Economic Substance Regulation In UAE
Economic Substance Regulation (ESR) in UAE
As per Cabinet Of Ministers Resolution No. 31 Of 2019 Concerning Economic
should comply with the requirements and shoulddothe necessaryinitial filing
withtheir relevant authorityto demonstrategood corporate governance. This
will be applicable to onshore and Free Zonecompaniesthatengage inanyof
the“Relevant Activities” as specified in the Regulation.
How to Comply With Economic Substance Requirements And Demonstrate
Good Corporate Governance ?
If Your Entity Is :
1. Within ESR Scope
2. Out of ESR Scope
Within ESR Scope
The company should take steps and actions to comply with the law.
Annualreporting is required under new legislation.
Out of ESR Scope
Still the nominal filing
ESR Notification Date For Different On Shore and Free Zones Vary.
Companies performing Relevant activities that fail to meet the new requirements
or ifinaccurateinformationcanexpecttobe thesubject ofenforcement
proceedings from Authority including administrative penalties. If failure to meet
therequirementsforconsecutiveyears, the penaltieswillincrease and might
force the authorities to suspend,revoke or deny renewal of an entity’s license.
- The Economic Substance Regulation (ESR) Notification Due Date Is Different For Company Depending on it’s Legal Location In The UAE (2020 Due Dates).