The Economic Substance Regulations require UAE onshore and free zone companies, including offshore companies, branches, partnerships and other UAE business forms that carry out any of the “Relevant Activities” listed below to maintain an adequate “economic presence”in the UAE relative to the activities they undertake:
The UAE Economic Substance Regulations apply not only to UAE entities that are part of a foreign multinational group, or that are owned by a foreign shareholder but on any UAE entity which carries on a Relevant Activity, regardless of whether the UAE entity belongs to a foreign multinational group.
The Economic Substance Regulations apply to a limited liability company, a private shareholding company, a public shareholding company, a joint venture company, a partnership (a limited liability partnership, a limited partnership, a general partnership, etc.), but does not apply to a natural person, sole proprietorship, trust, and foundation.
A Licensee- any commercial company- that is directly or indirectly owned 51% or more by the UAE government is no longer specifically exempt.
Exempted Licensees for the Economic Substance Regulations in UAE are:
UAE company operating in any relevant activities must satisfy all the below economic substance requirements of the Regulations (including but not limited to) demonstrating that:
Non-compliance with the Regulations may lead to administrative fines and sanctions which include: