial projections
• List of suppliers and customers
• Documents of shareholders, Directors/Managers
• An authorized signatory (e.g. passport, visa, EID copies, address proof, CV etc.).

2.    Corporate Tax Registration

All companies are required to register for UAE Corporate Tax through Federal Tax Authority (FTA) and obtain a Corporate Tax Registration Number as per the UAE Corporate Tax Law and following implementing decisions. The Corporate Tax rate is 9% that applies on the net profit exceeding AED 375,000 taxable profit per year. the penalty for late registration is AED 10,000, therefore, it is crucial to register for Corporate Tax as soon as the company is established.

3.    Value Added Tax (VAT) Registration

On the other hand, companies shall be subject to registration for Value Added Tax (VAT) based on its turnover. There is a voluntary registration threshold and there is mandatory registration threshold. A company must register for VAT on mandatory basis if the taxable supplies and imports exceed the amount of AED 375,000 for the last 12 months. A company may choose to register for VAT voluntarily if the total value of its taxable supplies and imports (or taxable expenses) exceeds the amount of AED 187,500 for last 12 months, but below the mandatory threshold. Failure to submit the application for VAT registration within 30 days of surpassing the required level of registration can result in an AED 10,000 fine. Proper VAT registration and filing are part of ongoing drug store compliance in Dubai.

4.    Medical Product Registration

Any medical product must be checked and registered with the Ministry of Health and Prevention (MOHAP) prior to importing to the UAE. Only licensed Drug Stores can apply for product registration to MOHAP.

MOHAP requires a set of documents such as:

• The manufacturing facility certificate
• Certificate of free sales (CFS)
• Product classification details
• Technical documentation
• Quality certificates
• Post-market surveillance plan
• Some other requirements depending on the medical product type

If the documents were issued outside the UAE, they must be legalized and attested by the UAE embassy/consulate and the Ministry of Foreign Affairs of UAE. After submitting full set of documents and payment to MOHAP, it reviews the application and documents, and either approves or returns the application, if additional documents or clarifications needed. Each product registration may take around 45-60 days.                                                                                                                                  

5.    Dubai Medical Warehouse Compliance Guide

Dubai has strict regulations for Drug Stores and Pharmacies alike, particularly regarding public health, hygiene and safety. Regularly inspect your warehouse facility to ensure compliance with MOHAP rules and requirements. Keep an eye on any changes in regulations to avoid penalties or disruptions to your Drug Store business.

6.    Final Thoughts

After setting up the Drug Store in Dubai, it is crucial to complete post-setup formalities to be fully operational. Understanding such post-setup requirements ensure that you stay complaint with applicable rules. By dealing with the right professionals who understand the requirements thoroughly and comply with rules, you can start your Drug Store operations smoothly.

Contact us today if you are planning to start your Drug Store business, or if you have established and need help with post-setup requirements.

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