Accounting & Audit
RAVAD ZAKHR EDIN
Senior Business Consultant
All legal entities registered in the UAE are obliged, in one way or another, to keep track of their financial operations and maintain up-to-date information about their assets and liabilities. Being thoroughly familiar with the requirements of the Emirati law, international standards of accounting, as well as best practice of local and international business, our dedicated team of accountants will provide you with hands-on support and assistance throughout the financial year, on a daily, weekly, or monthly basis dependent on the specific needs of your business.
It is true that offshore companies in the UAE do not have to file their financial statements with any government authorities. Nevertheless, they do have an obligation at all times to keep documents related to their economic activities, and have them detailed enough to make it possible for the directors to accurately determine the company’s financial position.
This definition leaves much room for interpretation and adjustment, but we normally recommend it to our clients to keep management accounts. Being basically a simplified version of a financial statement, management accounts cost less both in time and fees, but leave no doubt or ambiguity as to the company’s financial particulars should a need arise to prove them. Naturally, our professionals will find no difficulty in preparing such accounts for your offshore company in the UAE.
ACCOUNTING FOR FREE ZONE COMPANIES
An entity registered in a Free Trade Zone within the UAE must keep accounting records sufficient to correctly ascertain its financial position, assets and liabilities. In some Free Zones such financial accounts are subject to mandatory audit and are to be submitted to Free Zone authorities along with an auditor’s report, while in others no audit is required.
Among the Free Zones that made it mandatory to have your financial statements audited, are:
… and others.
Meanwhile, if you are looking for a Free Zone with no mandatory audit, the following may be of interest:
The company’s first accounting period begins on the date of incorporation and lasts for no more than 18 months. Every subsequent accounting period lasts exactly 12 months from the end-date of the previous period. Financial statements must be approved by the Board of Directors and signed by at least one director within 3 months of the end of the financial year, and submitted to the government authorities in 30 days upon that. All in all, once a financial year is over, a company has up to 4 months to finalize, have approved by an auditor (where required), and submit its financial statement to the authorities. If you company owns more than a 50% share in any other entity or several of them, it would be required to prepare a consolidated financial statement for the whole group.
ACCOUNTING FOR MAINLAND COMPANIES
For every company registered in the UAE mainland, a financial statement shall be prepared each year and approved by an independent auditor. In its basic outline, the requirements are quite similar to those existing in Free Zones, with the natural exception that no mainland company is exempt from having its financial statements audited.
The first reporting period begins on the date of incorporation, and lasts from 6 to 18 months. From then on, each following reporting period would be 12 months as counted from the end date of the previous one. By the end of a reporting period, a company must finalize its financial statement and obtain an auditor’s report to approve it. This statement, along with the auditor’s report, is then to be presented at the general meeting of the shareholders within 3 months of the end of the financial year.
If a mainland company holds shares of 50% or more in other entities, it must prepare a consolidated financial statement to cover both its own particulars and those of its subsidiaries.
GET ADVICE BEFORE GETTING STARTED
Tax burden is an important factor to consider in planning your business in the UAE, and we would recommend that you seek professional advice to ascertain in advance all potential costs and administrative complexities. Choosing the right corporate structure for your business is also crucial, as it will have a lasting impact throughout your UAE company’s subsequent operation. Our dedicated advisors will be more than happy to assist you in this.
DUE DILIGENCE AND INTERNAL AUDIT
If you already have a running UAE company, our experienced audit team will be able to carry out Internal Audit to monitor and analyze its operational activities with a view to a streamlining and optimization of the existent business structure. If you have any plans to purchase, invest into, or deal with a company in the UAE, you may be interested in a comprehensive Due Diligence Audit to scrutinize all aspects of its financial position – in which you can rely on our assistance and support as well.
BASIC FEES FOR OUR SERVICES
|Advice on tax burden and corporate structure
|AED 660 (USD 180) / hour
|Keeping accounts and records of your company as a structured archive of financial documents. They will be available to you at any time upon request
|AED 660 (USD 180) / hour
|Drafting financial statements, arranging for an auditor’s approval, submission to government authorities
|AED 330 (USD 90) – AED 1 320 (USD 360) / hour
|Fee for an audited financial statement with a minimal number of transactions (for a dormant company)
|AED 5 4 55 (USD 1485)
The total fee for closing a financial year will depend on the quality, quantity, and complexity of the source documents you provide. We charge on a time-spent basis, with hourly rates ranging from USD 90 to USD 360 depending on the exact nature of work and the qualifications of the professional you would prefer to have assigned to it.