Economic Substance Regulation

ESR Submission Services

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    ESR Submission Services

    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.

    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.

    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.

    Who Needs to Submit an ESR Report?

    ESR submissions are mandatory for businesses engaged in the following Relevant Activities

    • Banking
    • Insurance
    • Shipping
    • Investment fund management
    • Lease-finance business
    • Headquarters Business
    • Holding Companies
    • Intellectual Property (IP) Businesses
    • Distribution and Service Centers

    Entities conducting these activities must assess whether they have earned income from these relevant activities and, if so, prepare and submit the required reports.

    Key Elements of an ESR Submission

    01
    Core Income-Generating Activities (CIGAs)
    Companies in the UAE must pinpoint and exhibit the primary activities from which they generate income. This covers, but is not limited to, the stages of coming up with a strategic plan, managing operations, and performing the day-to-day business activities necessary for income generation.
    02
    Management and Control
    The significant decision-making process and the main board meetings of companies should be done in the UAE. The proof of having regular board meetings in the UAE, where a minimum number of directors physically attended, is vital in establishing compliance.
    03
    Adequate Economic Presence
    The report must include detailed information on how the business meets the substance requirements, such as:
    • 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.

    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
    The first thing our team does is determine whether your business is subject to the scope of the ESR by reviewing the pertinent activities you are undertaking and confirming whether an ESR notification and report are necessary.
    02
    Preparation of the ESR Report
    Once it is determined that your business has to comply, we give you all the required documents like financial records, employee information, and business expenditure details. Our experts ensure that your report is finished with the correct information and accurately presents your economic presence in the UAE.
    03
    Filing of the ESR Report
    We handle the timely submission of the ESR report through the Ministry of Finance’s portal, ensuring that the submission is compliant with regulatory standards and deadlines.

    Why Choose Vigor Accounting & Taxation for ESR Submission?

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    Expert Knowledge of UAE Regulations

    Our professionals, who are experts in the field of Economic Substance Regulations in the UAE, are here to assist you with all aspects of the ESR submission process. It’s our responsibility to ensure that you are in full compliance with all regulations in order to escape penalties.
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    Accurate and Timely Reporting

    At Vigor Accounting & Taxation, we understand the importance of accuracy and timeliness. We take care of the entire process, from gathering necessary documentation to filing the report, so you can focus on your business operations.
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    Comprehensive Support

    The support we provide doesn’t just stop after submitting the ESR reports, but we instead offer constant assistance to ensure that the business is up to date on any changes or modifications in the ESR regulations thus giving you peace of mind that you are protected from all the hazards uh also from all the changes.

    Transform Your Vision into Reality—Book Your Free Consultation!

    Don’t wait—schedule your free consultation today and take the first step towards transforming your vision into reality!

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