18
Oct 2019
Dubai has a very stable political environment and a very understanding yet competitive business environment, and due to these reasons, most of the businessmen and entrepreneurs prefer setting up their business in Dubai. As the government is trying to reduce its dependence on the oil and gas sector, other sectors in Dubai are gradually gaining traction. The emirate of Dubai also has various free zones which focus on certain specific industries and allow the investors from around the world to assist in setting up a company in the industry.
One such Free Zone is the Dubai Multi Commodities Centre (DMCC) which focuses more on the companies which are into the trading and commodities sector.
DMCC
In the year 2002, the Dubai Government made a strategic initiative which resulted in the formation of the Dubai Multi Commodities Centre (DMCC). DMCC aims to provide all the services and infrastructure that a growing trading company can require to establish a solid base in the market. The DMCC does not only provide business opportunities in the UAE but also helps in spreading its influence in the surrounding GCC countries.
Advantages of DMCC
The DMCC offers various benefits, and as a result, there are more than 15,000 registered members as of 2018. It has been heralded as the number one global free zone for the fourth year consecutively by the FDi Financial Times Magazine. The various advantages offered by DMCC to the companies formed in the free zone are as follows:
- Strategic positioning of the Free Zone
- Straight forward licensing procedures
- World Class infrastructure
- 100% capital and profit repatriation
- Access to various commodities of exchange
- Secure business environment
- No restrictions of currency
- Exemption from Personal Income Tax and Corporate Tax
There are many other advantages provided by the free zone which assist the company in achieving the success envisioned by the management of the company.
Need for Audit in DMCC
We all know that conducting an Audit always improves the numbers in the report. Moreover, an audit will increase the credibility of a company’s report and will enhance the transparency among the employees of the company. The audit will also play a significant role in shaping the future of the company.
With these thoughts in mind, conducting an annual audit has been made mandatory for the companies that have been registered under the Dubai Multi Commodities Centre (DMCC). According to clause 62 of the DMCC Company Regulations, every company present in the DMCC and conducting business in DMCC must appoint an auditor. Another clause of the DMCC Company Regulations (Clause 64) states that the auditor appointed must make the annual audit reports of the company, which would be later shared with the investors and shareholders.
It is necessary for every company that has been registered in the DMCC to upload both the Audited Financial Statements of the company and the Relevant Summary Sheets to the internet portal of the free zone within 90 days after the ending of the financial year (almost three months). In some instances, the company may be awarded an extension for submitting the audited reports.
If the audited reports are not submitted within 90 days after ending the financial year or the specified time is given by the DMCC management, the DMCC may impose fines according to the DMCC Company Regulations. By not submitting the reports a risk of the non-renewal of the trading licence in the Free Zone.
Documents to be Maintained for Audit
A company can prepare itself for conducting an audit in the free zone by keeping some of the documents at the ready. These documents are given below:
- All the legal documents of the company such as the Memorandum of Association (MOA), the Articles of Association (AOA), Share Certificate, copy of the Trade License, the Tenancy Contract, Certification of Incorporation and many others.
- All the financial Books of Accounts such as Ledgers, Trial balances, Journals and the required financial statements of the company.
- All the required confirmations from the banks.
- Every statement of submission, the relevant invoices, purchases and expenses and the various other bills.
- Confirmation of balance from debtors, Creditors and other third parties depending upon the demand of the auditors.
- Any other information that may be required by the chosen auditor.
It is very clear that how conducting an audit will assist a company in reaching the heights of success. If you are looking for a reputed accounting firm which will handle all the requirements of your company, you should look into the services provided by JAXA Chartered Accountants. Our team of audit experts will take care of all the requirements of the company in the free zone as well as the Mainland. To know all about the various services provided by JAXA do contact us, we will be happy to help.