Corporates and startups are increasingly drawn to establishing businesses in UAE Free Zones due to the array of benefits they offer, including tax incentives. However, it's crucial to note that Free Zones are overseen by Free Zone authorities, and businesses are required to submit annual audit reports to these authorities. In such instances, businesses can rely on auditors and audit firms approved by the UAE Free Zone authority.
Innovate Accounting is a registered audit firm in Free Zone UAE, providing audit services in Free Zones UAE in compliance with regulations. UAE features multiple special zones known as Free Zones, each governed by its own set of laws, rules, and regulations pertaining to tax, operations, imports, and other aspects, tailored for the smooth functioning of these Free Zones.
Auditing in UAE Free Zones
An audit in a UAE Free Zone entails a thorough review and examination of a company's financial records and statements to ensure compliance with the accounting standards and regulations stipulated by the Free Zone authority. Typically conducted by an approved auditor or audit firm sanctioned by the Free Zone authority, the audit aims to provide stakeholders with assurance regarding the accuracy and reliability of financial statements.
Companies registered in Free Zones holding a Free Zone trade license must submit audited annual financial statements for license renewal. Free Zone companies have the flexibility to choose their financial year, provided it commences from the date of incorporation and spans between 6 to 18 months.
Is Audit Mandatory for UAE Free Zones?
In the UAE Free Zones, audits are obligatory for companies surpassing specific turnover thresholds or maintaining a certain number of employees. Non-compliance with audit requirements can lead to penalties or fines imposed by the Free Zone authority.
To avert fines and penalties, conducting a Free Zone audit is imperative. Innovate Accounting stands as one of the foremost audit firms in the UAE.
For companies seeking audits in DMCC Freezone, Innovate Accounting UAE offers a professional and customized audit approach. Contact us today for your company's audit needs.
Audit Submission Penalty in UAE Free Zones
The penalty for failing to submit audit statements in UAE Free Zones varies depending on the specific Free Zone authority and the level of non-compliance. Fines in UAE Free Zones typically range from 2500 AED to 5000 AED, contingent upon the Free Zone and duration of non-compliance.
Non-submission of requisite audit statements within the stipulated timeframe for UAE Free Zones may lead to fines, penalties, and potential suspension or cancellation of the company's trade license.
