Over the last few years, Dubai has financially developed a lot and doing business has become a lot easier. Regulations such as Value Added Tax (VAT) and Anti-Money Laundering (AML) have been introduced to make sure there is strict compliance to tax policies set by the government. Along these lines, ESR (Economic Substance Regulation) has been introduced to increase the levels of compliance. This step was taken to ensure that the taxation policies in the UAE are complying with global standards set by OECD (Organisation for Economic Co-operative Development). This was done to prevent any practices of tax evasion. ESR demonstrations need to be done by companies who are doing relevant activities in Dubai to ensure ESR UAE compliance, by either mainland, free zone or offshore companies. In UAE, ESR notification UAE came into force on the 30th of April 2019, and guidance on the regulations were introduced on 11th September 2019. Further amendments were made to ESR Legislations on 10th August 2020. ESR applies to all legal companies and entities that carry out ‘Relevant Activities’. Relevant Activities include business-like

ESR In UAE

  • Banking Business
  • Shipping Business
  • Distribution and Service Centre Business
  • Insurance Business
  • Headquarters Business
  • Lease-Finance Business
  • Investment Fund Management Business
  • Intellectual Property Business
  • Holding Company Business

The only companies who are exempt from filing an ESR Form UAE are the following. They are also known as Exempt Licensees.

  • Companies that are deemed to be tax filing or tax resident outside the UAE
  • Investment Fund companies
  • Companies that are owned by residents of UAE, and that are not part of any MNCs or they carry out business only in the UAE
  • A foreign company whose income is taxed by a jurisdiction outside UAE

Exempted Licensees need not file an ESR Report, but need to file an ESR Notification Form UAE to verify their exempt status.

ESR filing Services in UAE

For more Detailed information about ESR, Visit: Economic Substance Regulations(ESR) Guidelines

Related Information

Economic Substance Regulations UAE Notification

Economic Substance Dubai

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