Economic Substance Regulation
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Economic Substance - Filing & notification
ESR regulations requires UAE mainland and free zone companies and certain business that fall within the relative activities to show and maintain required “economic presence” in the UAE for the business activities their license is issued. The purpose is to ensure all business report actual profits with the corresponding business activity.
Regulatory authorities for ESR
| Federal Entities Ministry of Economy Central Bank Insurance Authority Security and Commodities Authority | Free Zones Abu Dhabi Abu Dhabi Global Market Media Zone Authority Dhabi Abu Dhabi Airports Free Zone Abu Dhabi Ports MASDAR City Dubai Dubai Airport Free Zone Dubai Healthcare City Authority Dubai International Financial Center Meydan Dubai South / Dubai Aviation City Jebel Ali Free Zone Authority/ DP World Dubai World Trade Center International Humanitarian City Dubai Development Authority Dubai Silicon Oasis Dubai Maritime City Dubai Multi Commodities Centre | Sharjah Sharjah Airport International Free Zone Authority Hamriyah Free Zone Authority Sharjah Media City (Shams) Sharjah Publishing City Sharjah Research Technology and Innovation Park Sharjah Healthcare City Ajman Ajman Free Zone Authority Ajman Media Free Zone Authority Ras Al-Khaimah RAK International Corporate Centre Ras Al Khaimah Economic Zone RAK Maritime City Um Al-Quwain UAQ Free Trade Zone Fujairah |
Requirements
- Business conducts the necessary revenue generating activity and managed directly without external influence
- Appropriate number of qualified full-time employees with regards to the activity who are physically present in the company irrespective of their type of employment.
- Convincing amount of expenditure recorded for the company and physical assets.
- Businesses may outsource the revenue generating activity provided they are able to monitor, control and supervise the outsourced activity done by the outsourcing partner
- Board meeting are carried within the state, recorded and minutes written signed by the board directors attendign the meeting. All data should be kept within the state.
What information is needed?
Both ESR eligible and exempted business are required to notify the regulatory authority for the financial year with the following information
- The Relevant Activity
- Revenue generated
- The date of commencement and end of financial year
- Any other information or documents as may be requested by the Regulatory Authority.
- Operating expenses and aspect
- Location of place of business. If required details of property or equipment used.
- Number of full time employees with qualifications
- Income generating acitivty with regards to the relevant activity
- Financial statements
- A declaration whether it satisfies Economic Substance test. In case of intellectual property business, a declaration as to whether or not it is a high risk IP Licensee
Support
For evaluation of your business whether eligible for ESR or exempt use the contact form to send a request. Our ESR consultant will get in touch with you.