Cabinet Resolution No.57 of 2020, which included the requirement for UAE enterprises to maintain an adequate “economic presence” in the UAE in relation to the activities they carry out, came into effect in April 2019. The Regulations, which were modified in August 2020, were implemented in April 2019.

Economic substance criteria apply to all UAE onshore and free zone enterprises, as well as certain other business types, for fiscal years beginning on or after January 1, 2019. These criteria apply to all UAE onshore and free zone enterprises, as well as certain other business types, that participate in one or more “Relevant Activities” in the UAE.

Entities that fulfil the requirements to be deemed “exempt” are prevented from demonstrating their commercial presence in the United Arab Emirates. Such organisations must submit a Notification with the IRS and give all necessary information in order to maintain their exemption status.

This move brings the UAE into line with other jurisdictions that have recently passed economic substance legislation (e.g., the Cayman Islands and Bermuda), and it demonstrates the UAE’s determination to address concerns about profits derived from certain mobile business activities being transferred to “no or nominal tax jurisdictions” without resulting in equivalent local economic activity.

Companies operating in the United Arab Emirates must determine whether the economic substance law applies to their operations, which operations are subject to the law, and how they will ensure that the economic substance standards for each Relevant Activity are met. This qualitative and quantitative examination covers a wide range of themes, including operations, finance, taxation and transfer pricing, legal issues, and governance.

For Service Support:
Call us Now
+971 45 570 204

A leading provider of assurance, tax, and legal services as well as business consulting services in the UAE, KGRN is well-suited to assisting you with the determination of whether the UAE substance criteria apply to your business/entities and how to ensure that you have the necessary economic substance in the UAE.

You may now use our new Economic Substance Regulation online tool to finish your application.

Need assistance drafting your Economic Substance Report in order to submit it on time? Contact us. Make use of our free KGRN Economic Substance Reporting (ESR) Tool to do any of the following:

  1. In pdf format, you can see your recommended responses to all of the questions in the Economic Substance Report, which will allow you to interpret them and obtain internal approvals before submitting them for formal completion on the Ministry of Finance’s web site, which is expected to be available in December.
  2. Understanding what information and supporting paperwork you will need to submit/upload in advance is essential; and
  3. Using our established techniques and databases/information, we can identify gaps and potential areas of risk in your company’s ability to meet the Economic Substance Tests (ies).

Our Services

Trending Service
Will Writing Services in Dubai, UAE for Muslims and Non-Muslims Business Valuation Service Dubai Mainland Company Formation Service Dubai ICV Certificate Service Dubai

Audit services in Dubai

Accounting and Bookkeeping services in Dubai

ICV certificate

ADNOC ICV Certification Agencies

Internal Audit Firms in Dubai

For Service Support:
Call us Now
+971 45 570 204

Related posts:

People's hands are seen collaborating on financial charts and documents at a white table, with a calculator, glasses, money, and pencils—clearly showcasing the meticulous work of a Chartered Accountants Team. KGRN Chartered Accountants in Dubai offers a comprehensive range of services including audit and assurance, accounting and bookkeeping, tax consulting and compliance, business advisory, corporate finance, management consulting, internal audit, forensic accounting, company formation, and legal and secretarial services. Each service is tailored to support businesses in managing their financial operations effectively and ensuring compliance with regulatory requirements.ESR Notification UAE People's hands are seen collaborating on financial charts and documents at a white table, with a calculator, glasses, money, and pencils—clearly showcasing the meticulous work of a Chartered Accountants Team. KGRN Chartered Accountants in Dubai offers a comprehensive range of services including audit and assurance, accounting and bookkeeping, tax consulting and compliance, business advisory, corporate finance, management consulting, internal audit, forensic accounting, company formation, and legal and secretarial services. Each service is tailored to support businesses in managing their financial operations effectively and ensuring compliance with regulatory requirements.New Economic Substance Regulations for UAE Companies People's hands are seen collaborating on financial charts and documents at a white table, with a calculator, glasses, money, and pencils—clearly showcasing the meticulous work of a Chartered Accountants Team. KGRN Chartered Accountants in Dubai offers a comprehensive range of services including audit and assurance, accounting and bookkeeping, tax consulting and compliance, business advisory, corporate finance, management consulting, internal audit, forensic accounting, company formation, and legal and secretarial services. Each service is tailored to support businesses in managing their financial operations effectively and ensuring compliance with regulatory requirements.UAE Economic Substance Regulations People's hands are seen collaborating on financial charts and documents at a white table, with a calculator, glasses, money, and pencils—clearly showcasing the meticulous work of a Chartered Accountants Team. KGRN Chartered Accountants in Dubai offers a comprehensive range of services including audit and assurance, accounting and bookkeeping, tax consulting and compliance, business advisory, corporate finance, management consulting, internal audit, forensic accounting, company formation, and legal and secretarial services. Each service is tailored to support businesses in managing their financial operations effectively and ensuring compliance with regulatory requirements.What is ESR filing? People's hands are seen collaborating on financial charts and documents at a white table, with a calculator, glasses, money, and pencils—clearly showcasing the meticulous work of a Chartered Accountants Team. KGRN Chartered Accountants in Dubai offers a comprehensive range of services including audit and assurance, accounting and bookkeeping, tax consulting and compliance, business advisory, corporate finance, management consulting, internal audit, forensic accounting, company formation, and legal and secretarial services. Each service is tailored to support businesses in managing their financial operations effectively and ensuring compliance with regulatory requirements.What is ESR compliance?