Registered Auditors in DIFC

Registered Auditors in DIFC (Dubai International Financial Center)

With a flexible government, the UAE provides business opportunities for new businesses. The UAE is a hugely profitable location for entrepreneurs from all over the world. The establishment of free zones helps companies to set up shops in the country.

The DIFC, or Dubai International Financial Center, is an exclusive financial free zone that was established in 2004. DIFC is a sophisticated financial centre that serves as a financial powerhouse for the MEASA (Middle East, Africa, and South Asia) countries. The free zone was created with the objective of managing the country's financial companies. DIFC is one of the country's fastest-growing free zones.

Advantages of Establishing a Business in the DIFC Free Zone

DIFC is a finance-based free zone that allows for the establishment of profitable businesses. Some of the advantages of establishing a company in the DIFC are as follows:

There is no corporate or personal income tax (this is now subject to the UAE Federal Corporate Tax law, which applies a 0% rate to qualifying Free Zone entities, but full tax compliance is now mandatory).
 

• Improved data security and protection, governed by the DIFC Data Protection Law.
• Transparency and free flow of information.
• International stock market access (via Nasdaq Dubai).
• The free zone is dominated by the use of the US Dollar (USD).
• Professionals are readily available.
• Attractive infrastructure with cutting-edge technology.

DIFC Regulatory Authorities

DIFC has three independent bodies that govern its operations:

1. DIFC Authority (DIFCA):

• The DIFC Authority is responsible for the strategic development, operational management, and the non-financial services regulation of the DIFC.
• It operates the Registrar of Companies (ROC).
• The foundational law is Dubai Law No. 5 of 2021 (The DIFC Law).

2. Dubai Financial Services Authority (DFSA):

• The DFSA is the independent regulator of financial services conducted in or from the DIFC.
• The DFSA ensures that companies offering financial services comply with the rules and regulations of the free zone.
• The DFSA's powers are derived from the Regulatory Law, DIFC Law No. 1 of 2004.

3. DIFC Courts:

• DIFC Courts were established by Dubai Law No. 9 of 2004.
• The DIFC Court has jurisdiction over all commercial and civil disputes in the free zone, applying a common law framework.
• This court upholds the highest standards for legal proceedings and dispute resolution.

Types of Business Entities in the DIFC Free Zone

All businesses functioning from or within the DIFC must first obtain a business license, which is subject to approval from the relevant DIFC authority (DFSA for financial/regulated activities, or DIFCA for non-financial activities) and the Registrar of Companies (ROC).

The legal classifications of companies were updated by the DIFC Companies Law No. 5 of 2018. The primary company types formed under this law are:

Private Company:

• This classification replaces the former Limited Liability Company (LLC) and is the most common entity.
• It has a minimum of one shareholder and a maximum of 50.
• Shareholders' liability is limited to their capital contribution.
• The company name must end with 'Limited' or 'Ltd'.

Public Company:

• This classification generally applies to larger companies, particularly those listed or having more than 50 shareholders.
• Must have a minimum share capital of USD 100,000 (25% paid up).
• The company name must end with 'Public Limited Company' or 'PLC'.

Limited Liability Partnership (LLP):

• Formed under the Limited Liability Partnership Law, DIFC Law No. 5 of 2004.
• Requires two or more partners.
• Partners' liability is limited to their capital contribution.

Limited Partnership (LP):

• Formed under the Limited Partnerships Law, DIFC Law No. 4 of 2006.
• Requires a minimum of one general partner (with unlimited liability) and one limited partner (with limited liability).

General Partnership (GP):

• Formed under the General Partnership Law, DIFC Law No. 11 of 2004.
• There are no capital requirements.
• Partners' liability is unlimited.

Recognized Company (Branch of a Foreign Entity):

A foreign entity can be formed as a recognized entity by having to registering with the Registrar of Companies and obtaining approval from the relevant DIFC authority.

Investment Companies/Funds: 

These businesses are often registered as a type of Private or Public Company but are also governed by the DFSA's Collective Investment Rules (CIR) and must be authorized by the DFSA if they are Domestic Funds.

Other Structures:

The DIFC also permits structures such as foundations (as per DIFC Law No. 3 of 2018) and Prescribed Companies (Special Purpose Vehicles).

Purpose of Auditing in the DIFC

Auditing in the DIFC is essential for maintaining a high level of transparency and compliance with international standards.

• Mandatory Annual Audit: Generally, every DIFC-registered entity, unless specifically exempted (e.g., certain small private companies), must conduct an annual external audit of its financial statements.
• Standard Compliance: External audits ensure the company's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).
• Auditor Requirement: Only a DFSA-registered auditor (often referred to as a DIFC auditor or Approved Auditor) is authorized to conduct audits and issue an audit report for entities in the DIFC.
• Submission Deadline: Audited financial statements must be submitted to the DIFC Registrar of Companies (ROC) within six months after the end of the financial year.

How Reyson Badger Assists with External Audit Services

If you are looking for a DFSA-registered auditor and an approved audit firm in the DIFC and the UAE, consider firms like Reyson Badger.

• They are typically licensed service providers in the UAE and have DFSA registration to perform audits in the DIFC.
• Their audit process is efficient and in accordance with international accounting and auditing standards (IFRS and ISA).
• In addition to external auditing, their team offers expert services in company insolvency, company financial reporting, and tax consultancy in the UAE (including Corporate Tax compliance).