HFZA procedures
Confirm requirements for your entity and reporting period, including auditor acceptance, submission arrangements and any applicable authority instructions.
HFZA audit · Sharjah, UAE
Hamriyah Free Zone audit services
Reliable financial statements. An audit shaped around your business.
Brainstorm Chartered Accountants supports HFZA companies with external audits, audited financial statements and financial reporting, alongside separately scoped QFZP, Corporate Tax and VAT support.
From inventory and machinery to imports, exports and related parties, the engagement considers your actual operations and reporting purpose.
Business-specific scopeTrading, industrial and service operations
Financial reportingAccounts, disclosures and audit evidence
QFZP and tax reviewSeparately scoped professional support
Sharjah presenceSupport through our SAIF Zone office
Professional HFZA audit support
More than a signed
More than a signed
year-end report.
A financial statement audit independently examines reported information and supporting evidence. Planning should reflect the entity, material balances and applicable requirements.
Start with the records.
Financial statements, reconciliations, stock evidence and documented transactions.
What can an HFZA audit cover?
Revenue, purchases, inventory, fixed assets, bank balances, receivables, payables, foreign currencies and related parties. The actual procedures depend on assessed risks and materiality.
Why might audited accounts be needed?
Relevant purposes include authority requirements, shareholders, lenders, investors, due diligence, restructuring, contractual reporting and Corporate Tax requirements such as QFZP status.
Does every entity have the same obligation?
No identical assumption should be applied to every entity. Confirm the current HFZA rules, legal structure, reporting purpose and any applicable waiver or submission procedure.
Should auditor approval be checked?
Yes. Before appointment, confirm the firm’s current professional licence, authority acceptance where required, authorised signatory and independence for the intended engagement.
Brainstorm’s supplied company documentation identifies the firm as a UAE licensed audit firm and an approved auditor for Hamriyah Free Zone companies. Request current credentials and confirm acceptance for your intended HFZA purpose before appointment.
Reporting requirements
Confirm the purpose.
Confirm the purpose.
Agree the right scope.
Authority procedures, tax requirements and stakeholder expectations are related, but they are not interchangeable.
QFZP requirements
A Qualifying Free Zone Person must prepare and maintain audited financial statements. This requirement is separate from the general revenue threshold applying to certain other taxpayers.
Commercial reporting
Banks, shareholders, investors and counterparties may request audited information for financing, due diligence, ownership changes or contractual reporting.
Confirm current HFZA procedures through the authority’s investor services forms and procedures. Do not assume one deadline or waiver applies to every company.
Our Hamriyah Free Zone audit services
Focused procedures.
Focused procedures.
A connected financial picture.
Choose a service on the left to reach its details. Audit work is designed around risk, materiality and the evidence relevant to your company.
01 / Independent financial statement audit
Annual external audit
Evidence supporting the reported financial positionIndependently examine financial statements and supporting accounting records for the relevant reporting period. Establish the audit purpose, applicable framework and reporting responsibilities before work begins.
- Engagement assessment and risk-based planning.
- Testing of material transactions and balances.
- Management queries and evaluation of audit evidence.
- Reporting following completion of the required procedures.
02 / Financial reporting
Audited financial statements and IFRS review
Assess accounting treatments, presentation and disclosuresReview financial statements under the applicable reporting framework, including significant accounting policies, estimates, presentation and supporting notes.
- Trial balance and general ledger review.
- Financial position, performance and relevant cash-flow reporting.
- Significant recognition, measurement and disclosure matters.
- Resolution of proposed adjustments with management.
Management remains responsible for the accounts. Preparation assistance and independent assurance require appropriate scope boundaries and safeguards.
03 / Inventory evidence
Inventory testing and stock-count procedures
Consider quantities, valuation and available count evidencePlan procedures around the nature and materiality of stock, stock movements, third-party locations and available physical-count evidence.
- Inventory listings and accounting reconciliation.
- Quantity evidence and stock-count records.
- Valuation, costing, obsolescence and provisions.
- Goods in transit and reporting-period cut-off.
Discuss stock counts early. Missing historical quantity evidence can create limitations that cannot be resolved simply by preparing a year-end spreadsheet.
04 / Manufacturing operations
Manufacturing audit procedures
Trace production activity into financial reportingManufacturing and processing businesses require an approach reflecting production records, inventory stages and the allocation of relevant costs.
- Raw materials, work in progress and finished goods.
