As from 30 September 2025, all companies within IFZA (International Free Zone Authority) — one of the most popular free zones in Dubai, UAE — will be required to submit financial statements when renewing their licenses.
- From 30 September 2025, all IFZA-registered companies must submit financial statements to renew their licences annually.
- Companies renewing before that date are exempt once, but must submit statements for subsequent renewals.
- Small companies (turnover < AED 3,000,000 and ≤9 employees) may submit unaudited simplified statements; others need audited accounts.
- Statements must cover the most recently completed financial year, be signed and submitted electronically with the renewal application.
Who does the new requirement apply to?
Starting from 30 September of the current year, all IFZA-registered companies will be able to renew their licenses only upon submission of their financial statements for the last completed financial year.
This requirement applies to both IFZA free zone companies (FZCOs) and branches of foreign companies licensed in IFZA.
When does a company need to submit financial statements?
A company will need to submit financial statements annually as part of the business license renewal process. The deadline for each company is different, depending on its license’s expiry date.
Companies that have already renewed their licenses before 30 September 2025, will not be required to send financial statements in addition. However, they will have to present their financial statements for all subsequent renewals.
If a company’s license renewal is due but its first financial year has not yet ended, the license can be renewed without financial statements. This is typical for newly established companies whose first financial year lasts longer than the license’s term. In this case, the company may be asked to provide a written undertaking that it will submit the statements after its financial year ends.
Requirements for financial statements
The financial statements submitted for license renewal in IFZA must cover the company’s most recently completed financial year prior to the license renewal date.
If a company has already prepared or submitted audited financial statements to the Federal Tax Authority (FTA), it can use the same for its license renewal.
A company’s first financial year begins on its incorporation date and cannot exceed 18 months. The second and all subsequent financial years last for 12 months. The end date of the financial year is specified in the company’s Articles of Association (often it’s 31 December). The duration of the financial year can be adjusted by a decision of the directors.
The financial statements must be signed by an authorized signatory (such as a manager, director, or shareholder) and submitted electronically along with the license renewal application.
Simplified financial statements
IFZA free zone companies that meet both of the following requirements can submit unaudited simplified financial statements using a special form:
| For the completed financial year | Threshold |
|---|---|
|
Annual turnover |
Less than AED 3,000,000 (around USD 817,000) |
|
Number of employees (at any point during the completed financial year) |
No more than 9 employees |
If the company’s annual turnover is less than AED 3 million, the cash method of accounting is allowed.
Audited financial statements
If the aforementioned requirements are not met, full audited financial statements are required. They must be prepared in accordance with the following standards:
| Turnover (gross income) for the financial year | Standard applicable |
|---|---|
|
Over AED 3,000,000, but less than AED 50,000,000 |
International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) |
|
Over AED 50,000,000 |
International Financial Reporting Standards (IFRS) |
At present, any auditor licensed in the UAE can be engaged to conduct the audit. However, a list of auditors (auditing firms) authorized by IFZA for these purposes may be approved at a later date.
Our recommendations
- For companies that have completed at least one financial year, we recommend you begin preparing financial statements to ensure a timely license renewal. The statements can be either audited or simplified, depending on your company’s performance.
- For all companies, regardless of whether they have completed their first financial year, it is crucial to establish a robust system for maintaining financial records that meets all regulatory requirements.
Conclusion
These new rules are set to promote greater transparency and accuracy in business financial performance, while also ensuring that IFZA free zone companies adhere to international standards and practices.Proper and timely preparation of financial statements in the UAE is crucial. This will help you avoid delays or rejections during your license renewal from the free zone Authority, which is vital for ensuring the seamless continuity of your company’s business operations.
Tags: company law, licensing, UAE
