UAE : Economic Substance Regulations

​Gupta Accountants realizes the complex challenges of compliance with UAE Economic Substance Regulations while doing business. Gupta Accountants provides range smart solutions for compliance with UAE Economic Substance Regulations.  

According to Cabinet Decision 98 of 2024, issued by the UAE Ministry of Finance in September 2024, Economic Substance (ES) compliance is no longer required for periods starting after December 31, 2022. This change is due to the implementation of the UAE Corporate and Business Tax.​

Introduction of Economic Substance Regulations in UAE:

• ESR have been introduced in countries with low or no corporate taxes, in order to comply with international initiatives to combat harmful tax practices including unlawful avoidance or evasion. ESR requires certain legal entities to demonstrate that they carry out substantial economic activities in these jurisdictions, in accordance with the Economic Substance Test  The UAE has introduced the Economic Substance Regulations which are applicable to the business establishments based on mainland as well as free zones . The purpose of the Regulations is to ensure that UAE entities undertaking certain activities report actual profits that are commensurate with the economic activity undertaken within the UAE. ​​
• The UAE Economic Substance Regulations came into existence on 30 April 2019. 
• The UAE Economic Substance Regulations primarily apply to legal entities that carry out a ‘Relevant Activity’ which has been identified under the regulation. ​
• The Relevant Activities under the Economic Substance Regulations are:

1.  Banking Businesses , 2.  Insurance Businesses,  3.  Investment Fund Management Businesses,  4.  Lease-Finance Businesses,  5. Headquarters Businesses​   6,  Shipping Businesses,  7.  Holding Company Businesses, 8.Intellectual Property Businesses and 9. ​Distribution and Service Centre Businesses

Economic Substance Test:
The Economic Substance Test  requires a an entity to demonstrate that:

• the entity and the Relevant Activity are being directed and managed in the UAE;
• the relevant Core Income Generating Activities (CIGAs) are being conducted in the UAE; and 
• the entity has adequate employees, premises and expenditure in the UAE.

Stages of Compliance with UAE Economic Substance Regulations:
Stage 1 : Notification 
Stage 2: Annual Substance Return 

Regulatory Authority under UAE Economic Substance Regulations:
Regulatory Authority has been specified under the regulations and it is the Regulatory Authorities that set the requirements, deadlines and format for notification filing as they believe is appropriate and which may vary.  

Gupta Accountants competent team as ESR Consultants in Dubai, provides supports at all the stages of compliance with UAE Economic Substance Regulations ​

Why Gupta Accountants ? 

• Professionally qualified and experienced ESR Consultant and Advisors 
• Cost Effective ESR compliance services 
• Compliance to International standards & applicable rules and regulations. 
• Free Advisory

Gupta Accountants could assist with the ESR Compliance to the companies based in Dubai Airport Free Zone -DAFZA,Dubai Auto Zone, Dubai Cars and Automotive Zone, Dubai Design District, Dubai Flower Centre, Dubai Gold and Diamond Park, Dubai Healthcare City, Dubai Industrial City, Dubai International Academic City, Dubai International Financial Centre -DIFC, Dubai Internet City ,​Dubai Knowledge Park, Dubai Logistics City, Dubai Maritime City Authority, Dubai Media City, Dubai Multi Commodities Centre -DMCC, Dubai Outsource Zone, Dubai Science Park, Dubai Silicon Oasis - DSO, Dubai Studio City, Dubai Production City​ , Dubai Development Authority, ​​​Dubai Techno Park (New name: National Industries Complex)​, Dubai Textile City, Energy and Environment Park, International Humanitarian City , ​Jebel Ali Free Zone Authority JAFZA, Jumeirah Lakes Towers Free Zone, Dubai Production City, Abu Dhabi Airport Business City, Abu Dhabi Global Market -ADGM, Abu Dhabi Ports Company​, ​Higher corporation for specialized economic zones/ ZonesCorp, Industrial City of Abu Dhabi, Masdar City, TwoFour54, ​Hamriya Free Zone Authority, USA Regional Trade Center Free Zone, ​Sharjah Airport Free Zone Authority, Ajman Free Zone Authority, Umm Al Quwain Free Zone Authority, RAK Investment Authority Free Zone, RAK Maritime City​, Ras Al Khaimah Free Trade Zone, Ras Al Khaimah Media Free Zone, RAK Economic Zone - RAKEZ, Creative City Fujairah, Fujairah Free Zone Authority, International Free Zone Authority - IFZA

Gupta Accountants expert team of auditors in UAE, provides Annual Audit Service in UAE and Support at all the stages of the Annual Financial Audit in UAE 

Dubai

Sharjah

Ajman

UAQ

RAK

Fujairah

ABu Dhabi