- Production expenses and manufacturing overheads.
- Costing methods and inventory valuation.
- Obsolete stock, provisions and production-related evidence.
05 / Property, plant and equipment
Fixed assets, machinery and capital expenditure
Support significant assets with schedules and evidenceExamine material plant, machinery, equipment and other fixed assets, including relevant land and buildings where applicable.
- Fixed-asset register and ledger reconciliation.
- Additions, imported equipment and capital expenditure support.
- Disposals, depreciation and relevant accounting estimates.
- Ownership, existence and other evidence appropriate to the audit.
06 / Trading cycles
Revenue, purchases, imports and exports
Understand the transactions behind the year-end balancesTest selected revenue and purchase transactions, recognition and cut-off. Review international trade evidence in the context of the company’s transaction cycle.
- Sales, purchase invoices and significant contracts.
- Import, export and shipping documentation.
- Goods movement, goods in transit and commercial terms.
- Reporting-period allocation and supporting evidence.
07 / Working capital and financing
Banks, receivables and payables
Investigate significant balances and reconciliation differencesReview bank balances and facilities, significant customer accounts, supplier liabilities and relevant accruals. Procedures are selected according to audit risk.
- Bank statements, reconciliations and financing documents.
- Receivable schedules and supporting customer evidence.
- Supplier balances, liabilities and potential omissions.
- Ageing, subsequent transactions and unresolved differences.
08 / Group and overseas transactions
Related parties and foreign currencies
Make relationships and cross-border balances visibleReview material intercompany accounts, shareholder balances, related-party transactions and significant foreign-currency transactions or balances.
- Identify relationships and relevant financial disclosures.
- Reconcile intercompany balances and supporting agreements.
- Assess accounting for foreign currencies and exchange differences.
- Identify matters requiring separate transfer pricing or tax analysis.
09 / Financial and tax consistency
Corporate Tax and VAT reconciliation
Explain differences between accounts and tax informationWhere separately within scope, compare financial figures with Corporate Tax and VAT records. Accounting profit, VAT turnover and taxable income are not necessarily equal.
- Timing differences, provisions and depreciation.
- Exempt income, non-deductible expenses and VAT adjustments.
- Foreign exchange and related-party transactions.
- Transfer pricing adjustments and free zone tax treatment.
Audited accounts support the reporting foundation. They do not replace a separate Corporate Tax computation or establish QFZP eligibility.
10 / Completion and authenticity
Management observations and report verification
Understand the findings and check the issued reportCommunicate significant observations arising from the engagement, resolve outstanding reporting matters and complete the professional reporting process.
Stakeholders can use Brainstorm’s report-verification portal to check available details against the reference printed on an issued report.
Qualifying Free Zone Person review
A free zone licence
A free zone licence
is not a tax conclusion.
HFZA incorporation, exports or overseas customers do not by themselves establish that all income qualifies for 0% Corporate Tax.
Activities and income
Review what the company actually does, Qualifying and Excluded Activities, revenue streams, customer categories and the treatment of material transactions.
Substance and relationships
Assess operational presence, employees, expenditure, assets, related parties, transfer pricing and relevant permanent establishment exposure.
Records and financial statements
Monitor non-qualifying revenue and the applicable de minimis requirement. Prepare audited financial statements and reconcile the records with the intended tax position.
Manufacturing and processing
Assess both the activity and evidence supporting it: production facilities, machinery, raw materials, work in progress, finished goods and warehouses.
An audit examines financial reporting. A separate tax review determines whether income meets the relevant qualifying conditions.
Distribution and logistics
Review actual location, transaction structure, customers, goods movements and relevant Designated Zone conditions. Distribution income is not automatically qualifying.
A QFZP distributing goods or materials in or from a Designated Zone must also consider any additional procedures prescribed by the FTA.
Ministerial Decision No. 229 of 2025 replaced No. 265 of 2023 for Qualifying and Excluded Activities. Examples requiring fact-specific review include manufacturing, processing, qualifying commodity trading, investment holdings, specified shipping and regulated financial activities, headquarters, treasury, aircraft financing, distribution and logistics. Read the official decision.
Ongoing QFZP monitoring
Review the conditions
Review the conditions
as the business changes.
New activities, mainland sales, ownership changes and related-company transactions can change the analysis.
What a QFZP health check considers
- Free Zone Person status and actual business activities.
- Revenue streams, exclusions and non-qualifying revenue.
