Economic Substance Regulations – Update and year-end deadlines
08 December 2020
The Economic Substance Regulations (ESR) came into effect in April 2019. The regulations included deadlines for businesses to make certain notifications and year-end reports.
In accordance with the regulations, many businesses made notifications earlier this year. However, the regulations were updated on 19 August 2020, and the update made some changes to the scope of the ESR, and the deadlines were revised.
The changes included:
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New exemptions
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Changes to the requirements for foreign companies with UAE branches
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Revised definitions for Connected persons and Groups
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Technical changes to the definition of ‘Distribution and Service Centre’ Relevant Activities
What should businesses do now?
All businesses should reassess whether they fall within the scope of the ESR, and make appropriate notifications and reports, within the revised deadlines. This must be done irrespective of any notification made earlier in the year.
The notification and reporting deadlines are set out in the table below.
| Year-end |
Notification deadline |
Reporting deadline |
| Business having a financial year ending prior to December 2019 |
31 December 2020 |
31 December 2020 |
| Business having a financial year ending 31 December 2019 |
31 December 2020 |
31 December 2020 |
| Business having a financial year ending between January 2020 and June 2020 |
31 December 2020 |
12 months from the end of the financial year |
| Business having financial year ending after 30 June 2020 |
6 months from the end of the financial year |
12 months from the end of the financial year |
The Ministry of Finance Portal is now live, and notifications and reports must be submitted via this portal (and not to Licensing Authorities, as was the case earlier this year). The link to the portal is here.