The Economic Substance Regulations (ESR) apply to companies and other business entities registered in the UAE, including in the Free Zones, that carry out any of the following Relevant Activities during the financial year:
- Banking Businesses
- Insurance Businesses
- Investment Fund Management Businesses
- Lease-Finance Businesses
- Headquarters Businesses
- Shipping Businesses
- Holding Company Businesses
- Intellectual Property Businesses
- Distribution and Service Centre Businesses (Purchasing from Foreign connected persons/ Providing services to Foreign connected persons)
The Company need to check if it carries out one or more of the relevant activities during the financial year, if yes the Company needs to do the following ESR Compliance:
- ESR Notification within 6 months from the end of the financial year
- Conduct an ESR test and submit the report to the concerned authority within 12months from the end of the financial year
Following are the due dates for the Company having financial year as below:
| Financial Year ending on | Notification Due Date | Return Due Date |
|---|---|---|
| 31st Dec2020 | 30th Jun 2021 | 31st Dec 2021 |
| 30th Jun 2021 | 31st Dec 2021 | 30th Jun 2022 |
Please note penalties for non-compliance would attract:
| Non-compliance | Amended Penalty Amount AED |
|---|---|
| Failure to submit a Notification: | 20,000 |
| Failure to submit an Economic Substance Report | 50,000 |
| Providing inaccurate information | 50,000 |
| Failure to pass ES Test for first year | 50,000 |
| Failure to pass ES Test for the consecutive year | 400,000 |
How can MCA Help?
We are happy to assist you with our expertise on the ESR Compliance by carrying out the High level assessment and support in filing the ESR Notification and ESR Report within the due date. We assure to provide best of our all time services
Contact Details
Email: mcatax@mcagulf.com
Telephone (Dubai UAE): +971 4 3319501
Working Hours: 9AM – 6PM, Sunday to Thursday
