Services

UAE Economic Substance Report (ESR)

All UAE companies involved in the following activities should possess and maintain an adequate economic presence in the UAE (pass the Economic Substance Test):

Holding companies

Intellectual property (“IP”) businesses

Distribution and service centers

Banking/financial service providers

Insurance businesses

Investment fund management businesses

Leasing/finance businesses

Headquarters

Shipping businesses

The ESR requirements are derived from the OECD and the European Union’s initiatives to fight against the so-called P.O. box companies, businesses that are functioning without office or employees having no substance.

The compliance requirements for the ESR are:

ESR notifications

Entities which operate within the scope of regulations and carry out relevant activities are required to submit annual notifications within 6 months after the end of the financial year.

ESR reporting

within 12 months from the end of the financial year, the company is required to submit an Economic Substance Report. There are, however, some exemptions – for example, if, during the financial year, the business did not earn any income from the activities listed above.

United Arab Emirates’ companies which are not engaged in the activities listed above are not obliged to submit ESRs as the requirements for these companies are different. For the companies which are obliged, failure to submit the ESR might result in significant fines.

Nomad Law’s Economic Substance Report services includes, but are not limited to:

Estimation if the requirements are applicable in particular cases

If applicable, what particular requirements are relevant

Evaluation of the currently present economic substance

Advice and assistance on every step towards securing an adequate level of economic substance

Preparation and submission of the Economic Substance Report.

Feel free to contact us if you would like to discuss your individual case, find out about other aspects of owning a UAE company, such as beneficial ownership requirements, or have any other questions.

Get started

Contact us at [email protected], by calling +971 56 591 0692 (UAE), +370 686 24426 (Lithuania/Europe) or drop us a message via our contact page. We will review your case and come back to you with potential solutions.

We look forward to speaking to you!