A Guide to Audit Requirements for Companies in DMCC Free Zone
Getting a trade license from free zones in Dubai offers you immense benefits such as 100% foreign ownership, world-class facilities and infrastructure, strategic location, exemption from import duties etc and above all one-stop services. However, you need to also ensure compliance with the regulations set out by the free zone authority to enjoy the benefits. The Dubai Multi Commodities Centre (DMCC) free zone authority has also set a series of regulations for business owners and the submission of audited financial statements is one of the mandatory requirements for the DMCC member companies.
You can consult with DMCC-approved auditors in Dubai to understand more about the audit requirements in the free zone. Read ahead to know further about the audit requirements for companies registered with the DMCC free zone:
Is It Mandatory to Submit the Audited Financial Statements to Dmcc?
Companies registered with the DMCC free zone must get their financial statements audited without fail. As per the DMCC implementing regulations, a DMCC member company is required to submit audited financial statements. The submission of audited financial statements is required for the renewal of their trade licenses.
Submission of Audited Financials is applicable to all DMCC companies including subsidiaries and branch companies. The companies in DMCC can hire the best audit firms in Dubai to get their financial statements audited.
When to Submit the Audited Financial Statements to the Dmcc Authority?
As per the DMCC regulations, a company registered with the free zone must submit its audited financial statements within 180 days after the end of each financial year. Companies providing audit services in Dubai can help you with the audit report submission process.
Is It Mandatory to Hire DMCC-Approved Auditors to Do the Audit?
DMCC has issued an Approved Auditors Rules (AAR) on January 12th 2017. As per AAR, each DMCC member company need to ensure that their appointed auditor is registered as an approved auditor in DMCC. Moreover, you need to ensure that the auditor is listed in the DMCC Approved Auditors List (AAL). However, these rules are not relevant to a company registered in DMCC as a branch company provided that the company has a group auditor.
When to Submit the Audited Financial Statements to the DMCC Authority?
According to the implementing regulations, a company registered with the DMCC Authority is required to upload the auditor’s signed and stamped Audited Financial Statements Summary Sheet and the Audited Financial Statements Report via a designated online service request on the member portal. Consult with the best audit firms in Dubai to understand the process better.
What Records Are Necessary during a Company’s Audit?
While conducting an audit, the DMCC-approved auditors may ask the management to provide certain documents. Such documents facilitate the auditor’s job to derive an opinion on the company’s financial position. You need to provide the following documents during an audit:
- Bank statements
- Credit/debit confirmation slips for all financial transactions
- Copies of bills and invoices
- Statement of deposits from the DMCC portal
- Memorandum of Association (MoA)
- Articles of Association (AOA)
- Latest trade license
- Registration Details for VAT and excise tax
Why You Should Carry Out an Audit in DMCC?
The auditor’s report will assure the Authority that the company’s financial statements have been prepared as per local and international standards such as the IFRS. Companies need to get their books of accounts audited by DMCC-approved auditors for the following reasons and benefits:
- To comply with the DMCC regulations
- To get their trade license renewed
- To understand the company’s financial position
- To increase the shareholder’s confidence
- To improve internal controls and procedure
- To increase credibility in front of banks, the government & potential investors
- To detect any act of fraud
- To avail of any free zone incentives and exemptions granted as per the UAE Corporate Tax Law
What Happens if You Fail to Carry Out an Audit in DMCC?
Failing to submit the audited financial statements will be considered a compliance failure. The DMCC Authority will not renew your trade license if you fail to submit the audited financial statements to the Authority. Consult with approved auditors in DMCC for more information on the consequences of not submitting the audited financial statements.
Hire Approved Auditors in DMCC to Ensuring Compliance
DMCC-approved auditors such as Jitendra Chartered Accountants (JCA) can help you to submit your audited financial statements to the free zone authority within time. JCA can ensure that the financial statements are prepared as per the local and international reporting standards. JCA is one of the few audit firms in Dubai with more than 21 years of experience. We are registered with the DMCC as an approved auditor and can help you comply with your annual financial audits.