Simplify Your ESR Filing with Finanshels.

Become a Member
Your Name
Email Address
Company Name
Phone Number
Valid number
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Your subscription could not be saved. Please try again.
Successfully Submitted
The SMS field must contain between 6 and 19 digits and include the country code without using +/0 (e.g. 1xxxxxxxxxx for the United States)
Bookkeeping Services in Uae

ESR filing in the UAE

The new Economic Substance Regulations (ESR) in the UAE have been introduced to prevent non-domiciled directors from using UAE-based companies to evade taxes in their home countries. These regulations are crucial for the UAE to avoid being labelled as 'non-cooperative' by the EU, and they contribute to creating a fairer business environment. 

Regardless of how you establish your business, it's essential to understand the UAE's economic substance regulations. Essentially, your company must be managed or directed from within the UAE, employ a sufficient number of full-time staff in the UAE, generate the majority of its income in the UAE, maintain adequate assets in the UAE, and demonstrate operating expenditure in the country.
These rules have been in effect since 2019, and we will break down their implications for you in this article. Specifically, we will cover topics such as the definition of ESR UAE, the necessity of managing your business within the UAE, employing full-time staff in the UAE, ensuring your primary income is generated in the UAE, owning assets and spending on local business services, government announcements, and your options within free zones. ESR filing in the UAE, in simple terms, sets standards requiring companies in the UAE to conduct a significant portion of their business activities within the country where they are registered. The main purpose of ESR is to deter companies from registering solely for tax and economic benefits. Given the favourable tax conditions in places like Dubai, it makes sense to implement stricter requirements to ensure sustainable income generation.
ESR primarily applies to industries such as shipping, fund management, insurance, banking, lease financing, distribution and service centres, holding companies, company headquarters, and intellectual property businesses. This list is not exhaustive, so conducting research and seeking expert advice is essential to ensure compliance. Non-compliance can result in fines of up to AED 300,000, making it imperative to seek the best guidance in this regard. 

Frequently Asked Questions

1. What information is typically required for ESR reporting?
Ans. For ESR reporting in the UAE, you typically need to provide details about your revenue, expenses, core income-generating activities, employees, premises, assets, outsourced activities, and ownership/control of your business entity. Specific requirements may vary, so consult official guidelines or seek professional advice for the latest information.

2. What are the consequences of non-compliance with ESR regulations?
Ans. Non-compliance with UAE ESR regulations can result in penalties, fines, and the loss of tax benefits. Exact consequences may vary, so consult official guidelines or experts for details.

3. Are there any reporting deadlines for ESR filings?
Ans. Yes, there are reporting deadlines for ESR (Economic Substance Regulations) filings in the UAE. These deadlines can vary and depend on the specific regulations and guidelines in place. To ensure timely compliance, it's crucial to check the official regulations and guidelines for the most up-to-date information on reporting deadlines or consult with relevant authorities.

4.  What is minimum income fixed to apply for Economic Substance Regulations?
Ans. The minimum income threshold required to apply for Economic Substance Regulations (ESR) in the UAE can vary. It is advisable to review the current ESR regulations and guidelines specific to your business and consult with relevant authorities or professionals for the precise minimum income threshold applicable to your situation..

5.   Is it necessary to file Economic Substance Notification and Economic Substance Report every year? 
Ans. Yes, in the UAE, it is necessary to file both the Economic Substance Notification and Economic Substance Report as required by the Economic Substance Regulations (ESR). Compliance with these regulations is essential for businesses operating in the UAE.

Why Businesses Love Finanshels

Bookkeeping Services in Uae
Effortless Bookkeeping
Manage your finances with ease. Track and report all income, expenses, assets and liabilities with a few clicks.
Bookkeeping Services in Uae
Tailored Tax Solutions
Enjoy complete peace of mind by having our team of experts prepare your tax returns according to the law.
Bookkeeping Services in Uae
Streamlined Payroll
Streamline payroll processing and manage expenses quickly and hassle-free.
Bookkeeping Services in Uae
Expert Support
Get dedicated accounting support from professionals whenever you need it.

What our Members Saying

Jeremy Khatar
"None of the accounting software was working for us as our business model is complex. Finanshels designed an accounting system tailor made to our needs and completely automated our finance operations just like they promised. They have been super helpful for us to scale."
Jeremy Khatar
CEO, Ronin Global LLC, USA
Bader Al Kazemi
"If you ever do any financial modeling/forecasting, I seriously can't recommend Finanshels enough. they are a dependable team of professionals who work hard to deliver results."
Bader Al Kazemi
Founder, Optimize App
Meet Patel
"We are extremely satisfied to have with us as they thoroughly understood our business processes and streamlined our accounting processes faster than expected. Both in-house and outsourced accountants failed multiple times to streamline and structure our complex financial operations as we deal with a large audience and extensive activities. We highly recommend to everyone instead of hiring in-house accountants."
Meet Patel
COO, Bawes Co.

Revolutionize your finances with Finanshels

Register Now
Join our newsletter
From the best Financial Accounting Services provider in UAE
We care about your data in our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.