For many UAE companies the answer is yes, but the reason differs. Mainland companies must be audited under the Commercial Companies Law. Free zone companies follow the rules of their own authority. And since corporate tax, some companies need audited financial statements for tax even where no other law requires one. Work out which source applies to you, because more than one can.
The answer by company type
| Company type | Is an audit required? | Source of the rule |
|---|---|---|
| Mainland LLC and other mainland companies | Yes, annually | Commercial Companies Law, Federal Decree-Law No. 32 of 2021 |
| Free zone company | Depends on the zone | The free zone authority's regulations |
| ADGM company | Yes, unless exempt | ADGM Companies Regulations 2020 |
| Any taxable person with revenue above AED 50 million | Yes, for corporate tax | Ministerial decision on audited financial statements |
| Qualifying free zone person | Yes, for corporate tax | Ministerial decision on audited financial statements |
| Tax group | Audited special-purpose statements | Ministerial decision on audited financial statements |
Mainland companies
The Commercial Companies Law requires mainland companies to appoint an auditor and have their financial statements audited each year. The auditor must be licensed, and the report is part of the annual accounts. This is a company law duty and applies whatever the company's tax position. See statutory audit in Dubai.
Free zone companies
Free zones set their own rules. Many require audited accounts for licence renewal, with an approved auditor and a deadline set by the authority. Others require them only above a size or activity test. Because the rules vary, check your zone directly. See free zone audit requirements, DMCC audit requirements, IFZA and Meydan, DAFZA and JAFZA, SHAMS and ADGM.
Audit for corporate tax
Corporate tax adds a separate trigger. A taxable person with revenue above AED 50 million, and a qualifying free zone person, must prepare and maintain audited financial statements for the tax period. A newer ministerial decision applies to financial years starting on or after 1 January 2025 and keeps these categories while adding audited special-purpose statements for tax groups. The earlier decision continues to apply to earlier years. See audited accounts and corporate tax and QFZP explained.
A company may therefore be exempt under one law and caught by another. A free zone company with no local audit rule can still need an audit as a QFZP.
If you do not audit
Consequences depend on the source of the rule: licence renewal can be refused or delayed by a free zone, a mainland company can face penalties under the company law, and a missing tax audit undermines the corporate tax return. See what happens when a free zone audit deadline is missed.
A three-question check
- Where are you licensed? Mainland or which zone.
- What is your revenue and status? Above AED 50 million, or a QFZP?
- Are you in a group? Tax group or regulated group members can change the answer.
If you are unsure, an audit scoping call settles it. See audit services and what an audit costs in Dubai.
Sources
Mainland audit duty: DWF on the Commercial Companies Law amendments. Corporate tax audit categories: KPMG UAE on the updated ministerial decision. General information only.
Four examples
| Business | Audit required? | Why |
|---|---|---|
| A Dubai mainland LLC with AED 2 million revenue | Yes | The Commercial Companies Law requires it |
| A DMCC company with AED 5 million revenue | Check DMCC rules, and corporate tax if a QFZP | Zone rule and possibly a tax trigger |
| A mainland company with AED 70 million revenue | Yes, twice over | Company law, and the AED 50 million tax trigger |
| A small ADGM company that meets the small-company conditions | Possibly not | An ADGM exemption, if conditions are met and no tax trigger applies |
When the audit has to be done
Mainland companies approve audited accounts within the period set by the company law, and corporate tax returns are due nine months after year end, so an audit that finishes late can hold up the tax return. Free zones set their own filing dates, often tied to licence renewal. Working backwards from the earliest of these gives the audit deadline.
Choosing an auditor
The auditor must be licensed in the UAE, and in a free zone must be on the approved list where one exists. Check the register, ask who will sign, and confirm independence. For how to choose, see how to choose an audit firm in Dubai.
What the auditor will ask for
- A trial balance and the general ledger.
- Bank statements and confirmations.
- Fixed asset registers, contracts and loan agreements.
- Payroll records and end-of-service calculations.
- VAT returns and corporate tax filings.
- Board and shareholder minutes.
Preparing these in advance shortens the audit and reduces the fee. See what an audit costs in Dubai.
Changing your auditor
If your current auditor is not on your zone's approved list, or the relationship is not working, you can change. The process involves a handover, the release of working papers and notification to the authority where required. See changing your auditor.
Audit and the tax return
Audited accounts do not replace the tax return, but they underpin it. A return built on audited numbers is easier to defend if the FTA asks questions. That alone is a reason some businesses audit even when no law requires them to.
Thresholds and size tests
Where an audit duty depends on size, the test is applied to specified measures such as revenue, assets or headcount, over a stated number of years. The measures and numbers differ between regimes, so read the rule that applies to your licence rather than assuming one universal threshold. If you are close to a limit, keep the working papers that show which side of it you fall on.
Banks, investors and landlords
Even where no law requires an audit, a lender, investor or counterparty may. Banks often ask for audited accounts to support a credit facility, and investors normally expect them. Decide on audited accounts as a business tool as well as a legal duty.
What to do next
List your licence type, your zone and any contract that mentions audited accounts, then check each against the rule. Our audit services page explains the types of engagement we provide.
Choosing audit voluntarily
A voluntary audit is a management decision. It can support a bank loan, reassure a foreign parent, help in a sale of the business or give a partner comfort over the numbers. It also adds a cost and a timetable, so weigh the benefit against the fee. Many owners start with a review of accounts before they commit to a full audit.
Free zone differences
Free zones set their own audit rules, and some require annual audited accounts at licence renewal while others do not. Always read the current regulations of your own zone. See free zone audit requirements.
Frequently asked questions
Yes. The Commercial Companies Law requires mainland companies to appoint an auditor and have their financial statements audited each year.
It depends on the zone. Many require audited accounts for licence renewal. Check your authority, and also check whether corporate tax requires an audit.
For taxable persons with revenue above AED 50 million and for qualifying free zone persons, yes. Tax groups prepare audited special-purpose statements.
Not on the mainland as a rule, because the company law requires LLCs to appoint an auditor. Some free zones, such as ADGM, have small company exemptions with conditions.
A licensed auditor. Free zones may require an auditor from their approved list, and ADGM requires an ADGM-registered auditor.
Possible licence renewal problems in a free zone, penalties under the company law for a mainland company, and a weaker corporate tax return position.