Economic Substance Regulation (ESR) imposes a requirement for UAE entities (including offshore companies and branches of local and foreign companies) that carry out and earn income from any of the Relevant Activities to maintain economic substance in the UAE specific to each Relevant Activity. Annual filing requirements must be met or organizations risk penalties for non-compliance.

The scope of Economic Substance Regulation highlights two annual filing obligations for the licensees.

• ESR report is applicable to businesses that perform Relevant Activities, earn income from these activities, and do not qualify for any exemption under ESR.
• ESR notification must be filed if the business is undertaking a Relevant Activity. It is applicable even where the business claims exemption from ESR or does not earn any income from the Relevant Activity.

Below is the summary of the upcoming deadlines for reference:

UAE entities that conduct any one or more of the Relevant Activities must file a notification within six months of the end of the financial year (FY) on the Ministry of Finance’s (MoF) online ESR portal.