UAE introduced Economic Substance Regulations (ESR) in 2019. These regulations oblige certain UAE-based business to demonstrate adequate economic presence by meeting the UAE economic substance test. The regulations mandate that the companies need to notify and submit an annual UAE economic substance report to the regulatory authorities. If the companies don’t meet deadlines, they are at risk of penalties. Economic Substance reporting regulations apply to the UAE businesses that carry out the following relevant activities:

• Banking Business
• Insurance Business
• Investment Fund Management Business
• Shipping Business
• Holding Company Business
• Intellectual Property Business (IP)
• Distribution and Service Center Business
• Lease- Finance Business

In Effective Solutions we can help the companies in assessing whether they are subject to the regulations. If the companies are subject to the regulations, then we can assess the operation of the companies across all the emirates (onshore/free zones) to see if the current activities are expected to fulfil the requirements of UAE Economic Substance Reporting.

In Effective solutions we can advise companies with constructive solutions to comply with the regulations. We also assist the business in preparing the notification and the report to be submitted to the concerned Regulatory Authority.