Economic Substance Regulation
ESR Submission Services
Since 20179 Since 2017
- goAML registered
- Filed in your name
- To the deadline
Talk to an adviser
Tell us what the business is trying to decide and we will tell you what it would take to answer it.
- Reply in 24h
- FTA approved
- Direct to a specialist
Economic Substance Regulations · turns on what the entity does
Filing it with the regulatory authority, in the form and the window it sets.
Overview
What ESR Submission involves
The Economic Substance Regulation (ESR) in the UAE requires businesses that perform Relevant Activities to file annual ESR reports. This process shows that businesses in the UAE have sufficient economic substance, such as human resources, management, and income-generating activities. At Vigor Accounting & Taxation, our expertise extends to assisting you in making the ESR reports, we guarantee compliance with UAE regulations and prevent penalties.
- Advisory services, one practice
- 18Advisory services, one practice
- years, since 2017
- 9years, since 2017
- Professionals in Business Bay
- 75+Professionals in Business Bay
The basics
What is ESR Submission?
The ESR Submission stands for the compulsory reporting method for the enterprises that are involved in Relevant Activities as defined by the ESR framework in the United Arab Emirates. The sectors that fall into this category are banking, insurance, holding companies, intellectual property businesses, shipping, and others. The companies are required to prove they meet the Core Income-Generating Activities (CIGAs) standards by indicating that there is de facto economic activity in the UAE. This submission is to be made on a yearly basis through the Ministry of Finance (MoF) portal.
Why it matters
Importance of ESR Submission in UAE
Compliance with UAE Law
Businesses in the UAE are legally required to comply with the ESR. This regulation aligns with the UAE’s commitment to global tax transparency standards, such as those set by the Organisation for Economic Co-operation and Development (OECD). Failure to submit the ESR report can lead to penalties ranging from AED 20,000 to AED 400,000, depending on the severity of the violation.
Demonstrating Economic Presence The ESR submission confirms that your company has a major economic presence in the UAE. It also presents that your operations are lawful and are in line with global best practices. The submission gives detailed information on, among other things, the number of employees, operational expenditures, and physical assets, showing that the firm is really active.
Avoidance of Penalties
The submission can be made late or the information can be incorrectly provided, which may lead to very severe results both financially and legally. The companies would have to take the most serious attention to the reports needed to be submitted as well as to be delivered timely. Ensuring compliance with the ESR regulations is another way your business can prevent fines that would otherwise rise every time it fails to comply with the rules.
How it runs
ESR Submission Process
At Vigor Accounting & Taxation, we streamline the ESR submission process for businesses by following these key steps
01
Assessment of Business Activities
02
Preparation of the ESR Report
03
Filing of the ESR Report
04
Why Choose Vigor Accounting & Taxation for ESR Submission?
05
Expert Knowledge of UAE Regulations
06
Accurate and Timely Reporting
07
Comprehensive Support
Phase 1 of 7
Assessment of Business Activities
What is in it
Key Elements of an ESR Submission
Number of full-time employees in the UAE.
Adequate physical premises in the UAE.
Operational expenditures incurred in the UAE related to the relevant activities.
Core Income-Generating Activities (CIGAs)
Management and Control
Adequate Economic Presence
Detail
Who Needs to Submit an ESR Report?
ESR submissions are mandatory for businesses engaged in the following Relevant Activities
Entities conducting these activities must assess whether they have earned income from these relevant activities and, if so, prepare and submit the required reports.
Banking
Insurance
Shipping
Investment fund management
Lease-finance business
Headquarters Business
Holding Companies
Intellectual Property (IP) Businesses
Distribution and Service Centers
Does it reach you
Two regimes, and only one question worth asking first
Every page in this section answers a question further down the chain than the one you actually have. Tick what is true of the business and it says which regime is pointed at you, and which pages matter.
Economic Substance Regulations
Does the entity do any of these?
Nine relevant activities. If none of them is yours, ESR does not reach you.
goAML and anti-money-laundering
Is the business any of these?
Designated businesses and professions report through the goAML portal.
Nothing ticked yet
Tick anything true of your business on either side.
This points you at the right pages. It is not a compliance opinion, and it deliberately states no threshold, deadline or penalty: those are set by the Ministry of Finance and the Financial Intelligence Unit and they change. Whether a regime actually applies to your entity is confirmed by a person who has seen your licence and your activity.
Or go straight to one
Government Agencies
We work closely with all Government Agencies
Company formation, licensing, visas, customs codes and tax registration all pass through these authorities. Start a company setup.
Answers
Questions asked about ESR Submission
The 6 asked most often, answered by an adviser.
01Do I need to file an ESR notification or report for my UAE company?
This depends on whether your company carries on a relevant activity, such as banking, insurance, fund management, lease finance, headquarters, shipping, holding company, intellectual property, or distribution and service centre business. If any relevant activity generates income, an ESR notification and, in most cases, a report must be filed each financial year. The specific activities on your licence determine whether this applies to you.
02How much does ESR submission cost?
ESR submission work is quoted after reviewing your licence activities, income streams, and prior filing history, since the scope varies between a simple notification and a full report with supporting analysis. We can provide a proposal once we understand your structure. Bookkeeping support, if needed alongside this, starts at AED 599 per month for up to 50 transactions.
03What is the deadline for filing ESR reports in the UAE?
ESR notifications and reports are generally due within set periods following the end of the relevant financial year, with the exact dates set by the regulatory authority overseeing your licence. Deadlines can differ by free zone or mainland authority, so it is important to check the specific date issued to your entity rather than assume a single UAE wide date.
04What happens if I file ESR late or not at all?
Failure to file the required ESR notification or report, or providing inaccurate information, can result in administrative penalties imposed by the relevant regulatory authority. Repeated non compliance may lead to further action, including referral to other authorities. The exact penalty amount is set by regulation and depends on the nature of the failure.
05Which businesses need to assess Core Income Generating Activities under ESR?
Any entity carrying on a relevant activity, such as those listed under the Economic Substance Regulations, needs to identify its Core Income Generating Activities and demonstrate that these are performed in the UAE with adequate employees, expenditure, and physical presence. Whether this applies to your business turns on the activities stated on your trade licence and the income they generate.
06What documents or information do you need from us for ESR submission?
We typically need your trade licence, financial statements, details of income by activity, information on management and board meetings held in the UAE, and evidence of physical presence such as office space and staffing. Vigor Accounting and Taxation reviews these to assess your relevant activities before preparing and filing the notification or report.
Not here? Ask Vigor, and a specialist picks it up from there.
