Further to the introduction of the Economic Substance Regulations (ESR) in the United Arab Emirates (UAE), there are several deadlines approaching. ESR applies to all companies and entities based in the UAE, which includes mainland and free zones as well as local branches and branches of a foreign company. It is a mandatory requirement for all entities to submit the Economic Substance Notification irrespective of whether they conduct a “Relevant Activity” or not.
The UAE government has appointed the responsibility to regulate and administer the ESR to mainland and free zone licensing authorities known as the (Regulators). All Regulators are to set to issue the protocols and guidelines for each licensee entity to comply with ESR. Should a licensee entity or company carry out a “Relevant Activity” it is required to notify and submit the mandatory report to the relevant Regulator. Most Regulators have been instructed by the Ministry of Finance to set the deadline and request its licensee entity to formally lodge the notification by 30 June 2020.
Certain Regulators have set out the procedure and deadline for lodging the notification much earlier than 30 June 2020 e.g. Dubai Airport Free Zone Authority’s deadline is 31 May 2020. Furthermore, not all licensing authorities has released the notification deadline and processes e.g. Jebel Ali Free Zone Authority (JAFZA) and International Free Zone Authority (IFZA) and other Regulators are yet to release the formal submission process and format.
There are several updates issued by the Regulators and below is an outline of the deadline, format, and process.
|REGULATOR AUTHORITY||NOTIFICATION DEADLINE||SUBMISSION|
|Dubai Silicon Oasis (DSO)||25 May 2020||Submit via email|
|Dubai Airport Free Zone (DAFZA)||31 May 2020||Submit via portal|
|Fujairah Free Zone Authority||31 May 2020||Submit via email|
|Dubai World Central (DWC)||7 June 2020||Submit via email|
|Dubai International Financial Centre (DIFC)||12 June 2020||Submit via portal|
|Dubai World Trade Centre (DWTC)||30 June 2020||Submit via email|
|Dubai Multi Commodities Centre (DMCC)||30 June 2020||Submit via portal|
|Abu Dhabi Global Markets (ADGM)||30 June 2020||Submit via email|
|Ajman Free Zone (AFZ)||30 June 2020||Submit via email|
|Ras Al Khaimah Economic Zone (RAKEZ)||30 June 2020||Submit via portal|
|Ras Al Khaimah International Corporate Centre (RAKICC )||30 June 2020||Submit via portal|
|Sharjah International Airport Free Zone||30 June 2020||Submit via email|
|International Free Zone Authority (IFZA)||TBA||TBA|
|Dubai Development Authority||TBA||TBA|
|Jebel Ali Free Zone Authority (JAFZA)||TBA||TBA|
The Ministry of Finance has requested at a minimum that the following information be included for the notification:
If an entity does not complete and file, the notification before the deadline or if an entity files an incorrect notification it will be subject to penalties varying anywhere from AED 10,000 all the way up to AED 50,000.
We have included the following important links issued by the Ministry of Finance regarding ESR:
During this time there are many changes occurring. Many Regulators are yet to announce their notification date and submission process. We remain in contact with the relevant authorities and will update you as and when the situation changes. We are committed to assisting you every step of the way. For further information on Economic Substance Reporting, or if you need assistance from our team to complete the notification filing, please feel free to contact your usual Creation Business Consultants team member or email [email protected] or call +971 4 878 6240.
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