UAE Economic Substance Regulations Next Filing – June 30 2021
The Economic Substance Regulations (ESR) is an annual compliance requirement in the UAE. For the financial year ended on 31 December 2020, UAE businesses are required to file their ES Notifications no later than June 30 2021.
Background
The Economic Substance Regulations (ESR) was first introduced in the UAE in April 2019 through Cabinet Resolution No. 31 and was recently amended by Cabinet Decision No. 57, along with the updated guidance (Ministerial Decision No. 100 of 2020) in September 2020. The Amended ESR applies retrospectively from 1 January 2019. The ESR requires UAE onshore and free zone companies that carry out “Relevant Activities” to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake i.e. ESR Test. It is strongly recommended that UAE businesses periodically assess their business activities to report any change in Relevant Activities, and determine whether the business would be within the scope or exempted from Economic Substance Regulations (ESR) Reporting for the relevant reporting year.
As a consequence of this annual mandate, for the UAE Economic Substance Regulations these actions must be applied:
- Assessment to determine the applicability of the UAE ESR to your UAE company;
- Submission of the notification report must be filed with MOF (Ministry of Finance);
- Prepare and file the ESR Report by December 31st, 2021 as a consequential action.
For non-compliance, administrative penalties of up to AED400, 000 and/or suspension or non-renewal of trade licenses may apply.
For support and assistance on this matter contact our corporate team today.
All UAE Licensees must conduct an assessment to determine whether their companies are subject to the UAE ESR, and as a consequential action submit a notification and file the ESR Report.
How can we assist you?
Wincore Advisory Group can assist you in this regulatory self-assessment to fulfill your compliance legal responsibilities by:
- Assistance with the assessment of your entity in accordance with the new UAE ESR;
- Assistance with filing UAE ESR notification / annual notification / reporting;
- To get a clear view of the new regulations and your entity’s categorisation;
- Reviewing internal corporate governance, Management information system and ESR criteria fulfillment;
- Implementing the most cost & time effective compliant (implementing contractual and delegation arrangements) strategy to help you pass the economic substance test;
- Provision of professional directorships, board support services, company secretarial/administrative services and registered office/meeting space.
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.
Be reminded that administrative penalties of up to AED400, 000 apply, so do not wait until it is too late. Contact our corporate team today for assistance at the earliest.
