What is ESR?
The Economic Substance Regulation (ESR) requires a Licensee to demonstrate that: The Licensee and Relevant Activity are being directed and managed in the UAE; the relevant Core Income Generating Activities ("CIGAs") are being conducted in the UAE; and the Licensee has adequate employees, premises and expenditure in the UAE.
The Regulations apply to financial years commencing on or from 1 January 2019. Entities that are within the scope of the Regulations are required to submit an annual Notification form to their Regulatory Authority, and complete and submit to the same Regulatory Authority an Economic Substance Report within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019). An entity is not required to meet the Economic Substance Test and file an Economic Substance Report for any financial period in which it has not earned income from a Relevant Activity or if it meets the conditions for being exempt. A Notification form will need to be submitted regardless. Failure to comply with the Regulations can result in penalties, as well as other administrative sanctions such as the suspension, revocation or non-renewal of the entity’s trade license or permit.
Understand the ESR provisions for your business
Confirm what Economic Substance Regulations apply to your business
Get your latest financial statements reviewed by experts
Get assistance in preparing your Economic Substance Notification & Return
File your Economic Substance Notification with the relevant authority
Build an action plan to better achieve Economic Substance Test Parameters
Avoid fines and penalties
Notification filing assistance