Free zone audit reports in the UAE for licence renewal
Many UAE free zone authorities ask companies to submit audited financial statements each year, often as part of licence renewal. We prepare your accounts, prepare your audit report with an audit firm on your free zone's approved list, and help you submit on time. We work with companies in DMCC, JAFZA, DAFZA, IFZA, RAKEZ, Meydan, SHAMS and other free zones.
Who needs this
- Free zone companies with a licence renewal coming up
- Companies whose free zone portal is asking for audited statements
- Businesses applying the 0% Qualifying Free Zone Person rate for corporate tax
- Free zone branches and subsidiaries of foreign groups
- Companies that missed last year's audit and need to catch up
- Low-activity companies unsure whether their free zone still needs an audit
What's included
- Check of your free zone's current audit and submission requirements
- Bookkeeping clean-up and year-end close
- Draft financial statements with supporting schedules
- Your audit report, prepared with an audit firm on your free zone's approved list
- Preparing the audit file and answering auditor queries
- Help uploading the audited statements to your free zone portal
- Review of Qualifying Free Zone Person conditions: substance, de minimis and transfer pricing records
Documents we'll ask for
- Free zone licence and certificate of incorporation or registration
- Share certificate and shareholder register
- General ledger and bank statements for the full financial year
- Sales and purchase invoices and key contracts
- Related-party and intercompany agreements
- Previous year's audited financial statements, if any
How it works
- Step 1
Confirm the requirement
We check what your free zone authority currently asks for, when it is due relative to your licence renewal, and which auditors it accepts.
- Step 2
Get the accounts ready
We close your financial year, reconcile every balance and prepare draft financial statements with the schedules an auditor will ask for.
- Step 3
Audit by an approved auditor
We prepare your audit report with an audit firm on your free zone's approved list. We hand over the file and deal with their questions until the report is signed.
- Step 4
Submit and renew
We help you upload the audited statements to your free zone portal and keep a copy ready for your corporate tax return.
Why free zones ask for audited statements
Free zone authorities regulate the companies registered with them. Audited financial statements give the authority an independent view that a company is trading as licensed and keeping proper records. For many companies, the audit has to be in place before the licence can be renewed.
The rules are not the same everywhere. Some authorities ask for audited statements at renewal, others by a set date after your financial year ends, and some treat certain licence types differently. Rules also change over time. We check your authority's current requirement for your licence before we plan the work.
The auditor matters as much as the accounts. Free zone authorities generally accept audit reports only from auditors on their approved list, and those auditors must also be approved by the Ministry of Economy. A report from an auditor who is not on the list may not be accepted.
Requirements across DMCC, JAFZA, DAFZA, IFZA, RAKEZ, Meydan and SHAMS
Long-established Dubai free zones such as DMCC, JAFZA and DAFZA have required annual audited financial statements from most registered companies for many years, submitted through their online portals. The authority usually expects the statements before or at renewal.
Newer and multi-activity free zones such as IFZA, Meydan, SHAMS and RAKEZ set requirements by licence type and activity, and several have tightened them in recent years. If your company is in one of these zones, do not rely on what applied when you set up. Ask us to confirm what applies to your licence now.
Whatever your free zone's own rule, corporate tax can still require an audit. If your company wants to be treated as a Qualifying Free Zone Person, audited financial statements are required regardless of what the free zone asks for.
Audited accounts and the 0% free zone rate
A Qualifying Free Zone Person can apply 0% corporate tax on qualifying income and 9% on non-qualifying income. The conditions include adequate substance in the free zone, audited financial statements, compliance with transfer pricing rules, and meeting the de minimis rule.
The de minimis rule says non-qualifying revenue must not exceed 5% of total revenue or AED 5 million, whichever is lower. Your accounts need to separate qualifying and non-qualifying income clearly so this can be shown. We set up your revenue accounts with this split in mind before the audit starts.
Small Business Relief is not available to Qualifying Free Zone Persons. Every free zone company must register for corporate tax and file a return, so we help you decide which treatment applies to you and make sure the audited accounts support it.
Free zone audit report costs
Our audit report fee is set by your annual turnover and covers the audit report prepared with an approved audit firm. Prices are per year, in AED and excluding 5% VAT.
Turnover up to AED 3 million: AED 2,000. AED 3 to 5 million: AED 3,000. AED 5 to 10 million: AED 3,500. AED 10 to 20 million: AED 4,500. AED 20 to 30 million: AED 5,000. AED 30 to 40 million: AED 5,500. AED 40 to 50 million: AED 6,000. Over AED 50 million: custom quote.
If you have missed one or more previous audits, or your books need catching up first, we quote that work after a short review so you can see the full cost before you start.
Penalties and risks to avoid
Losing the 0% rate
Audited financial statements are a condition for Qualifying Free Zone Person status. Without them, the 0% rate on qualifying income cannot be applied.
Late corporate tax registration
Free zone companies must register for corporate tax like any other company. The penalty for late registration is AED 10,000.
Breaching the de minimis rule
If non-qualifying revenue exceeds 5% of total revenue or AED 5 million, whichever is lower, the de minimis condition for the 0% rate is not met.
Questions about free zone audit
Do free zone companies need an audit?
Many do. Several UAE free zone authorities require audited financial statements each year, and Qualifying Free Zone Persons need them for corporate tax. Check your authority's current rules for your licence type, or ask us to confirm.
Does a DMCC company need audited financial statements?
DMCC has long required most registered companies to submit audited financial statements each year through its portal. Confirm the current requirement and deadline for your licence before your renewal date.
Can any auditor sign my free zone audit?
No. The auditor generally needs to be on your free zone authority's approved list and approved by the Ministry of Economy. We prepare your audit report with an approved audit firm that meets your authority's requirement.
When do I need to submit audited statements?
It depends on your free zone. Some link the deadline to licence renewal and others set a date after your financial year ends. We confirm the date for your company at the start.
How much does a free zone audit cost in Dubai?
Our audit report starts from AED 2,000 per year (excl. VAT) for turnover up to AED 3 million. The fee rises by turnover band, and companies above AED 50 million get a custom quote.
Does a Qualifying Free Zone Person need audited accounts?
Yes. Audited financial statements are one of the conditions for applying the 0% rate on qualifying income.
My company had no activity this year. Do I still need an audit?
Possibly. Some free zones still require audited or other financial statements from low-activity companies. You also still need to file a corporate tax return. We check your authority's rules and advise you.
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