Who is subject to the ESR?

Companies subject to the Economic Substance Regulations in United Arab Emirates : 

All UAE onshore, offshore and free zone companies, except those entities in which a minimum 51 per cent direct or indirect investment is from government authorities or government bodies, that carry on and generate income from one of the relevant activities as follows: 

Banking Businesses:

• ​Raising funds, managing risk including credit, currency and interest risk.
• Taking hedging positions.
• Providing loans, credit or other financial services to customers.
• Managing capital and preparing reports to investors or any government authority with functions relating to the supervision or regulation of such business.

Insurance Businesses: 

• Predicting and calculating risk.
• Insuring or re-insuring against risk and providing Insurance Business services to clients.
• Underwriting insurance and reinsurance.

Investment Fund Management Businesses:

• Taking decisions on the holding and selling of investments.
• Calculating risk and reserves.
• Taking decisions on currency or interest fluctuations and hedging positions.
• Preparing reports to investors or any government authority with functions relating to the supervision or regulation of such business.

Lease-Finance Businesses:

• Agreeing funding terms.
• Identifying and acquiring assets to be leased (in the case of leasing).
• Setting the terms and duration of any financing or leasing.
• Monitoring and revising any agreements.
• Managing any risks.

Headquarters Businesses:

• Taking relevant management decisions.
• Incurring operating expenditures on behalf of group entities.
• Coordinating group activities.

Shipping Businesses:

• Managing crew (including hiring, paying and overseeing crew members).
• Overhauling and maintaining ships.
• Overseeing and tracking shipping.
• Determining what goods to order and when to deliver them, organising and overseeing voyages.

Holding Company Businesses :

• ​​Activities related to a Holding Company Business.

Intellectual Property Businesses​:​

• Taking the strategic decisions and managing (as well as bearing) the principal risks relating to acquisition by third parties and subsequent exploitation and protection of the intangible asset.
• Carrying on the ancillary trading activities through which the intangible assets are exploited leading to the generation of income from third parties.
• Taking strategic decisions and managing (as well as bearing) the principal risks related to development and subsequent exploitation of the intangible asset generating income.

​Distribution and Service Centre Businesses:

• Transporting and storing component parts, materials or goods ready for sale.
• Managing inventories.
• Taking orders.
• Providing consulting or other administrative services

What is Economic Substance Regulations? 

What Compliance is required under the UAE Economic Substance Regulations?

Business Activities, subject to notification - substance test and annual substance return compliance  under the UAE  Economic Substance Regulation 

Economic Substance Regulations in United Arab Emirates

Concerned Regulatory Authorities under ESR - Economic Substance Regulation in UAE

Who is subject to the ESR?

For more information on how Gupta Accountants could assist you in compliance with UAE  Economic Substance Regulation Rules, ​contact us today. ​
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Gupta Accountants competent team of chartered accountants in Dubai, provides best supports at all the stages of the compliance to Economic Substance Regulations in UAE to companies registered under free zones and on main land, established in the emirates of  Dubai, Abu Dhabi Sharjah, Umm Al Quwain, Ajman, Ras Al Khaimah and Fujairah. 
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