Auditing in Dubai Freezones
Countless entrepreneurs establish their companies in the Dubai free zones to reap unparalleled benefits. Some of these advantages include easy approvals, tax benefits, total foreign ownership, and swift incorporation at lesser costs. Although the benefits are tenfold, investors need to ensure they do not overlook any requirements that are mandatory for auditing in Dubai free zones. Most free zones have mandated the companies licensed by them to submit annual reports to the free zone authority which requires your company to get the proper auditing services in Dubai freezones from the approved auditors.
Is Auditing Mandatory in the Dubai Free Zones?
All businesses must register under free zones to conduct an annual audit and submit it to their respective authorities. Failing to do so may lead to severe consequences, and in the worst cases, a registered business will be penalized with a behemoth fine. Therefore, businesses must conduct audits in the free zone to avoid unnecessary fines and penalties.
Why Free Zones Companies Must Submit Audit Reports?
Auditing is not necessary for all free zone companies as free zone authorities do not require branches of local and foreign companies to submit audit reports. However, certain entities operating in the free zones need to provide a mandatory audit of accounts. This includes company types, such as FZCO and FZE, to submit audit reports. If they fail to do so, they face the risk of non-renewal of the company license.
Audited Statements Submission Complying With the DDA Regulations
Dubai Development Authority (DDA) was founded to facilitate Dubai’s future economic growth. The organization offers businesses a chase to grow in an active business environment that encourages constant growth. The organization is helping improve quality of life by improving economic competitiveness and setting global standards.
According to 2016 DDA regulations, the entities authorized by the authority must ensure their accounting records and books for an average of eight years. Another requirement includes its conformity to Standards of accounting as approved by the administration. Typically, companies abide by international financial standards as the UAE has no locally established rules.
Businesses registered under the DDA must file their latest financial statements with a summary sheet by October 31st, 2022.
Submission of Dubai Free Zone Audit Reports 2022
Free zone businesses in Dubai are expected to submit their most recent Audited Financial Statement by or before November 30th, 2022. All companies must submit their Audit Financial Statement within six months from the financial year-end. Newly registered companies that haven’t yet finished their financial year are required to provide the Audited Financial Statement within six months from their first financial year-end. The submitted Statements are carefully scrutinized by the Authorities, and a lack of compliance may lead to consequences.
Which Dubai Free Zones Must Submit their Audited Financial Statements?
Some Dubai free zones must be audited by approved and registered auditors in Dubai, UAE. Free zone companies that ignore this requirement and do not submit their Audited Financial Statements may incur penalties or worse consequences, such as non-renewal of trade licenses. This mandatory requirement exists in multiple free zones, including:
- Dubai Internet City
- Dubai Design District
- Dubai Production City
- Dubai Outsource City
- Dubai Media City
- Dubai International Academic City
- Dubai Studio City
Where to Submit Audited Statements?
Free zone companies are required to prepare and submit their Audited Financial Statement and Annual Return each financial year, collectively called Audited Financial Statement. These consolidated Audited Financial Statements are submitted to the governmental authorities as per the free zone jurisdiction.
Economic Substance Regulations (ESR) Submission in Dubai Freezone
Any DMCC-licensed company conducting activities in the UAE must prepare and submit the ESR Report to the regulatory authorities. The businesses must note that it is mandatory to submit the ESR report to the DMCC authority within a 12-month period of the financial year-end. The companies must include the details of the economic activities, income, expenses, and assets in the report. Consolidated group reporting is not allowed, so the companies part of a corporate group need to submit the report separately. The ESR in DMCC is an annual process, and companies in the free zones should take assistance from auditing services in Dubai free zones to ensure compliance with the regulations.
How Can Approved Auditors in Dubai Free Zones Help You?
Auditing the accounts is mandatory for companies licensed by and operating in the Dubai free zones. Companies must maintain their financial records for at least five years and have them audited and approved by auditors in Dubai. Most free zone authorities maintain a list of approved auditors updated periodically. Approved auditors can help you evaluate whether or not your accounting records are proper. Your business needs accurate auditing services in Dubai Freezones from experienced professionals. They also assist you in ensuring whether your accounts match the accounting records and if your statements are prepared in compliance with the International Financial Reporting Standards.
How does Avyanco Auditing LLC Helps Your Free Zone Company?
Avyanco Auditing LLC is one of the leading audit firms in the Dubai. We are registered and approved with all the major free zones in the Dubai. Our expert team of auditors provides thoroughly prepared annual reports fulfilling the requirements of the free zone.
Avyanco entails an impartial and unbiased analysis of the company’s financial statements and offers auditing services in Dubai free zones. Our internal audits benefit the company by revealing any fraudulent activities that may be occurring within the organization. Our tax consultants in the UAE assist you in preparing all the necessary documents for your tax audit. We ensure your business statements comply with the tax regulations in their taxable transactions. The team of auditors at Avyanco helps you examine all essential documents, financial reporting, and accounting books to ensure maximum compliance with free zone compliance to avoid any penalties and fines.