In the United Arab Emirates, statutory audit requirements depend on the company’s legal structure, jurisdiction (mainland vs. free zone), and regulatory authority. Below is a clear breakdown of which businesses typically require a statutory audit.
1) Mainland Companies (Under Federal Law)
(A) Limited Liability Companies (LLCs)
Most mainland LLCs are required to:
- Appoint a licensed auditor
- Conduct annual statutory audits
- File audited financial statements (if required by authority or stakeholders)
(B) Public Joint Stock Companies (PJSCs)
- Mandatory annual audit
- Must appoint an auditor approved by regulators
- Required to present audited financials to shareholders
(C) Private Joint Stock Companies
- Annual statutory audit required
2) Free Zone Companies
Mandatory Audit Free Zones
Companies registered in the following free zones must submit audited financial statements annually:
- Dubai Multi Commodities Centre (DMCC)
- Jebel Ali Free Zone Authority (JAFZA)
- Abu Dhabi Global Market (ADGM)
- Dubai International Financial Centre (DIFC)
Free Zones Where Audit May Not Be Mandatory
Some free zones do not strictly require audit submission unless:
- Specified in the company’s license
- Required for visa quota increase
- Needed for license renewal
- Requested by banks or investors
Examples:
- Sharjah Media City (SHAMS)
- Fujairah Creative City
(However, rules can change, so confirmation with the specific authority is recommended.)
3) Regulated Businesses (Always Require Audit)
Regardless of location, statutory audits are mandatory for:
- Banks and financial institutions (regulated by Central Bank of the UAE)
- Insurance companies
- Investment firms
- Brokerage firms
- Publicly listed companies
- Large government-related entities
4) When Audit May Be Required Even If Not Mandatory
Even if not legally required, audits may be needed for:
- Corporate tax registration & compliance
- VAT compliance (if applicable)
- Bank loan applications
- Investor/shareholder agreements
- Mergers & acquisitions
- Liquidation or company closure
5) UAE Corporate Tax Impact (Important Update)
With the introduction of UAE Corporate Tax (effective 2023–2024), many businesses now maintain proper financial statements for tax filing. While not all small businesses require a statutory audit, maintaining audited books strengthens compliance.
The Federal Tax Authority may require proper accounting records even if audit submission is not mandatory.
