Economic Substance Regulations
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The UAE Has Economic Substance Regulations in Place
The UAE applies Economic Substance Regulations (ESR) to local companies located in the country, including businesses in the free zones and those engaged in any of the defined ‘relevant activities’. These companies must provide the regulatory authorities with economic substance notifications, including preliminary information about the activities. This notification is a prerequisite for submitting an economic substance report by the company.
Activities to Which Economic Substance Regulations Apply
Investment Fund Management Business
Holding Company Business
Intellectual Property Business
Distribution and Service Centre Business
Economic Substance Report and Notifications Have to be Submitted Annually
Companies and establishments that are involved in ‘relevant activities’ in the UAE are required to submit economic substance notifications and reports to the regulatory authority on an annual basis, in accordance with the provisions of the Cabinet Resolution, which stipulates the submission of these notifications and reports. Failure to adhere to this will result in sanctions.
A maximum period of 6 months is granted from the end of the fiscal year.
Economic Substance Reports
A maximum period of 12 months is granted from the end of the fiscal year.
Submit Economic Substance Notifications
Companies are required to submit Economic Substance Regulations’ notifications and reports via the e-platform on the Ministry of Finance’s website. Companies licensed by the local economic development departments, Fujairah Municipality or Dibba Fujairah Municipality ‘to which the decision applies’ must apply through the platform and select the Ministry of Economy, for the following related activities only:
Distribution and Service
Laws and Regulations Related to Economic Substance Regulations in the UAE
- Annual Economic Substance Notification Filing Guide
- Reports Filing Portal
- Notice regarding ESR Filing Requirements and Deadlines
- Relevant Activities Summary
- Cabinet of Ministers Resolution No (57) of 2020 Concerning Economic Substance Requirements
- Cabinet Resolution No (44) of 2020 Organising Reports Submitted by Multinational Companies
- Ministerial Decision No (100) for the year 2020 on the Issuance of Directives for the Implementation of the Provisions of the Cabinet Decision No (57) of 2020 Concerning Economic Substance Requirements