Most companies in the UAE were required to file their ESR (Economic Substance Regulations) notification before June 30. Those who failed to do so are liable for fines of between Dh10,000 to Dh50,000. Providing false information can also result in fines, as well as the potential suspension or cancellation of business activities.
In the run up to the deadline, much of the focus was on understanding whether a business conducted any of the relevant activities and filing the notification on time.
But, for those companies who do fall in scope and conduct a relevant activity in the UAE – ranging from local SMEs to multinationals – the initial notification is just the beginning. Now they must create an action plan so that they can demonstrate an adequate economic presence in their annual returns, which is due by the end of the year (within 12 months of their relevant financial period).