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ESR Filing

ESR Filing

UAE issued Economic Substance Regulation (ESR) under Ministers Resolution No. 31 on April 30, 2019. On September 11, 2019, the UAE government released Ministerial Decision No. 215 of 2019, which provided instructions for implementing the regulations. It offered information on the Regulatory Authorities in Cabinet Resolution No. 58 of 2019 that is in charge of carrying out Relevant Activities.

ESR is mandatory for all businesses with UAE registrations. It is one of the crucial elements of UAE business legislation. The following are some important ways in which we may help you:

  • First, make sure that your ESR compliance forms are complete and accurate for every year.
  • Additionally, make assessments to see whether you comply with the law.
  • Additionally, we evaluate your readiness to pass the Economic Substance Test.
  • Help with notification filing
  • Ultimately, we assure your compliance with the ESR.

 

It is quite complicated to file an ESR if you have never handled one before or have had problems with it in the past. Notices will be posted on the UAE MoF website with information about the ESR and deadlines. Such companies should seek assistance from well-known and professional ESR filing companies in the UAE. As an expert in ESR filing in UAE, GAAP Associates would be delighted to assist you in assessing your business activities and providing support throughout the ever-changing regulatory landscape in the UAE.

Relevant Activities as per ESR in UAE

Economic Substance Regulations (ESR) apply to all UAE companies on the mainland, at free ports offshore, and therefore in financial-free zones. Businesses in UAE have to comply with Economic Substance Regulations if they generate earnings from any of the following activities:

  • Shipping Businesses
  • Company Businesses
  • Property Businesses
  • Banking Businesses
  • Insurance Businesses
  • Lease-Finance Businesses
  • Headquarter Businesses
  • Distribution and repair Centre Businesses
  • Investment Fund Management Businesses

 

Every year, all licensees and exempted licensees must fill out an ESR notification with the following information

  • Dates of the beginning and end of the fiscal year
  • Whether any revenue was made from the relevant activity during the relevant fiscal year
  • Additional data as required by the regulatory body

ESR Filing

ESR Filing - a step-by-step guide

  • Assessment for eligibility: The company must first confirm that the activities it engages in are included in the list or subset of relevant activities. The company can consult the UAE Ministry of Finance website to confirm in accordance with the most recent standards. Only licensees and licensees who are exempted from licencing requirements must submit notification within six months after the end of the relevant financial activity period.
  • Assessment for Test: The company must ensure they can pass the Economic Substance Test. On the website of the Ministry of Finance, businesses can find the template notification and ESR report before submitting the notification. If the company is unsure what to do, it can look for advice on the MoF website or ask ESR filing businesses for advice.
  • Filing & Reporting: Filing the notification to a UAE relevant authority is the last step in the ESR process. The UAE ESR report must be completed and submitted by companies to the regulator every year. The company should also be prepared with all the essential documents in case proof is needed.

FAQ

Every ESR submission must be made online through the Ministry of Finance's designated ESR portal.

In order to demonstrate that the company complies with economic substance requirements, companies that engage in Relevant Activities must submit an Economic Substance Report (ESR) annually to the Regulatory Authority.         

The ESRs will apply to all UAE entities that engage in one or more of the following Relevant Activities, including those registered in Free Trade Zones or Financial Zones.

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