We provide ESR UAE services to assist businesses in remaining compliant with the requirements of the UAE Economic Substance Regulations. We begin by reviewing group structure and activities, determining ESR applicability, and assessing compliance with ESR UAE. We then decide on remedial steps, create ESR-compliant procedures, and aid with notification and Economic Substance Regulations. In addition, we offer training on Economic Substance rules and policies.
As part of its obligation as an OECD member, the UAE adopted the OECD Inclusive Framework on BEPS in May 2018. On 30 April 2019, H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, released the Cabinet of Ministers Resolution No. (31) for 2019 concerning Economic Substance Regulations (ESR/Regulations). The Ministry of Finance released directions (Ministerial Decision No. 215) with the goal of providing additional information about the legislation of Economic Substance Regulations in the UAE.
The main goal of the ESR UAE is to protect the reputation of the State and its entities that operate within the UAE- whether onshore, Free Zone, or offshore- by ensuring that income generated from Relevant Activity has economic substance and providing evidence that incorporation in the UAE was not motivated by the privileged tax regime.
The Economic Substance Regulations are founded on three critical pillars that a Licensee/Company must meet to meet the Economic Substance Regulations/Test in regard to any Relevant Activity.
The economic substance is made up of the following components:
