Economic Substance Regulation

The Economic Substance Regulations (ESR) in UAE require businesses to demonstrate their economic activity and ensure it aligns with their presence in the country. Our financial services can assist you in meeting these regulatory requirements.

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Let MS empower your business in ADGM

Mohammad Shafeek

Founder & Group CEO, MS

Let MS empower your business in ADGM

Overview

Economic Substance Regulations (ESR) were introduced globally to address tax avoidance and evasion. As an OECD member, the UAE aligns its legal framework with global standards, subject to OECD review. The economic substance framework, founded to regulate tax liabilities in the UAE, applies to all companies licensed in the country to control tax evasion. This regulation helps to mitigate the advantages derived from low-tax systems, applying to businesses registered both onshore and offshore. ESR regulations apply to all licensees in the UAE, including those on the mainland, in free zones, and offshore, as well as individuals, engaged in activities categorized as "Relevant Activities" (RA). These activities encompass banking, investment fund management, insurance, shipping, distribution and service center operations, lease financing, headquarters operations, holding company activities, and intellectual property management.

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Are you in a hurry? reach us on +97123093344 or
[email protected]

Why MS
for ESR Services in ADGM?

Economic Substance Regulation (ESR) Services with MS in ADGM will help you align your business with global standards. The compliance with ESR is a crucial aspect of doing business in ADGM, and failure to comply can result in significant consequences. We can help you make the process easy and intact. Our services will guide you to success and will ensure they remain as an asset to your business in the ever-changing ADGM market.

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Frequently Asked Questions (FAQ)

What is Economic Substance Regulation (ESR) and how does it apply to ADGM companies?

Economic Substance Regulation (ESR) is a set of regulations requiring certain entities to demonstrate that they have substantial activities conducted within the jurisdiction. ADGM companies engaged in relevant activities must comply with these regulations to ensure economic substance in the region.

Which companies in ADGM are subject to ESR requirements?

Companies engaged in specific activities such as banking, insurance, fund management, lease and finance, shipping, intellectual property, and holding company business are subject to ESR requirements in ADGM.

What are the key obligations under the ESR framework for ADGM companies?

ADGM companies must meet specific substance requirements, including conducting core income-generating activities within the jurisdiction, having an adequate number of qualified employees, and maintaining appropriate premises and expenditures.

How can our ESR services assist ADGM companies in compliance?

Our ESR services provide comprehensive support for ADGM companies to ensure compliance with economic substance regulations. This includes conducting assessments, implementing necessary changes, and assisting in reporting to regulatory authorities.

Can your firm assist with ESR compliance for companies outside ADGM but with operations in the jurisdiction?

Yes, our ESR services extend to companies outside ADGM but with operations within the jurisdiction. We provide tailored solutions to meet the specific needs of such companies and ensure compliance with economic substance regulations.

How can companies determine if they fall under the scope of ESR regulations in ADGM?

Our experts can conduct a detailed assessment of your company's activities to determine whether it falls under the scope of ESR regulations in ADGM. This assessment considers the nature of business activities and income generated.

What are the potential penalties for non-compliance with ESR regulations in ADGM?

Non-compliance with ESR regulations in ADGM can lead to penalties, including financial penalties, suspension of licenses, and potential striking off the register of companies. It is essential for companies to take proactive measures to avoid such consequences.

How frequently should companies review their economic substance position in ADGM?

Companies should regularly review their economic substance position, especially when there are significant changes in their business activities or structures. Annual reviews are recommended to ensure continuous compliance with ESR regulations in ADGM.

What is the deadline for submitting the Economic Substance Regulation report in ADGM?

The deadline for submitting the ESR Notification is typically within 6 months and ESR report in ADGM is within 12 months from the end of the relevant financial year. It is crucial to ensure timely preparation and submission to avoid penalties.

How can companies get started with your ESR services for ADGM compliance?

Getting started is simple. Contact our team to schedule a consultation, and we will guide you through the process, assess your specific needs, and develop a customized plan to ensure seamless compliance with ADGM's Economic Substance Regulation.

Reach out to us for all your queries.
Assuring you a best solution from the most energetic team at MS.

Get the Right Guidance.

Speak to our expert who can assist you with the processes of ADGM Setup and Compliance in the UAE.

Reach out to us for all your queries.
Assuring you a best solution from the most energetic team at MS.

Get the Right Guidance.

Speak to our expert who can assist you with the processes of ADGM Setup and Compliance in the UAE.

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