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AML Compliance Services in Dubai, UAE

Economic Substance Regulations Filing Services

Looking for a professional ESR filing company in Dubai to assist with ESR notification and ESR reporting? TAR CSP, with its pool of ESR experts, helps you with benchmarking and planning to ensure your business’s economic substance.

  • 10+ Years Of Experience
  • 1500+ Audits Completed
  • Financial Experts
  • 2500+ Consultation
Book a 30 minutes Free Consultation

10+ Years Of Experience

1500+ Audit Completed

Financial Experts

2500+ Consultation

Government Agencies We Collaborate With

ESR Filing in UAE

New economic substance regulations for UAE companies were enforced by Cabinet of Minister Resolution No. (31) in April 2019. ESR was introduced as a guideline to improve the tax framework and to make companies accountable in terms of maintaining their economic presence in the UAE.
Complying with ESR requirements can be challenging for certain businesses, especially ones without in-house teams and required knowledge. Non-compliance with ESR may result in penalties, such as suspension of your UAE license or a fine of AED 20,000 to AED 400,000.
At TAR CSP, we provide ESR compliance services to help you avoid such penalties and maintain your reputation.
Economic Substance Regulations UAE

ESR Filing in UAE

The reason for introducing economic substance regulations in Dubai was to ensure that businesses, especially multinational organizations, are not shifting profits to the UAE in order to save tax without conducting substantial activities here. These corporations only register a business in Dubai to take advantage of tax laws without contributing anything to the country’s economic growth.
Here are some of the primary reasons why electronic substance regulations are required in the UAE:

Comply with Global Anti-Money Laundering Regulations

ESR helps Dubai counter money laundering by aligning itself with global efforts. ESR in Dubai enables transparency and accountability to eliminate such illegal activities.

Curtail Harmful Tax
Practices

Electronic substance regulations eliminate practices that companies have used in the past to artificially reduce their tax liabilities. Now, all eligible Onshore Free Zone companies must demonstrate economic presence in Dubai, promoting fair tax competition.

Eliminate shell on-paper companies

ESR in UAE eliminates the incorporation of shell companies where no economic activities take place. If you fail the ESR assessment, there will be penalties, and your license may get revoked.

Supervise Relevant Activities

ESR also enables supervision and regulation of activities that have an impact on the UAE’s economy and international obligations. Companies registered/formed in the UAE (including free zones) that carry out the specific activities must do ESR report submission in UAE.

Relevant Activities List

  • 1. Insurance & Banking Business
  • 2. Lease Finance Business
  • 3. Shipping Business
  • 4. Distribution and Services
  • 5. Investment Fund Management Business
  • 6. Holding Company
  • 7. Company Headquarter
  • 8. Intellectual Property Rights

Step by Step guide to ESR return submission in UAE

Businesses subjected to ESR must fill and submit their ESR notification form each year to the respective regulatory authority. Businesses are also required to finish and submit their ESR reports to the same authority within a year after their financial year ends. If a business hasn’t made money from Relevant Activities or qualifies for exemptions, it doesn’t have to do the Economic Substance Test or file a report. But they still must send a notification form.

If you don’t follow these rules, you could face:

  • 1. ESR penalties
  • 2. Sharing information with foreign authorities
  • 3. Other punishments like your trade license getting suspended or canceled

ESR Penalties in UAE

The penalties for failing to submit the ESR notification & report within the government’s deadline are quite steep. They are as follows
  • If you do not submit ESR Notification collectively with the necessary documents within the deadline, you will be issued a penalty of AED 20,000.
  • If you do not submit an Economic Substance Report within the period mentioned above, you will be issued a penalty of AED 50,000.
Book a 30 minutes Free Consultation

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