Navigate Economic Substance Regulations with Expert ESR Services

The UAE issued economic substance regulations (the “Regulations”) in April 2019, repealed by Cabinet Resolution No.57 of 2020 in August 2020, which introduced a requirement for UAE entities to maintain an adequate “economic presence” in the UAE relative to the activities they undertake.

The UAE economic substance requirements apply to all UAE onshore and free zone companies and certain other business forms that undertake one or more “Relevant Activity” for financial years commencing on or after 1 January 2019.

Entities that meet the requirements to be treated as “exempt” do not need to demonstrate economic presence in the UAE. However, such entities are required to file a Notification and provide sufficient evidence to support their exempt status.

UAE entities will need to assess whether and which of their activities fall within the scope of the economic substance regulations, and how to ensure they meet the economic substance requirements in respect of each Relevant Activity. This is both a qualitative and quantitative assessment that would involve consideration of operational, financial, tax / transfer pricing, legal and governance matters.

e79f7223-4c88-4749-937d-2a15443b173e

How we can help you

  • Impact assessment
  • Gap analysis and action plan
  • Reporting
We can assess which entities and activities are within the scope of the revised economic substance rules and/or whether the entity can benefit from any of the exemptions in the Regulations. This is a critical step for all businesses to determine what to notify to the Regulatory Authorities, and what economic substance requirements need to be met.

Need help preparing for the filing of your Economic Substance Report in advance of your actual submission?