- Free zone, mainland, overseas and natural-person counterparties.
- Substance, assets, expenditure and operational presence.
- Related parties, arm’s-length pricing and documentation.
- De minimis compliance, audited accounts and tax reconciliation.
Why annual review matters
New markets, distribution models, manufacturing expansion, intellectual property, property income or a permanent establishment can affect the intended treatment.
Failure to meet QFZP conditions can cause loss of status from the beginning of the affected Tax Period and for the following four Tax Periods under the applicable rules.
Professional provider verification
Verify the appointment.
Verify the appointment.
Then verify the report.
An online “approved auditor” claim, informal recommendation or low quotation is not a substitute for checking credentials.
Before appointing an auditor
- Confirm the legal entity and UAE professional licence.
- Check current HFZA approval where required.
- Verify the authorised signatory and professional credentials.
- Review relevant sector experience and office details.
- Agree independence, scope, deliverables and reporting purpose.
- Check tax-agent credentials for authorised tax representation.
After a report is issued
Compare the report’s reference with the details returned by the verification portal. If information differs or a reference cannot be found, contact Brainstorm directly.
Verification supports authenticity checks. It does not replace reading the audit opinion or assessing the report’s scope and limitations.
Audit planning by business type
Different operations.
Different operations.
Different audit priorities.
Trading, industrial, manufacturing, logistics and service companies require attention to different financial risks.
Trading and import-export
Transaction volumes, stock, suppliers, overseas customers, goods in transit, credit terms and foreign currencies.
Manufacturing
Raw materials, work in progress, production overheads, finished goods, costing, obsolete stock and capital equipment.
Industrial operations
Warehouses, machinery, significant assets, capital expenditure, supplier liabilities, long-term contracts and intercompany transactions.
Logistics and distribution
Freight, warehousing, inventory movements, distribution agreements, import-export records, receivables and suppliers.
Service businesses
Revenue recognition, accrued and deferred income, receivables, employee costs, overseas customers and related-party charges.
Groups and cross-border structures
Shareholder balances, intercompany reconciliations, foreign currencies, significant agreements and tax consistency.
Our audit process
From engagement
From engagement
to final report.
Scope, information requests and timing are agreed after understanding the business and its reporting purpose.
Initial assessment
Review the HFZA licence, activity, financial year, accounting status, transaction profile and audit purpose.
Scope and quotation
Confirm engagement boundaries, deliverables, responsibilities and anticipated audit effort.
Tailored document request
Issue an information list reflecting the company’s operations, balances and reporting requirements.
Assess audit risks
Identify material balances, significant risks and the procedures needed to obtain evidence.
Perform audit procedures
Examine selected financial records, transactions, balances and relevant supporting documentation.
Management queries
Discuss differences, missing evidence and outstanding matters with management or the accountant.
Financial statements
Review accounting treatments, financial information, presentation and relevant disclosures.
Tax consistency
Where appropriately within scope, compare financial figures with VAT and Corporate Tax information.
Resolve final matters
Evaluate remaining evidence, adjustments and reporting matters before completion.
Issue the audit report
Issue the final report following completion of the relevant professional procedures.
Documents required
Prepare the evidence.
Prepare the evidence.
Reduce avoidable delays.
This is a starting checklist. The auditor determines the final request list for the company and engagement.
Corporate and accounting records
- HFZA licence, constitutional documents and shareholder information.
- Trial balance, general ledger and financial statements.
- Bank statements, reconciliations and facility documents.
- Sales, purchase and significant contract records.
- Import and export documentation.
- Previous audit report and relevant prior-year information.
Schedules and supporting evidence
- Inventory listings and stock-count records.
- Fixed-asset register and capital expenditure support.
- Receivable and payable schedules.
- Related-party and intercompany schedules.
- VAT returns and relevant Corporate Tax records.
- Documents supporting material transactions and estimates.
Common audit readiness issues
Resolve the gaps
Resolve the gaps
before they grow.
Weak underlying records can delay reporting or limit the evidence available to the auditor.
Incomplete records
Missing invoices, unreconciled books, unrecorded liabilities and unsupported accruals.
Stock and asset differences
Inventory mismatches, missing count evidence and incomplete plant or machinery schedules.
Tax and cross-border inconsistencies
Foreign-currency errors, unexplained related-party balances and unsupported QFZP assumptions.
Separate scopes. Coordinated information.
Connect the audit
Connect the audit
with your tax records.
