UAE Economic Substance Regulation and Related ESR Compliance

UAE Economic Substance (ESR) Advisors in UAE

 

We are providing Economic Substance Reporting services in UAE. We can help your business in identifying the applicability of ESR, preparation of ESR Reports, timely filing of notification and making sure that proper procedures are being followed to ensure compliance with regulations.

Our Core Services related to Economic Substance Reporting in UAE

  1. ESR Notification Filing

  2. ESR Report Filing

How we can assist you with Economic Substance Regulations Requirements

  • Review your business structure

  • Determine applicability of economic substance regulations

  • Determine business’s current level of compliance with Economic Substance Regulations

  • Review of current economic substance deployed in UAE (Assets, Business activity, Employees, evidence of management in UAE)

  • Determine and suggest remedial options (i.e. Operations Restructuring, Additional substance injection, Outsourcing)

  • Design policies to ensure compliance with the economic substance tests

  • Preparation and submission of annual notification

  • Preparation and submission of economic substance reports

  • Preparation and submission of annual accounts

 

ESR Service Package

 

With the introduction of ESR in UAE, the regulatory and legal requirements have increased for businesses carrying out relevant activities. For UAE registered businesses carrying out most of their business activities outside UAE, timely compliance with the ESR regulations is very necessary to avoid sanctions and penalties. Our professional experts will help your business in ensuring compliance by designing custom and economical solutions for your business.

Basic ESR Introduction

 

The UAE Economic Substance Regulations was introduced on 30 April 2019 (Cabinet of Ministers Resolution No. 31 of 2019). Amendments were introduced to Resolution 31 by the Cabinet of Ministers by way of Cabinet of Ministers Resolution No. 57 of 2020, which repealed and replaced Cabinet of Ministers Resolution No. 31 of 2019. The law is now in force.

The Economic Substance Regulations aim to ensure that businesses, which perform geographically   mobile activities have economic substance in the jurisdiction where its income is being reported. This means that businesses will need to demonstrate that the income generated in the UAE adequately correspond with the economic activities actually undertaken in the UAE.

 

 

Relevant entities (defined as Licensees) within the scope of the Regulations are required to prepare and submit economic substance declarations and are required to meet an Economic Substance Test if they generate relevant income from such relevant activities.

All Licensees are obliged to self-assess whether or not they performed any Relevant Activities in the reportable financial year.

A UAE entity carrying out any relevant activity mentioned below will be defined as a Licensee and will be subject to ES regulations.

  • Banking Business

  • Insurance Business

  • Investment Fund management Business

  • Lease - Finance Business

  • Headquarters Business​​

  • Shipping Business

  • Holding Company Business

  • Intellectual Property Business (“IP")

  • Distribution and Service Centre Business​

To simplify the assessment either a company is carrying a relevant activity or not, we have drafted few simple questions and if any of the answers is yes, then you need to contact us for detailed assessment.

  • Are you carrying business of Banking, Insurance, Shipping or Investment fund management business?

  • Does your company hold any intellectual property like software/app, patent, copy right etc.?

  • Are you managing or controlling other foreign group companies?

  • Have you provided loan, lease or any other type lease or financing to other companies?

  • Is your company purely a holding company for other group companies?

  • Are you providing services to any group or connected foreign companies?

  • Are you buying products from any group or connected foreign companies?

Contact us today at info@aabica.com +971 56 633 0093 for further discussion and assessment.