Shams (Sharjah Media City) Audit Requirement

Shams (Sharjah Media City Free Zone Authority) publishes its Companies and Licensing Regulations 2024, which amend the 2017 Regulations, on its rules and regulations page. Part 11, Accounts and Audit, is clear.

• Article 62.1: the directors must cause accounts to be prepared for each financial year.
• Article 62.2: the accounts must follow applicable accounting principles or standards, show a true and fair view including the profit or loss, and meet any requirements the Authority sets.
• Article 62.3: the accounts must be approved by the directors and examined and reported on by an auditor. Once approved and examined, the manager signs them.
• Article 62.5: for each financial year, the directors must lay the signed accounts and the auditors' report before a general meeting.

Unlike some zones, Part 11 contains no turnover threshold, small-company exemption or dormant-company waiver. Article 63 adds the usual record-keeping duty: records that show and explain transactions and disclose the financial position with reasonable accuracy at any time.

Part 11 is written for companies. A branch should ask Shams what it needs, and note that a foreign parent applying for a branch must provide its audited financial statements for the last three years under the Regulations.

Shams is unusual in fixing the financial year. Under Article 64, the first financial year starts on incorporation and lasts at least six and no more than 18 months. After that, every company's year runs from 1 January to 31 December. So every Shams audit covers a calendar year.

The Regulations do not set a number of days for filing audited accounts with the Authority. They do expect submission: Article 39.1 lists submission of audited financial statements among a corporate secretary's administrative tasks, alongside licence renewal. Renewal itself is governed by Article 12, which says a licensee must renew before expiry, subject to any conditions the Authority prescribes. Ask Shams for the renewal checklist and the date by which it wants the audited accounts. Our free zone audit deadlines page records that no Shams deadline is published in an official source.

Article 13 allows cancellation where a licensee fails to renew for more than six months after expiry, so an unfinished audit that holds up renewal is a real risk.

If you need audited statements for corporate tax, the return is due nine months after the period ends: 30 September for a 31 December year end.

Because the first year must last between six and 18 months and then align to 31 December, the incorporation date decides how long the first audited period is.

• Incorporated 1 March 2025. A first year ending 31 December 2025 lasts ten months, which is within the six to 18 month range. The first audit covers March to December 2025, and later audits cover each calendar year.
• Incorporated 1 September 2025. A first year ending 31 December 2025 would last only four months, below the six-month minimum. The first year therefore runs to 31 December 2026, a 16-month period, and the first audit covers all 16 months.

In both cases, if the company claims QFZP status and its tax period matches the financial year, the audited statements also support the corporate tax return due nine months after that period ends.

The Regulations define an auditor as 'a person or corporate entity approved by the Authority that conducts an audit'. In other words, Shams expects its approval to apply. We did not find a list of approved auditors published on the Shams website, so ask Shams to confirm that your chosen firm is acceptable before you sign the engagement letter.

Federal rules apply as well. Under Federal Decree-Law No. 41 of 2023 the auditing profession is regulated at federal level, so check that the firm and signing partner are on the Ministry of Economy register.

Appointment works like this:

1. Shareholders appoint or remove the auditor by ordinary resolution (Article 65.1).
2. The company notifies Shams of the appointment, resignation or removal in the prescribed form within 15 business days (Articles 16.1(e) and 65.2).
3. The auditor examines and reports on the accounts; the directors approve and the manager signs them (Article 62.3).
4. The accounts and report go before a general meeting (Article 62.5).

See approved auditors by free zone for how other authorities run their lists.

The Regulations contain no fixed fine for a missing audit. Article 73 instead gives the Authority a general sanctions power for any breach of the Regulations. Shams may impose a fine of an amount it determines and one or more further sanctions, including:

• a direction to stop and remedy the breach;
• an additional fine;
• disqualification of an individual from acting as a director, shareholder or manager in the City;
• suspension of the licence;
• revocation of the licence and strike-off from the register.

Article 73.3 says Shams may publish a list of fines. We have not seen a published Shams fine for audit breaches, so we do not quote an amount. Failing to have accounts audited, or failing to notify an auditor change, is a breach of Articles 62 and 65, so the Article 73 powers apply.

Shams's rule and the corporate tax rule point to the same document. For tax periods starting on or after 1 January 2025, Ministerial Decision No. 84 of 2025 requires audited financial statements for every Qualifying Free Zone Person regardless of revenue, any taxable person with revenue above AED 50 million, and every tax group. Ministerial Decision No. 82 of 2023 covered earlier periods.

Because Shams already requires an annual audit, a company claiming the 0% rate should ask its auditor for one set of statements that meets both the Regulations and the FTA's requirements. A QFZP distributing goods in or from a Designated Zone should also check FTA Decision No. 6 of 2026 on agreed-upon procedures. For the tax picture across Sharjah's zones, see Sharjah free zones corporate tax.