How to Get an Audit License in Dubai, UAE?

To offer auditing services in Dubai, securing an audit license is mandatory. This license grants your company the ability to help businesses submit their annual audits accurately to the UAE tax authorities. Issued by a regulatory body, an audit license permits individuals or organizations to conduct a thorough review of financial records and documents, ensuring compliance with applicable laws and regulations.

Before launching your audit firm, you’ll need to meet specific prerequisites and obtain necessary approvals. Although the process is straightforward, it requires careful preparation to successfully establish an audit company in the UAE.

What is an Audit License?

An audit license is an official authorization granted by a regulatory authority, allowing an individual or organization to perform audits. Audits involve a systematic review of financial records and documents to verify their accuracy and ensure compliance with relevant laws and regulations.

In the UAE, the Ministry of Economy (MoE) issues audit licenses. The specific requirements for obtaining an audit license may vary depending on the jurisdiction. However, the general criteria for acquiring an audit license in the UAE typically include:

• A bachelor's degree in accounting, finance, mathematics, or a related discipline.
• A master’s degree in accounting or business administration with a focus on accounting.
• Successful completion of mandatory exams on International Financial Reporting Standards (IFRS), International Standards in Auditing (ISAs), and UAE tax and regulation.
• A minimum of five years of professional auditing experience.

How to Obtain an Audit License in Dubai

The Ministry of Economy (MoE) introduced Ministerial Resolution No.111-2, setting updated standards for aspiring auditors in Dubai. To qualify for an audit license and begin offering auditing services, applicants must meet the following criteria:

1. Hold a bachelor’s degree in finance, accounting, or a related field.
2. Successfully passed the International Financial Reporting Standards (IFRS), International Standards in Auditing (ISAs), and the UAE's required tax and regulation exam.
3. Possess a minimum of three years of auditing experience, supported by a professional certification.
4. Demonstrate the financial capacity to invest the required minimum amount for starting a business in Dubai, as evidenced by financial records.
5. Have at least two business partners, each with no less than five years of auditing experience.

Meeting these requirements ensures that auditors in Dubai are well-equipped to operate within the city regulatory framework.

How to Get an Audit License in Dubai

Setting up an auditing firm in Dubai follows a similar process to other business ventures. To ensure a smooth start, adhere to these steps:

Step 1: Choose the Jurisdiction for Setup

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Decide whether to establish your auditing firm on the mainland or within a free zone. Both options have different benefits and regulations.

Step 2: Select a Trade Name and Structure

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Choose a company name that aligns with UAE naming conventions. Prepare at least three name options that are not linked to established brands, avoid offensive language, and steer clear of religious references, especially to Islam. The Department of Economic Development (DED) or the free zone authority will approve the most suitable and available name.

Step 3: Apply for an Audit License

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For mainland companies, the Department of Economic Development (DED) issues the audit business license, while the Ministry of Economy (MoE) grants the professional service license. In free zones, the business license is provided by the free zone authority, but you’ll need additional approval from the MoE for external activities.

Step 4: Open a Business Bank Account

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Once your audit license is secured, the final step before launching operations is opening a corporate bank account for your auditing firm.

Cost of Audit Auditing License in Dubai, UAE?

Starting an auditing, accounting, or tax consultancy firm in the UAE involves various costs, with initial licensing fees typically beginning at AED 25,000*. However, the total expense can vary based on several factors, including:

• Business Setup Type: Costs differ between setting up in a free zone or on the mainland.
• Business Location: The location of your firm can impact expenses, with different areas having varying fees.
• Business Size: The size and scale of your operation will influence overall costs.
• Number of Employees: The number of staff you hire will affect your initial and ongoing costs.
• Service Types: The range of services you offer can impact licensing and operational expenses.
• Government and Regulatory Fees: Fees from governmental and regulatory bodies contribute to the overall cost.

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Benefits of Holding an Audit License in Dubai

• Provide auditing services to government entities, private enterprises, and public corporations.
• Build a vast network of clients and prospects within the financial services sector.
• Issue audit reports that meet the standards required by investors and regulatory bodies.
• Enjoy tax benefits such as no capital gains tax, minimal value-added tax (VAT), and no personal income tax.

FAQ: 

1. What is an audit license, and why is it necessary?
An audit license is a formal authorization from a regulatory body that permits individuals or organizations to conduct audits. It ensures that audits are performed accurately and in compliance with relevant laws and regulations.

2. How much does it cost to obtain an audit license in the UAE?
The cost for obtaining an audit license in the UAE typically starts at AED 25,000*. However, the final cost can vary based on factors such as the type of business setup (free zone or mainland), location, size, number of employees, services offered, and regulatory fees.

3. What are the main requirements for getting an audit license in the UAE?
General requirements include having a bachelor’s degree in accounting, finance, or a related field, a master’s degree in accounting or business administration, passing exams in IFRS, ISAs, and UAE tax regulations, at least five years of auditing experience, a valid practicing certificate, and a certificate of equivalency.

4. Can I set up an auditing firm in a free zone?
Yes, you can set up an auditing firm in a free zone. Free zones offer specific benefits such as tax exemptions and 100% foreign ownership, but you will need to comply with the regulations of the respective free zone authority and the Ministry of Economy (MoE).

5. What is the difference between setting up an auditing firm in the mainland and a free zone?
Setting up in the mainland allows you to conduct business throughout the UAE and requires a license from the Department of Economic Development (DED) and MoE. Free zone setups offer benefits like tax exemptions and full foreign ownership but are restricted to operating within the free zone or internationally.

6. How long does it take to obtain an audit license?
The time required to obtain an audit license can vary, but the process generally takes a few weeks to a couple of months, depending on the efficiency of the application process and the completeness of the submitted documentation.

7. Are there any specific regulations for foreign investors looking to set up an auditing firm in the UAE?
Foreign investors can set up an auditing firm in the UAE, particularly in free zones where 100% foreign ownership is allowed. However, they must adhere to local regulations and obtain the necessary approvals from the Ministry of Economy and relevant free zone authorities.

8. What types of services can an audit firm offer in the UAE?
An audit firm in the UAE can provide a range of services, including financial audits, tax consultancy, compliance audits, internal audits, and other accounting and advisory services.

9. Do I need a local partner to start an auditing firm in the UAE mainland?
Yes, if you choose to set up in the UAE mainland, you typically need a local partner who holds at least 51% of the company’s shares. This requirement does not apply to free zone setups.

10. What are the ongoing costs associated with running an auditing firm in the UAE?
Ongoing costs may include office rent, employee salaries, professional indemnity insurance, renewal of licenses, regulatory compliance fees, and other operational expenses. The specific costs will depend on the scale and nature of your business.

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