ESR Report submission for the financial year ending 31 December 2021 and ESR Notification submission for the financial year ending 30 June 2022 are to be filed by 31 December 2022.

The Economic Substance Regulations (ESR) is applicable to all the companies registered in the UAE, which includes Mainland companies, Free Zones etc, that carry out any of the following Relevant Activities during the financial year:

• Banking Business
• Insurance Business
• Investment Fund management Business
• Lease – Finance Business
• Headquarters Business
• Shipping Business
• Holding Company Business
• Intellectual property Business (“IP”)
• Distribution and Service Centre Business

Once a UAE company has been identified as undertaking relevant activities, the ESR requires the company to satisfy the economic substance test which comprises three elements:

1) It is directed and managed in the UAE in relation to that activity 2) It conducts Core Income-Generating Activities (CIGA) in the UAE 3) It meets the adequate requirements with regard to the level of relevant activity carried on in the UAE

If you are carrying out the relevant activities and you are earning income out of it, you need to;

• Submit ESR notification
• Submit ESR report and
• Make sure to manage the business in the way it is needed as per the law and maintain the adequate documentation

ESR Notification shall be submitted within 6 months from the end of the financial year and ESR Report should be submitted within 12 months from the end of the financial year with the Ministry of Finance.

How can Spectrum Auditing facilitate you in complying with ESR?

1. Spectrum can assist you in assessing whether ESR is applicable to