Audit, Corporate Tax and VAT serve different purposes. Coordination should preserve the required professional independence.
Corporate Tax and QFZP support
Registration, return preparation, taxable income calculations, qualifying conditions, revenue classification, de minimis, transfer pricing and tax reconciliation.
VAT and FTA assistance
Registration, deregistration, returns, imports, exports, reverse charge, health checks, historical corrections and authorised FTA correspondence where agreed.
Tax representation requires the appropriate appointment and scope. Explore Brainstorm’s FTA tax-agent support . Financial statement audit, accounting assistance and tax advice remain distinct professional engagements.
Why Brainstorm
Operational understanding.
Operational understanding.
Clear reporting.
A financial review shaped around the company’s actual operations, evidence and reporting requirements.
Relevant audit priorities
Attention to trading cycles, inventory, plant, machinery, imports, exports, foreign currencies and related parties.
Connected financial knowledge
Understand how audited financial figures relate to separate Corporate Tax, QFZP and VAT analysis.
Local Sharjah support
Support through Brainstorm’s UAE presence, including its SAIF Zone office, with clear engagement responsibilities and report-verification access.
Common questions
Before your
Before your
HFZA audit begins.
Clear answers about auditor appointment, evidence, QFZP and reporting.
Is Brainstorm an HFZA-approved auditor?
Brainstorm’s supplied company documentation identifies it as approved for Hamriyah Free Zone companies. Request current approval evidence and confirm acceptance for your intended reporting purpose before appointment.
How should an HFZA auditor be selected?
Check the legal entity, professional licence, current authority approval where required, authorised signatory, sector experience, independence, engagement scope and report-verification process.
Does every HFZA company have identical audit requirements?
No. Confirm the entity’s legal structure, current authority instructions, reporting purpose, tax status and contractual obligations. QFZPs separately require audited financial statements.
Does an HFZA licence guarantee 0% Corporate Tax?
No. The company must meet applicable QFZP conditions, and the 0% treatment applies to Qualifying Income. Free zone incorporation alone does not establish the tax outcome.
What is a Qualifying Free Zone Person?
A Free Zone Person meeting the prescribed Corporate Tax conditions, including relevant income, adequate substance, transfer pricing and other requirements.
Does a QFZP need audited financial statements?
Yes. Ministerial Decision No. 84 of 2025 requires a QFZP to prepare and maintain audited financial statements, independently of the general revenue threshold for certain other taxpayers.
What does a QFZP review examine?
Entity status, activities, revenue, counterparties, substance, related parties, transfer pricing, de minimis compliance, audited financial statements and the intended tax treatment.
What if a company fails the QFZP conditions?
Under the applicable rules, it can lose QFZP status from the beginning of the affected Tax Period and for the following four Tax Periods. Seek advice when circumstances change.
What is vendor verification?
Confirming that the professional provider has the relevant licence, credentials, current authority acceptance where required and capability to perform the intended engagement.
Can a Brainstorm audit report be verified?
Use the report-verification portal with the reference printed on the report. If details differ or a reference is unavailable, contact Brainstorm directly for clarification.
Can audit and Corporate Tax work be coordinated?
Yes, subject to separate engagement scopes and appropriate auditor-independence safeguards. An audit opinion does not replace a separate Corporate Tax computation or QFZP assessment.
Can the audit include material inventory?
Procedures can be planned around stock nature, quantity, materiality, locations, movements, valuation and available count evidence. Discuss count arrangements early.
Can audited figures be used for tax filing?
They provide a financial reporting foundation. Tax adjustments, exemptions, qualifying conditions, related parties and transfer pricing still need separate analysis.
How long does an HFZA audit take?
Timing depends on record quality, volume, inventory, assets, cross-border transactions, adjustments, supporting evidence and responses to queries. Agree a realistic schedule after the initial review.
What should be shared for an initial quotation?
Start with the HFZA licence, business activity, financial year, latest trial balance, approximate revenue and previous audit report where available. Agree a secure method before sharing records.
Can Brainstorm help with VAT and FTA correspondence?
Separately scoped support can cover VAT, Corporate Tax, reconciliations, corrections and permitted FTA interactions. Confirm credentials, authorisation and engagement responsibilities.
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Request an HFZA audit quote
Prepare for your
Prepare for your
next reporting period.
Tell us your business activity, financial year, audit purpose and current accounting status. We’ll discuss the appropriate scope, document requirements and quotation.
