Economic Substance Regulations (ESR)

Entities engaging in "Relevant Activities" (e.g., Holding Company, Banking, Headquarters) must demonstrate adequate economic substance in the UAE relative to their activities, filing annual notifications and reports.

Relevant Activities

• Banking & Insurance
• Investment Fund Management
• Lease-Finance
• Headquarters & Holding Company
• Intellectual Property

Penalties for Non-Compliance

Failure to file the annual ESR Notification incurs a penalty of AED 20,000. Failure to submit the ESR Report incurs a penalty of AED 50,000 for the first offense.