The government of many countries has understood that it is imperative for the survival and development of an economy to attract and allow businesses from all around the world to establish a business in the country. To accomplish this, many different steps have been taken by the governments of the various countries.
The government of the United Arab Emirates has taken the initiative to set up numerous free zones which will allow a business to establish and conduct their business without worrying about taxation. These free zones will also provide a number of advantages and assistance during the course of the business. One such free zone is the Dubai Multi Commodity Centre (also known as DMCC).
Dubai Multi Commodities Centre (DMCC) is one of the largest free zones in the UAE and is also a global trading and financial hub, which is located in Jumeirah Lake Towers (JLT). The DMCC has a vibrant community and stunning properties which add to the experience of setting up a company in DMCC.
The DMCC provides a suitable location for all businesses and allows them to access the markets of the United Arab Emirates. The free zone also acts as a gateway for the businesses to the other markets in the Middle East. As the government of UAE is trying to focus more on the non-hydrocarbon sector, it is providing lots of benefits to businesses that are being set up and registered in the UAE.
If you have or are planning to set up your business here, here’s a handy guide for all your auditing requirements.
Has Auditing been made Mandatory for a Company in DMCC?
Yes, it is compulsory to conduct an Audit for a company in the DMCC. To that end, every company in the DMCC free zone is expected to maintain its audited financial reports for the past 5 years. In case the business fails to submit the required documents to the free zone authority, it could be penalized for up to AED 5,000 or the trade licence could be rejected at the time of renewal.
Anyhow, after the introduction of Value Added Tax in 2018, financial auditing has been a great help in maintaining all the necessary documents required by a company and also serves the additional purpose of helping the business file VAT at the end of every tax period.
What is the Benefit of Auditing for my Company?
Auditing in DMCC (Dubai Multi Commodities Centre) ensures that all your financial records are accurate and well maintained. This will help you in staying on top of the financial health of the company. It is only at the end of every quarter that you’d realize what a boon Auditing is for Planning & Budgeting. After the analysis of all the documents, the management can make the required changes and can be rest assured that cash flows and borrowing capacity of the business are in order.
When should be the Financial Reports submitted in DMCC?
The company which has been established must submit the financial statements to be audited by a DMCC Approved Auditor within 90 days of the financial year ending of the company. In case this deadline is not followed by the company, then the company may be fined and can be penalized by not renewing the business trade licence of the company.
What is the Audit Process for a Company in DMCC?
A company in DMCC is required to maintain all its financial records for the past 5 years. It is also advisable that these documents of the company are audited periodically which will prevent any sudden surprises at the end of the financial year when the documents are submitted to the DMCC authority. Here, one thing you need to check is that the financial audit is conducted by an approved auditor who is licensed by the Ministry of Economy and approved by the DMCC authority.
There are many advantages of having the business audited as it assists the company management in understanding the present financial condition of the company as well as it also helps to maintain the financial records of the company which come in handy at the time of filing the taxes.
What Records are required during the Auditing of a company?
In order to Audit your company in DMCC, your auditor will require the following documents. These documents should correspond to the period in which the audit is being conducted:
- Bank Statements
- Credit/Debit confirmation slips for financial transactions
- Copies of Bills and Invoices
- Statement of Deposits from the DMCC portal
- Memorandum of Association (MoA)
- Articles of Association (AoA)
The Authority in DMCC has the power to ask for any required document from the client during the time of audit if the need arises.
How can JAXA Chartered Accountants help your Business?
We at JAXA Chartered Accountants can assist you with all your auditing and accounting needs in DMCC. We are DMCC approved auditors and have been assisting hundreds of firms with their audit in the DMCC Free Zone. Our team of veteran chartered accountants go beyond traditional fundamentals and add tangible value, seeing to it that auditing assumes a strategic and productive role in today’s corporate governance environment. We also identify areas for improvement and suggest means to help you to achieve your organizational objectives and make a positive contribution to the successful operation of your business. For your company audit in DMCC, do contact us – we’d be happy to assist!