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Action required: Economic substance notification deadlines imminent

  • Market Insight 8 juin 2020 8 juin 2020
  • Droit des sociétés

The Economic Substance Regulations (ESR) are now in force in the UAE. Under the ESR, all companies in the UAE will be required to assess whether they carry on a Relevant Activity and if they do, whether they have sufficient economic substance in the UAE.

Action required: Economic substance notification deadlines imminent

Relevant Activities include:

  1. Banking;
  2. Insurance;
  3. Investment fund management;
  4. Finance leasing;
  5. Headquarter operations;
  6. Shipping;
  7. Intellectual property;
  8. Distribution and service centres; and
  9. Holding company operations (defined as a company with its main business being to own shares, securities or interest in other company and which does not conduct any other commercial business or derive income from other sources).

Filing Deadlines

In many cases, companies must file notifications with regulators (irrespective of whether they carry on a Relevant Activity). A number of filing deadlines have been announced, including (amongst others):

Dubai Airport Free Zone 31 May
Dubai International Financial Centre 12 June
Companies registered 'onshore' in an Emirate of the UAE (licensed by the competent authority in that Emirate, such as the Government of Abu Dhabi Department of Economic Development in Abu Dhabi, or the Government of Dubai Department of Economic Development in Dubai) 30 June
Ajman Free Zone 30 June
Abu Dhabi Global Market 30 June
Dubai Multi Commodities Centre 30 June
Hamriyah Free Zone Authority  30 June
Ras Al Khaimah International Corporate Centre 30 June
Sharjah Airport International Free Zone  30 June
Other regulatory authorities While we are awaiting official announcements from a number of regulatory authorities, we suggest working with a 30 June deadline in min

 

 

 

 

 

 

 

 

 

 

 

 

Potential Fines

Annual fines ranging from AED 10,000 to AED 300,000 may be imposed on companies which breach the ESR. A breach could also trigger other penalties and tax authority disclosures. 

Action

Clyde & Co can advise on the new ESR and your obligations under them. We can produce a largely automated advice on some of your obligations under the ESR for a low cost fixed fee (AED 2,500 excluding VAT), following you completing an online questionnaire, or provide more detailed bespoke advice.

If you would like more information, please contact your usual Clyde & Co contact, or email EconomicSubstance@Clydeco.com.

Fin

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