Audit Services for Hamriyah Free Zone Registered Companies
Hamriyah Free Zone (HFZ) is one of the biggest free zones located in the city of Sharjah and the United Arab Emirates. It was established in the year 1995 and is one of the rapidly growing free zones in the UAE. The unique geographic location of the Hamriyah Free Zone (HFZ) along with the time zone advantage backed by a secured and fully-convertible currency and multi-access to global countries through land, air and sea makes the said free zone one of the best to conduct business operations in the UAE. The HFZ is fast becoming as one of the cornerstones of industrial development in the UAE. The objective of the Hamriyah Free Zone is to be as flexible and dynamic with regards to its operations as possible in addition to being an investor-friendly free zone.
Hamriyah Free Zone allows businesses to conduct their operations in a tax free environment with full company ownership, exemptions from all commercial levies and repatriation of capital and profits. In addition to world-class facilities including executive offices, factories, and warehouses, Hamriyah Free Zone also provides various business services, like auditing and banking firms, staff accommodation, currency exchanges, conference rooms, and more.
Each free zone located in the UAE is governed by a local authority that is responsible for regulating the businesses conducting business operations within the free zone areas. The purpose of the free zone authority is to ensure that environment within the free zone is well regulated and controlled.
Types of Business License
The Hamriyah Free Zone offers businesses four types of business licenses to operate within the free zone. The business license is given to the business entity depending on the nature and type of its business operations. The business licenses offered by the Hamriyah Free Zone are as follows:
• Industrial License
• Commercial License
• General Trading License
• Service License
Benefits for Businesses in HFZA
HFZA provides companies conducting their business activities in Hamriya Free Zone with the following benefits:
• Total exemption from corporate, income, export or import taxes
• No currency restrictions
• 100 per cent foreign ownership
• No restriction on repatriation of capital and profits
• Renewable long term lease
• Cost-effective workforce
• Low cost energy
• Onsite labour accommodation
• Access to a 14-metre deep port and 7-metre deep inner harbour
• Onsite customs facilities
• Single window convenience for all administrative services
Rules and Regulations associated with External Audit of companies in HFZA
As per article 17 (L) of the implementing rules and regulations concerning the Hamriyah Free Zone established under Decree No. 6 of 1995, each free zone establishment in HFZ must appoint independent auditors from the list of auditors approved by the HFZA to report to the Shareholders of the free zone establishment on operational as well as financial aspects of the Free Zone Establishment and state whether, in the auditor’s opinion, such annual financial statements have been prepared in compliance with the Implementing Regulations and whether the prepared financial statements can be relied upon to accurately assess the free zone establishment’s financial position and stability.
As per article 17 of the regulations, the annual accounts of the company must be approved by the directors and signed by or on behalf of the directors. At least one director shall sign the Statement of financial position and statement of comprehensive income of the Free Zone Establishment.
Reasons for External Audit service in HFZA
The free zone authority requires the business entities operating in HFZA to submit an external audit report on annual basis mainly due to the following reasons:
• The audit report provide the authority with information they need to assure that businesses in HFZA are complying with the rules and regulations established by both the UAE government and the free zone authority.
• An external audit provides the authority with assurance that the financial statements of the business are complete and accurate and that the business entity is not concealing any sort of information from the authority.
• An external audit report from an independent auditor provides the authority and the stakeholders with reasonable assurance that the entity’s financial statements are accurate and can be relied upon to make strategic business decisions.
• Independent external audits provide assurance to the authorities that entity’s accounts are prepared in compliance with the applicable accounting standards and that the business is not involved in any fraudulent or illegal activity.
Benefits associated with External Audit services in HFZA
An external audit report provides the company’s stakeholders with all the necessary information they need to assess the company’s business operations as well as its financial position apart from the information provided by the business management and the free zone authority. External audit is basically used as a tool by the shareholders to assess the accuracy and authenticity of the information provided and presented in the entity’s financial statements. An external audit performed by an approved and well-known audit firm provides banks and other investors’ with confidence to rely on the information presented in the audited financial statements with regards to making timely decisions concerning their investment in the entity. The audit report also provides potential investors with confidence to invest in businesses operating within the Hamriyah Free Zone. There are some other government institutions/ authorities that can use the audit report and the audited annual financial statements as a tool to assess and ensure that the business is complying with specific regulations pertaining to import/export and labor practices.
Approved Auditors in HFZA
Only the audit firms approved by the Hamriyah Free Zone Authority can perform statutory external audits in Hamriyah Free Zone. In order to remain on the list of approved auditors in HFZA, the audit firms must provide evidence to the authority of their employees provided with various educational and professional development programs so that to assist them in updating their knowledge with the changing auditing and accounting standards.
HOW NADEEM & UMENDRA CHARTERED ACCOUNTANTS CAN HELP!
Nadeem & Umendra Chartered Accountants is an HFZA approved audit firm and known for its qualitative and timely auditing services. We not only prepare your audit reports within 1 day record time (depending on the provision of complete information), but also ensure that the stakeholders of your company get useful information from our reports which greatly help them in decision making. Don’t wait and contact us immediately on +971 50 3958931 or request a call back and one of our Partners will get back to you within 30 minutes.