Understanding Accounting and Auditing Obligations for New Businesses in Dubai

If you are planning on entering the market or already have a new business set up in Dubai, it is crucial that you understand your accounting and auditing obligations. With the introduction of corporate tax in recent years, financial records have become an important part of the tax filing process.

Here's everything you need to know about financial reporting for your new business in Dubai:

Why Accounting Matters from Day One of Business Set-Up

When setting up a new business in Dubai, one of your first priorities should be putting in place a professional accounting system. If you have an effective accounting department, you can make more informed decisions for your business based on the real numbers at play.

You may be asked to submit audited financial statements to demonstrate your compliance with corporate tax laws or indeed other regulations. Dubai follows the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS), which means for businesses to set up and operate in Dubai, they must meet global financial reporting benchmarks. 

These standards are applied across mainland and free zone entities, meaning that financial management matters for businesses of all sizes.

Does Your Business Require an Annual Audit?

Not every new business set up in Dubai needs to submit an annual audit. However, if you fall under the following categories, it becomes mandatory:

• Mainland Companies: If your new business is set up in Dubai's mainland and has annual revenue exceeding AED 50 million, you will be legally required to carry out an audit each year.
• Free Zone Companies: Free zones may ask for audited financial reports during your license renewal, regardless of your revenue. The exact regulations vary between zones, so verify the relevant specifics for the area you operate in.
• Qualifying Free Zone Entities (QFZPs): Even if you qualify as an entity that benefits from a 0% corporate tax rate, you must provide audited financial statements annually to prove you should retain this special tax status.

You can also choose to audit your business at any time as an effective tool for improving or enabling strategic decision-making. Regular audits help your business operate with financial transparency, increase credibility with investors, and identify operational inefficiencies.

While there are no immediate penalties for failing to maintain regular accounting records, Dubai’s Federal Tax Authority (FTA) requires businesses to retain their financial records for a minimum of seven years. Non-compliance with this regulation can result in penalties under the tax regime. 

How Swift Audit & Advisory Can Help Your Business

Our team has the expertise to help your new business set up in Dubai stay financially secure and successful. Stay compliant and on top of your business’s financial health by choosing Swift Audit & Advisory. You can access comprehensive, world-class accounting and auditing services:

1. Customized Accounting Services: We tailor our services to your size and needs, including software setup and training for financial management.
2. Compliance Support: Ensures adherence to IFRS/IAS standards and Dubai’s Federal Tax Authority requirements, reducing the risk of fines and keeping you up-to-date with regulatory changes.
3. Audit Services: Professional audits, whether required annually or for specific business needs like license renewal or maintaining Qualifying Free Zone Entity status.
4. Tax Planning: Strategic guidance to structure your business for corporate tax compliance, optimizing tax benefits, and minimizing liabilities.
5. Financial Reporting: Regular management reports for clear insights into cash flow, profitability, and financial health, ensuring sustainable business growth.
6. Long-Term Partnership: Advice to help your business grow, from start-up support to refining financial strategies for established companies.

Rely on our experts for compliance with local regulations, maximized tax benefits, and valuable insights that help drive informed decisions. From implementing the right accounting software to conducting thorough audits and strategic tax planning, we are committed to your business’s financial success.

Partnering with Swift Audit & Advisory means building a strong, secure financial foundation for long-term growth. Contact us today to secure your business’s future with expert accounting and auditing support.