ECONOMIC SUBSTANCE REGULATIONS
Achieve complete adherence to the UAE's ESR framework with Finjuris Global’s comprehensive legal and regulatory assistance.
+971 561 365 987
The Economic Substance Regulations (ESR) of the UAE require a UAE Company, including those companies within a Free Zone, to show that sufficient economic presence has taken place in the UAE based on the stated activities of the UAE Company, especially if they are "relevant activities". These regulations were introduced in 2019 to ensure that companies report profits relative to the economic activity occurring within the UAE.
The UAE Economic Substance Regulations (ESR) were implemented in line with international tax transparency efforts led by the OECD and the EU. Every business within the UAE, earning money through Relevant Activities, must show a real economic presence where it does those activities, and provide regulatory filings to the Ministry of Finance (MoF).
At Finjuris Global, we provide a strategic legal and operational ESR package for companies both onshore and in Free Zones.
Coverage by various media houses across globe
We have been featured for our work on various global news & media platforms
ESR REGISTRATION SERVICES
Who Must Register?
All UAE licensees (being either onshore, free zone or offshore entities), that undertake any of the following Relevant Activities must submit an ESR application:
Banking
Business
Insurance
Business
Investment Fund Management
Lease-Finance
Business
Headquarters
Business
Shipping
Business
Holding Company
Business
Intellectual Property Business
Distribution & Service Centre Business
If you are applicable for an exemption, you will still need to submit your ESR Notification every year.
WHAT WE INCLUDE IN
OUR REGISTRATION SUPPORT
Activity Assessment
We look at your operations, to determine whether this existing entity is subject to ESR.
MoF Portal registration
We provide complete end-to-end MoF registration support through the ESR Portal.
Drafting ESR Notification
We prepare and file ESR notifications on an annual basis, with activities classified accurately.
Exemption Confirmation
If you are eligible, we will complete exemption filings, including any supporting documentation.
ESR COMPLIANCE & REPORTING SERVICES
In order to be compliant with ESR, entities must show adequate substance in the UAE and must submit an annual ESR Report.
Conducts Core Income-Generating Activities (CIGAs) in the UAE
Has adequate employees, adequate premises, adequate expenditure in the UAE
Is directed and managed from the UAE
Our Compliance Services Include
CIGA Analysis
We will verify that your business in the UAE meets CIGA thresholds.
Corporate Resolution Preparation
We draft and prepare documentation for local management including the agenda, minutes, and registration of meetings.
Substance Documentation
We provide evidence that the business has adequate premises, adequate employees that reside in the UAE, and monitor some expense tracking.
Annual ESR Return Submission
We submit the ESR Report to the MoF in a timely manner using the ESR Portal.
Exemption & Defense Memo Support
We draft legal submissions to support or claim exemptions, or to defend against any penalties for non-compliance.
Penalty Mitigation
Advice for the entity in the event of MoF audits, investigations, or notices of non-compliance.
Reporting Deadlines
ESR Notification
Six months from your financial year end.
ESR Report
Twelve months from your financial year end.
Failure to file reports can result in penalties from AED 20,000 to AED 400,000.
Why Finjuris Global?
Institutional Knowledge
Our expertise includes ESR, FATF framework, UAE Company Law, and international tax.
Compliance Planning
ESR planning specific to your business structure.
Documentation to Verify Minimum Standards of Documentation
We prepare your firm for potential scrutiny from the MoF.
Across Jurisdiction Experience
Trusted by banks, audit firms, and law firms throughout the DIFC, ADGM, RAKEZ, DMCC, SPC Free Zone, and all of the mainland UAE.
Deadline-Driven
We make sure you never miss a compliance window. We take care of tracking it for you.
Our Process
Eligibility track
Legal Entity Classification & Risk Assessment
Notifications Filing
Substance Assessment and Gap Fill
ESR report preparation and filings
Ongoing compliance monitoring and documentation
Frequently Asked Questions (FAQs)
1. Why does ESR exist in the UAE?
2. What happens if I miss deadlines for ESR?
There are penalties:
- AED 20,000 failure to submit Notification
- AED 50,000 failure to submit ESR Return
- AED 400,000 (and potential suspension of your UAE license) for repeated contraventions
3. Does every company in UAE need to comply with ESR?
4. What is an “Exempt Licensee”?
You may be an Exempt Licensee if:
- you are tax resident outside of UAE
- you are wholly-owned by UAE residents and you do not belong to a multinational group
- you are a branch of a foreign company with tax reporting abroad
- We help clients compile evidence in support of their exemption applications.
5. How does MoF assess substance?
The Ministry of Finance looks for:
- CIGA performed locally
- Office lease and local staff
- Active management from within UAE (board meetings, perform local management tasks,
- perform strategic decisions)
- Documented operational expenses
Let's figure out how we can help you stay compliant!
Stay compliant. Stay confident. Trust Finjuris Global for strategic ESR solutions.
Contact us
Complete the form below and we will contact you to discuss your project. Your information will be kept confidential.