Audit of foreign (offshore) companies
The legal company Jurisprudential provides a full range of professional services in the field of auditing and accounting. Having the necessary knowledge allows us to prepare a report in accordance with the law, preventing penalties and other unfavorable situations.
- Audit of foreign (offshore) companies – legal requirements and standards.
- Why is an audit carried out and in what cases is it necessary?
- Audit requirements for resident and non-resident companies.
- What kind of reporting is there?
- Deadlines for reporting.
- What are the consequences of late submission of reports?
- Why is it better to entrust report preparation to professionals?
- How to prevent legal liability for late submission of reports?
- What should a company do if it did not operate during the reporting period?
- Preparation of documents for reporting.
AUDIT OF FOREIGN (OFFSHORE) COMPANIES
Audit is a procedure for checking a company’s financial statements for compliance with legal regulations. It is carried out after accounting and financial reporting, which consists of collecting data from the company to the specialist. The contractor will be able to perform his task efficiently if he has passed the certification of standard local or international accounting policies. An international license is required when conducting an audit in accordance with banking requirements or for the Securities and Exchange Commission (SEC).
Why is an audit carried out and in what cases is it necessary?
Outsourcing of accounting services is often used by foreign enterprises. In addition to submitting financial statements, an annual audit is important, which public joint stock companies, as well as companies registered in Malta and Cyprus, cannot do without.
A tax audit in the UAE may be needed for various counterparties, including investors, banking institutions, and free zone administrations. Despite the fact that reporting here is simplified compared to other countries, it has its own requirements. For example, information on the income and expenses of a company operating in the UAE must be prepared in both Arabic and English.
Tax auditing in Europe (EU) is in most cases simplified for companies with a small turnover. They are exempt from this procedure, with the exception of holding companies whose financial performance is assessed based on a consolidated report with branches.
Tax audit in the UK and its necessity is determined depending on the annual turnover, asset value and staff of the company. By default, financial statements are submitted in full in England. It includes a balance sheet, income statement, notes to the balance sheet and a directors' report.
Audit requirements for resident and non-resident companies
Audit of foreign (offshore) companies
The difference between non-resident companies and resident ones is their exemption from taxes at the place of registration. But audit is mandatory for all businesses registered in Singapore, Hong Kong and EU countries. Even if the company is not functioning and is included in the “dormant” category, it must undergo this procedure in a timely manner.
Offshore companies do not provide information about their activities when registering in the jurisdictions of Belize, Nevis, BVI and Seychelles. But there are exceptions, due to which outsourcing of accounting services and auditing, performed efficiently by professionals, is relevant.
What kind of reporting is there?
Medium and large companies usually submit 5 reporting forms. Among them it is worth highlighting:
- The administrative report contains the legal address, information about shareholders, any changes and is submitted to the authorized bodies, including the Registrar, House of Companies.
- The tax report consists of financial income received for a certain period and is submitted along with the financial report.
- The financial report contains data on the financial position and is completed in accordance with international standards.
LLPs in the UK do not have to pay income or deal with tax returns. This is possible by submitting documents confirming that the company does not operate at the place of registration.
Jurisprudential LTD accounting services and audit will take care of all the details. We will prepare all the necessary documents and reports, advising you on all issues in advance.
Reporting deadlines
Submission of financial statements in the UAE, European Union and other countries are different. The timing of this information varies by jurisdiction. Filing of financial statements in the European Union is carried out according to a calendar. If in the UK the end of the financial year depends on the time of registration of the company, then in Singapore and Hong Kong this decision is made by the Board of Directors.
What are the consequences of late submission of reports?
Violation of deadlines for submitting reports threatens the liquidation of the company, fines and criminal penalties. In countries such as Cyprus, the Netherlands and Malta they are fixed, while in the UK and Denmark they are charged depending on the number of days of delay. If the violation is repeated, the amount of the fine is doubled. If fines are not paid, a penalty is incurred, which stops accruing on the day the funds are credited to the treasury account.
To prevent such situations, contact our lawyers, because we outsource accounting services for companies in Europe and other countries. By cooperating with us, you will receive a timely reminder to submit reports.
Why is it better to entrust report preparation to professionals?
Preparing financial statements requires knowledge of foreign languages, IFRS and GAAP standards, tax requirements, and filing software. Doing this independently often wastes time and may result in late filing. The best solution is to consult with a specialist who will provide accurate financial and tax information for the company at its registered address. If you are unable to obtain an audit from your agent, contact us for a consultation—we can always find a solution.
How to prevent legal liability for late submission of reports?
The company must know the end dates of reporting periods and submit a declaration at least 6 days before their occurrence. The sooner you seek help from our lawyers, the greater the chances of preventing the liquidation of the company and other troubles.
Filing a tax return in Europe and other countries is a task that we are guaranteed to handle. We regularly monitor changes in legislation, so we are always aware of all changes and current requirements.
What should a company do if it did not operate during the reporting period?
If a company does not operate, it must provide evidence in the form of zero reporting. Otherwise, if they are not submitted on time, a fine will also be charged.
Jurisprudential's accounting services in the UK (London) are provided with due consideration for all possible sanctions and their prevention. In this country, failure to file reports is considered tax evasion and illegal business activity. As a result, authorized bodies assess taxes independently, based on the company's income history. If you don't want your dormant company to be assessed taxes exceeding £10 (and such cases have been recorded), prepare your reports in advance.
Forced liquidation of a company occurs when there are regular violations. In the UK this is especially strict, so you can get such a punishment even for ignoring fines for one financial period. In Cyprus, providers and nominee directors of companies can initiate liquidation proceedings by resigning from their positions, appointing as their successors the beneficiaries of the companies and passing on to them responsibility for the company's failure to comply with tax obligations. This resignation means that the client effectively loses control of the company.
Preparation of documents for reporting
Accounting services in Europe include preparation of documents for reporting. This is a scrupulous process that requires knowledge of the jurisdiction in which the company is registered. You also need to prepare the following information:
- Financial reports (bank statements, profits, losses).
- Tax returns.
- Audited reports.
- Personnel reporting.
In some industries, companies may need an expanded list of documents that need to be provided for annual reporting. Much also depends on the jurisdiction, so accounting services in the UAE may differ from those in Europe.
All papers can be submitted electronically using copies of documents. Our law firm will deal with all the nuances regarding updating the software, choosing a reliable ACCC and checking government agencies that accept electronic reports.
The client, in turn, must prepare the information and issue it to its auditor, in accordance with BEPS standards and the OECD action plan aimed at preventing unlawful deliberate reduction of the tax base. The company provides information about shareholders, constituent documents, structure, trust declarations, passport data, place of residence and welfare of beneficiaries. If these tasks are not fulfilled by the client, the auditor may refuse to conduct further audits.
Comprehensive consulting: Taxes, Audit, Accounting, SOF
How can our company help?
The legal company Jurisprudential will provide a full range of professional services in the field of auditing and accounting. Having the necessary knowledge allows us to prepare a report in accordance with the law, preventing penalties and other unfavorable situations. You can contact us for:
- preparing a quality audit;
- preparation of financial statements, taking into account the jurisdiction in which the company is registered;
- tax planning;
- consultations on financial management.
A team of qualified lawyers will be able to quickly solve various problems, so contact us to protect your business and provide it with stable development without problems with the Law.