DAFZA Approved Audit Firm in Dubai

Companies registered in the Dubai Airport Freezone Authority (DAFZA) are required to comply with financial reporting and auditing standards set by the authority. Companies operating in this free zone are usually required to prepare annual financial statements and have them audited by any of the DAFZA approved auditors. These auditors are registered and approved by the authority to examine company records, make sure that they adhere to the rules and regulations and maintain financial transparency. By choosing qualified auditors in DAFZA, companies are able to comply with regulatory requirements, avoid fines and maintain credibility with regulators, investors and banks.

KEY POINTS:

• Firms operating in the Dubai Airport Free Zone are typically required to perform an annual audit through certified audit firms in the Dubai Airport Free Zone.
• Companies are expected to keep proper financial records and submit audited reports as per the requirements of DAFZA. Late submission of audit reports may impact license renewal or suspension of trade license.
• Vertix Auditing is one of the leading ISO Certified audit firm in DAFZA providing professional auditing services, including external audits, internal audits, corporate tax and VAT compliance, mergers & acquisition support, and financial due diligence. We are also approved auditors in prominent free zones, such as IFZA, DMCC, Medan, DSO, etc.

What is the Dubai Airport Free Zone Authority?

The Dubai Airport Freezone Authority (DAFZA) manages one of the most developed free zones in the UAE. The zone was created in 1996 as part of the strategy of Dubai to develop a robust investment-driven economy and attract foreign companies.

The free zone is situated close to the Dubai International Airport, which offers a strategic business landscape for companies that are engaged in international trade, logistics, aviation, technology and professional services.

Some of the very important features of DAFZA are as follows:

•  It accommodates over 2,000 registered companies from more than 20 industries
• More than 20,000 professionals are supported by the free zone
• It has a total area of approximately 696,000 square meters, including offices, warehouses and industrial facilities

The DAFZA businesses enjoy the following benefits:

• 100 percent foreign ownership
• Full capital and profit repatriation
• No currency restrictions
• Advanced infrastructure and business-friendly laws.

Due to the increased interest of businesses in the area, DAFZA has stringent financial compliance regulations, such as requiring companies to engage the services of the audit companies approved by the Dubai Airport Freezone Authority to audit the yearly financial statements.

Types of Business Licenses in DAFZA

Anyone who wants to establish a business in DAFZA has the opportunity to select from various types of licenses based on their business operations.

1 – Trade or Trading License

A Trading License enables the companies to conduct trading activities, such as:

• Import and export
• Distribution
• Storage of goods

Trading companies and distributors usually use this license.

2 – Service License

A Service License is granted to firms that provide professional or service-based activities, such as:

• IT services
• Consultancy
• Marketing
• Business support services

3 – Industrial License

This license allows companies to carry out light manufacturing or industrial operations. The activities under this license may include:

• Assembly
• Packaging
• Production
• Processing

4 – E-Commerce License

An E-Commerce License enables businesses to sell services and products through websites and online platforms.

5 – General Trading License

Under this license, companies are permitted to trade various types of goods on a single license, which includes import, export, storage and distribution.

6 – Dual License with the Department of Economic Development (DED)

DAFZA companies have an opportunity to apply for a dual license with the Dubai Department of Economic Development, which will enable them to operate in mainland Dubai without requiring a separate physical office there.

Requirements for DAFZA Annual Audit Submission

There are certain DAFZA regulations for audit. DAFZA requires companies to maintain proper financial records to ensure adequate governance and financial transparency. Entities operating in the free zone are required to adhere to financial reporting regulations set by DAFZA. Standard audit requirements in DAFZA are as follows:

• Keeping proper financial statements and accounting records
• Financial statements should be in accordance with international accounting standards, usually IFRS
• Performing an external audit by a DAFZA approved auditor
• The audit report should present the true financial position of the company
• Submitting the audit report to the authority

These regulations help regulators to monitor business activities and ensure that companies are acting responsibly.

Audit Procedure in DAFZA

The process of auditing is often conducted in a number of steps.

Step 1 – Hiring an Approved Auditor: Companies have to choose an auditor from the official DAFZA approved auditors list provided  by the authority.

Step 2 – Gathering of Financial Documentation – The auditor obtains key financial information from the management. This includes, trial balance, profit & loss account, balance sheet, full year bank statements, bank confirmation, and any other important report from the accounting software.

Step 3 – Verification and Examination: Financial information is assessed and verified by the auditor to ensure that the information is accurate and complies with the accounting standards. Auditor also verifies sample transactions from different GL accounts with the supporting documentation to ensure they are authentic and belong to the business.

Step 4 – Preparation of Audit Report: After the review, auditor issues the audit report containing the audit opinion. If everything is in line with the accounting and auditing standards, auditor generally issues an unqualified audit opinion. If there are any material misstatements or departure from accounting standards, auditor may issue a qualified audit opinion.

Step 5 – Submission to DAFZA: After obtaining the audited financial statements, the Entity needs to submit the report to DAFZA. This is a mandatory requirement for renewal of trade license.

What Documents Are Needed for a DAFZA Audit Report?

