UAE Economic Substance Regulation Update: I missed the ESR deadline – Now what?
All entities with financial year-end 31st December 2020 and falling within the scope of ESR should have submitted an ESR Notification with the Ministry of Finance (“MoF”) by 30th June 2021.
Should your entity have failed to submit the ESR Notification, it is paramount that this step is remediated as soon as possible so as to mitigate the risk of penalties for late (or lack of) submission of the ESR Notification amounting AED 20,000.
Entities with financial year-end 31st December 2020 and falling within the scope of ESR must also submit a Substance Report by 31st December 2021 to confirm that they comply with the ESR requirements, to wit: (i) the entity is being managed and directed in the UAE; (ii) has adequate number of employees, expenditure, physical assets in the UAE; (iii) the core income-generating activity (CIGA) is being carried out in the UAE.
We strongly recommend all entities falling within the scope of ESR to review their governance arrangement and put in place all necessary measures to comply with the ESR requirements from now on. Non-compliant practices should be remediated without further delay.
For further information on how Re/think can assist your entity to comply with ESR requirements, please see below our previous publications:
UAE ESR Update: Guidance Released
NEDs in the context of Economic Substance Regulations