ECONOMIC SUBSTANCE REGULATION (ESR)
The Economic Substance Regulation requires companies and other business forms registered in the UAE carrying one or more Relevant Activities to have economic substance in relation to these activities in the UAE and to comply with notification and return filing obligations.
RELEVANT ACTIVITIES includes the following:
– Banking Businesses
– Insurance Businesses
– Investment Fund Management Businesses
– Lease-Finance Businesses
– Headquarters Businesses
– Shipping Businesses
– Holding Company Businesses
– Intellectual Property Businesses
– Distribution and Service Centre Businesses
The updated Economic Substance Regulations (Cabinet Resolution No. 57 of 2020) repeals and replaces the previous regulations, Cabinet Resolution No. 31 of 2019, whereas, also provides updated guidance for the clarification of the new “Amended Regulations” Ministerial Decision 100 of 2020.
An increase of administrative penalty amounting to AED 50,000/- shall be imposed on a licensee or exempted licensee for committing violations/negligence such as failure to submit relevant information or documentation and failure to submit economic substance test for each financial year in accordance with the provisions of this resolutions.
AL SAADI & ASSOCIATES AUDITING (CHARTERED ACCOUNTANTS) is ready to assess whether your business is carrying a relevant activity, help to file the notification, and support in compliance with the issued UAE Cabinet of Ministers has issued Cabinet Resolution No. 57 of 2020