DIFC company accounting for advisers, fund managers and holding companies

A DIFC advisory boutique might earn retainers from a Saudi family office in SAR, success fees from a European client in EUR, and recharges to a related company in Abu Dhabi in AED. A holding company might earn dividends and gains on shares. A fund manager earns management fees. Each of these is treated differently under the free zone corporate tax rules.

The FTA guide lists fund management, wealth management, holding of shares and other securities for investment, and headquarter or treasury services to related parties among the qualifying activities, each subject to conditions in Ministerial Decision No. 265 of 2023. It lists banking, insurance, and finance and leasing activities among excluded activities, which generally cannot produce qualifying income.

Take a corporate finance adviser with AED 8 million of revenue. AED 6.5 million comes from overseas corporate clients, AED 1.2 million from a mainland UAE company, and AED 300,000 from advising wealthy individuals personally. The individual work is a transaction with natural persons and is normally excluded. Whether the rest qualifies depends on the activity and the counterparty, which is a question for the firm's tax agent.

For the de minimis test, 5% of AED 8 million is AED 400,000, which is below AED 5 million, so the cap is AED 400,000. If the tax agent concludes that the mainland advisory fees are non-qualifying too, non-qualifying revenue reaches AED 1.5 million and the firm cannot be a qualifying free zone person for the year. In that case its taxable income is taxed at the regular rates.

Every qualifying free zone person must prepare audited financial statements, whatever its revenue, according to the FTA. HelloBooks keeps a full audit trail: each entry carries its source document, the AI's suggestion, and who approved it. Multi-currency invoices hold the AED value and post the FX difference on settlement, which matters for a firm billing in USD, EUR and SAR.

The AI agent tags revenue by client type and activity according to your rules, and answers questions such as "how much of this year's revenue came from individuals?" Related-party recharges are posted as journals in each entity so transfer pricing files can be built from real figures. HelloBooks does not prepare regulatory returns to the DIFC's regulator; it keeps the ledger those returns draw on.

• Revenue tagged by client type: corporate, related party, individual, overseas
• Multi-currency invoicing with FX gains and losses
• Business plan audit log and role-based access for the partner, finance lead and auditor