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CBS International,
P.O.BOX:25498, Dubai, U.A.E
Phone: +971-4-352-0771
Fax: +971-4-353-6420
E-mail: info@cbsuae.com

What You Need To Know About Free Zone Audits

Listed Auditors In Freezone

The free zones are places located across the UAE that have certain attractive business and trade incentives, compared to organizations situated in the city limits of the any of the emirates.

Having your business situated in the free zone gets you many opportunities from the government, makes compliance easy, and most of all, makes it easier to set up and run the business.

This does not mean however, that free zone companies do not have to comply with a set of requirements at all.

Even though these are very different from companies located in the mainland, enforcement of the rules is strict, and can leave organizations vulnerable to fines and other penalties.

Audit Requirement

According to the applicable laws in the UAE, it is compulsory for free zone companies to have their financial records audited from competent and listed auditors in Dubai.

They are required to produce audited accounts on a yearly basis, and failure to do so can lead to difficulties in the renewal of the trading license, among other penalties.

Apart from the concerned federal and emirate laws, each company has a document called the Articles of Association that it was incorporated under.

This document too, lays out the requirement to keep accurate financial records, and undertake audits.

Yet, there are many companies that do not take this task seriously, or simply ignore it.

The Need For Audits When There Is No Tax

Many people feel that the need for audits even though there is no corporate tax in Dubai does not make sense.

While this makes sense as a general statement, the truth is UAE is not totally free from taxes certain businesses can be made to pay.

There are certain foreign organizations that are subject to the requirement of corporate tax, and many hospitality businesses have to pay municipality taxes as well.

Although most other commercial organizations are exempt from paying corporate tax, this does not mean they should totally ignore the maintenance of their financial records.

Abdul Hussain & Associates

How Audits Benefit The Company Itself

One of the most important reasons companies should start to pay more attention to this process is the numerous benefits it can produce for them.

The leading one among these is the role this compilation can play in making better decisions.

Since the audit produces an accurate picture of the financial status of the company, including its profit and loss figures, and other things such as assets and liabilities, it can make financial choices much easier.

Representations To Banks

Accurate financial records and audits can also improve the borrowing power of commercial organizations.

Having everything kept up to date and in order means banks and other lending organizations will be more likely to approve loans and financing schemes.