Companies are required to present a number of documents to the auditor for performing an audit smoothly. Typical documents include the following:

• Trade license of your company to establish legal existence
• Memorandum of Association (MoA) to verify important information like shareholding, financial year end dates, etc.
• Shareholder information like visa, passport copy, EID
• Bank statements (local + international)
• Sales and purchase invoices and related receipts and payments
• Other business expenses with supporting documents
• Payroll records
• VAT Certificate and VAT returns
• Corporate tax filings
• Prior year audit reports

Penalties for Non-Compliance with DAFZA Audit Requirements

Violation of audit regulations can have a number of implications.

Possible penalties include:

• Delays in the renewal of the trade license, or suspension (in extreme cases)
• Fees for reactivating your trade license after suspension
• Certain services may be suspended, like new visas, visa renewals, amendments in company records, etc.  
• The Entity may lose Qualifying Free Zone Person status
• Administrative fines
• Compliance reviews by DAFZA

Keeping proper financial records and working with DAFZA licensed auditors can assist the companies to avoid these implications.

Roles & Responsibilities of DAFZA Approved Auditors

Some of the important responsibilities auditors must fulfil are listed below:

• Ensuring that the financial statements present true and fair view for the benefit of all the stakeholders
• Accounts are prepared in line with international accounting standards
• Examining accounting records and financial transactions
• Assessing internal financial controls
• Giving an independent audit opinion on the financial statements
• Maintaining compliance with the regulations of DAFZA
• Reporting any fraudulent or unusual activity to the authority

Awards and Achievements

The Dubai Airport Freezone Authority has received a number of international awards for innovation and sustainability.

The significant accomplishments are the following:

1. Being the winner at the Ideas UK Awards in the category of Best Technology Award for its Smart E-Gate Pass program.
2. Awarded with the Platinum Certification from the Leadership in Energy and Environmental Design (LEED) for its sustainability efforts.
3. Granted with LEED Gold Certification for the development of Building 8W in DAFZA Square.
4. Presented with the Emirates Energy Award in the Golden Category from the Dubai Supreme Council of Energy.
5. Won the Best Smart Initiative Award 2016 at the Big 5 event.
6. Selected as a designated zone according to the UAE Cabinet Decision No. 59 of 2017.
7. Launch of innovation initiatives like the Dubai Blink during the World Government Summit 2018 with the support of Hamdan bin Mohammed bin Rashid Al Maktoum.

These accomplishments demonstrate the dedication of the free zone for innovation and sustainable development.

How Can Vertix Auditing Help?

Vertix Auditing is one of the top 10 audit firms in Abu Dhabi and Dubai providing auditing, tax, and advisory services to businesses operating in different free zones of the UAE as well as mainland.

Our services include:

• External audit services
• Preparation of financial statements
• Compliance support
• Accounting and bookkeeping services
• Corporate tax and VAT compliance services

Frequently Asked Questions (FAQs)

1) What is the list of auditors approved by the Dubai Airport Free Zone Authority?

The list of approved auditors by DAFZA allows the companies to find approved audit firms that are authorized to conduct an audit of the organizations registered in the free zone.

2) How to find a DAFZA approved auditor?

Refer to this list of approved and licensed auditors issued by the authority.

3) Where can I find the contact details for auditors approved by the Dubai Airport Free Zone Authority (DAFZA)?

Contact details of the approved auditors are either available on the official list of DAFZA or on the websites of the concerned audit firms.

4) How can I compare prices for DAFZA audit services?

Audit fees may be different depending on factors, such as:

• Company size
• Transaction volume
• Complexity of operations
• Required scope of financial review

To get a quick idea of the fee, refer to our Audit Feel Calculator and get an instant estimate of fee. Then, contact 3 to 4 audit firms and get their prices. Compare those prices with the estimate you got from the audit fee calculator, and appoint the most suitable audit company.

5) What are the services offered by auditors approved in the Dubai Airport Free Zone?

Services that are usually offered by approved auditors include:

• Liquidation of a company
• Statutory audit
• Preparation of financial statements
• Accounting support
• VAT advisory
• Corporate tax compliance
• Internal audit services

6) How long does it take to complete an audit by a DAFZA auditor?

The timeline of the audit is usually based on the company’s volume of transactions and the availability of documents. The procedure may take two to four weeks provided the required support and supporting documentation is provided to auditor.

7) What is the difference between approved and non-approved auditors in the Dubai Airport Free Zone?

Auditors who have been approved by DAFZA are officially authorized to conduct audits for firms within the free zone. Non-approved audit firms are not allowed to conduct audits and their reports will not be accepted by the Authority. However, they can provide non-audit related services, such as accounting services, VAT and Corporate Tax filing, etc.

8) Are audit reports from Dubai Airport Free Zone approved auditors accepted by banks?

Yes. Banks, investors, and regulatory authorities usually believe that audit reports prepared by the recognized auditors are credible financial reports. However, many banks have their own list of approved firms so counter checking with your banking partner would be better.

9) What is the deadline for DAFZA audit report submission?

Generally, the deadline to submit audited accounts are 3 months after the year end. In some cases, it may also be linked to your trade license renewal date. This means you must submit the audit report at the time of renewal of your license. The authority may also extend the timeline if you request for an extension.

10) What are the auditing standards followed by DAFZA approved firms?

The International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) are the most commonly used accounting and auditing standards followed by most of the approved auditors.