Mandatory Requirements for Businesses in Free Zones and Mainland

What Is a Financial Audit?

A financial audit is an independent review of a company’s accounting records and financial statements to verify their accuracy and compliance with International Financial Reporting Standards (IFRS).
 In the UAE, audits are not optional — they are legally required and governed by regulatory authorities. Under Federal Law No. 32 of 2021 (UAE Commercial Companies Law), all Limited Liability Companies (LLCs) and joint-stock companies must appoint one or more auditors each year to examine their accounts. Companies must also prepare annual financial statements — including a balance sheet and profit & loss report — in accordance with IFRS.

Why Audits Are Important

  • Legal and regulatory compliance (DED, FTA, and free zone authorities)

  • Required for license renewal, particularly in free zones

  • Increases trust among investors, partners, and banks

  • Facilitates access to credit, VAT filings, and corporate tax compliance

Audit Requirements in Free Zones

Who Is Required to Undergo Audit?

Almost all companies registered in UAE free zones are required to submit audited financial statements annually. While exceptions may apply to micro-businesses in some zones, most free zones mandate annual audits either universally or once revenue or asset thresholds are crossed.

For example, IFZA (International Free Zone Authority) requires every company to maintain accounting records and submit audited financials within 9 months of the end of the financial year, using an auditor approved by IFZA.

Free Zone Audit Rules

In major free zones like DMCC, JAFZA, DAFZA, DIFC, RAKEZ, ADGM, an annual audit is mandatory to renew your trade license. Companies must select an auditor from the zone’s approved list.
Deadlines vary by zone — typically from 90 days to 9 months after the fiscal year ends.

Example: DMCC

  • Audit report must be submitted via the DMCC portal within 180 days after financial year-end

  • Late submission results in AED 5,000 fine and suspension of portal access

  • No audit — no license renewal

Why Free Zones Enforce Audits

  • To ensure transparency and financial health before renewing licenses

  • To validate 0% corporate tax eligibility under “Qualifying Free Zone Person” status

  • To detect accounting issues and prevent financial or compliance risks

Consequences of Not Conducting an Audit

  • Fines and license suspension

  • Ineligibility for license renewal — making company operations illegal

  • Risk of license cancellation for non-compliance

  • Loss of credibility with banks, investors, and partners

Audit Requirements for Mainland Companies

General Obligations

Onshore businesses are regulated by the Department of Economic Development (DED) in each emirate and must comply with Federal Law No. 32 of 2021. All LLCs and joint-stock companies must appoint licensed auditors annually and prepare IFRS-compliant financial statements.

“Audit in the mainland is not a company’s choice — it’s a legal requirement.”
— Irina Ryzhakova, Legal Advisor

Important:
Some emirates may not request an audit report at the time of license renewal. This does not exempt a company from the legal obligation to conduct an audit. Authorities (like DED or the Ministry of Economy) may demand audited records at any time.

When an Audit Report May Be Requested

  • By DED or the Ministry of Economy

  • During investor due diligence

  • When selling a company share

  • During tax audits by FTA

  • During company liquidation

Without a valid audit, these actions may be blocked, and penalties imposed.

The Practical Value of Audit for Mainland Companies

  • Essential for opening corporate bank accounts

  • Required by investors and partners

  • Supports accurate corporate tax filings with the FTA

  • Enables informed business decisions based on reliable financial data

Risks of Non-Compliance

  • Fines up to AED 10,000,000 for executives

  • License suspension or cancellation

  • Freezing of bank accounts during compliance reviews

  • Long-term damage to business reputation

How a Professional Accounting Firm Can Help

Audit involves deadlines, legal knowledge, and financial precision. Working with a professional firm helps ensure compliance and reduces risk.

What We Offer:

  • Licensed Auditors
    Make Fortune works with licensed auditors approved by all major free zones: DMCC, JAFZA, DAFZA, RAKEZ, ADGM, DIFC, and others. Our audit reports are recognized by all regulatory authorities.

  • Regulatory Expertise
    We’re up to date with DED, FTA, and Ministry of Economy requirements and ensure your reporting meets current UAE laws and IFRS standards.

  • Timely Delivery
    We plan audits in advance, manage deadlines, and help avoid fines or license delays.

  • Error Reduction and Compliance Advice
    We don’t just audit — we highlight inaccuracies and suggest corrective actions to prevent compliance issues with FTA and DED.

  • Full-Service Support
    We assist clients at every step — from document collection to submission through portals like DMCC or DED. We handle regulator interactions on your behalf.

  • High-Quality Reports
    You receive clear, well-structured, IFRS-compliant audit reports — ensuring both compliance and a professional financial profile.

Why Audit Should Be Done with Accounting Support

Audit is a mandatory part of license renewal in both free zones and mainland UAE. Skipping it can lead to fines, license blocks, and service disruption.

Working with a trusted audit partner like Make Fortune ensures your audit is completed accurately, on time, and fully compliant with your zone’s regulations and UAE law — safeguarding your license, reputation, and business growth.