Economic Substance Regulations UAE | What Next?

July 7, 2020by Chinwe Azikiwe

ECONOMIC SUBSTANCE REGULATIONS UAE : YOUR UAE COMPANY HAS FILED THE ESR NOTIFICATION, NOW WHAT NEXT?

The Economic Substance Regulations (ESR) Notification was the first step to providing a self-assessment and self-reporting to the Regulatory Authorities. The deadline for UAE Licensees to file the ESR Notification is now passed and companies that have established that they fall within the scope of the ESR (i.e conducting one or more Relevant Activities), must prepare and file the ESR Return to their Regulatory Authority as a consequential action, in order to fully comply with the ESR.

All Licensees falling within scope of ESR must submit the ESR Return to confirm that they are compliant with the ESR requirements, that is:

    1. the licensee is directed and managed in the UAE;
    2. the licensee’s Core Income Generating Activities (CIGAs) are being conducted in the UAE;
    3. the licensee has adequate number of qualified full-time employees physically present in the UAE, adequate premises in the UAE and adequate operating expenditure incurred by it in the UAE.

WHAT HAPPENS TO THE COMPANIES THAT MISSED THE NOTIFICATION DEADLINE?

For companies that missed the notification deadline, or have provided incorrect or misleading information in the ESR notification form; they will now be subject to penalties spanning from AED 10,000 to AED 50,000 as per the UAE Law, unless at the sole discretion of the Authorities. At this time, no extensions to the deadline have been applied by any regulatory authority and no penalty waivers have been issued.

If you missed the ESR Notification deadline or incorrectly completed your notification form, contact our Corporate Team immediately for assistance.

HOW CAN WE ASSIST YOU?

Wincore Advisory Group can assist you in this regulatory assessment to fulfill your compliance with legal responsibilities by:

    1. getting a clear view of your entity’s categorization;
    2. reviewing internal corporate governance, Management information system and ESR criteria fulfillment;
    3. implementing the most cost & time effective compliant (implementing contractual and delegation arrangements) strategy to help you pass the economic substance test;
    4. providing you with Corporate Secretarial services and Non-Executive Directors services to fulfill your needs in light of the Economic Substance Regulations.

Outsourcing this function to Wincore Advisory Group enables you to meet your obligations in the most efficient way and avoid wasting valuable time and energy in establishing an in-house process.

We strongly recommend that all Licensees found to be conducting any of the Relevant Activities, should begin remediation without further delay, to ensure that non-compliant elements are made compliant with the UAE Economic Substance Regulations before the deadline.

The experts at Wincore Advisory Group are here to assist you to prepare & submit the ESR notification, and also assist you in a potential ESR test & report.

Contact Us Today On +971 4221 2602.

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Chinwe Azikiwe

Senior Business Advisor | E: c.azikiwe@wincoreadvisory.com | M: +971 (0) 50 630 0821

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