DIFC and ADGM company accounts and audit rules: what each centre expects

ADGM’s guidance says that, generally, every ADGM company and limited liability partnership must file annual accounts with the Registration Authority. Private companies and LLPs file within nine months of their accounting reference date; public companies within six months. If the first financial year is longer than 12 months, the nine months run from the first anniversary of incorporation.

ADGM states that annual accounts must be denominated in US dollars. That surprises owners who run their business in dirhams. The books can still be kept in AED; the filed accounts are presented in USD.

Qualifying small companies and LLPs may file a simplified unaudited balance sheet. ADGM sets the limits at turnover of not more than USD 13.5 million and no more than 35 employees, and excludes public interest entities and financial services firms.

ADGM branches and foundations keep accounting records but are not required to file them annually with the Registrar. Restricted scope companies file only if the Registrar asks.

Under the DIFC Companies Law, companies prepare annual accounts. Law firm summaries of the 2018 law describe an audit exemption for small private companies meeting turnover and shareholder-count tests, with shareholders holding a set minimum stake able to require an audit, and an annual confirmation statement filed as part of licence renewal.

Thresholds and procedures can change by regulation, so confirm the current tests with the DIFC Registrar of Companies before deciding not to audit. Regulated firms supervised by the DFSA have separate prudential reporting on top of company law.

DIFC and ADGM entities are within UAE corporate tax. They register with the FTA, apply 0% to taxable income up to AED 375,000 and 9% above unless they qualify as qualifying free zone persons, and file within nine months of the tax period end. A QFZP needs audited financial statements for tax purposes, even where the company law would allow an unaudited set.

So an ADGM holding company using the small companies regime might still commission an audit because its tax position depends on it.

An ADGM private company holds shares in three UAE operating companies and a London property. Its functional currency is AED; it receives dividends of AED 2.4 million and rent of GBP 120,000 in the year, and pays AED 310,000 in management costs.

The books are kept in AED with the GBP rent recorded at the transaction rate and exchange differences tracked. At year end the accounts are translated to USD for filing with ADGM within nine months of the accounting reference date. The tax agent separately reviews whether the dividends are exempt income and how the foreign rent is treated for corporate tax, working from the same AED ledger.

Holding and advisory companies tend to have few transactions but complex ones.

• Intercompany balances that do not agree with the subsidiary’s books.
• Dividends recorded when received rather than when declared.
• Costs paid by the parent abroad and never recharged or recorded.
• No documentation of how shared staff or office costs are allocated.

HelloBooks Business plan manages several entities from one login, keeps multi-currency ledgers with FX gains and losses, and records intercompany transactions on both sides. The AI agent answers “does our receivable from OpCo agree with OpCo’s payable?” across entities and flags differences.

Translating accounts to USD for ADGM presentation and the audit itself remain with your accountant and auditor. For a report layout that matches your filing template, request a customization at /book-a-demo.