UAE Economic Substance Regulations


As part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the EU Code of Conduct Group on Business Taxation, the UAE introduced a Resolution on the Economic Substance. The UAE’s Economic Substance rules came into effect in April 2019.



Course Overview

The publication of a blacklist of non-cooperative jurisdictions by the European Union combined with wider changes in the global tax environment, made many countries with no or only nominal tax jurisdictions implement economic substance requirements. The United Arab Emirates’ economic substance rules came into effect in April 2019. All UAE entities will need to assess whether they fall within the scope of the economic substance regulations, and, if so, how they ensure to meet the economic substance requirements. Especially regulated businesses, highly mobile businesses or businesses with very limited UAE substance are at risk. The consequences are dire, as tax planning and optimization schemes may be challenged.

Learning Outcome

This workshop will help business stakeholders in determining whether the UAE substance regulations apply to their business/entities and how to ensure businesses can demonstrate the required economic substance in the UAE.

Course Content

• Origin of the ESR rules and purpose
• UAE applicable legislation
• Basic concepts

Scope of the UAE ESR
• Relevant activities
• Exemptions

• Notification
• Report
• Penalties for non-compliance

Assessment of the Economic Substance test
• Core income-generating activities (‘CIGA’)
• Outsourced CIGA
• Directed and managed in the UAE
• Adequate number of employees in the UAE
• Adequate amount of operating expenditure in the UAE
• Adequacy of physical assets in the UAE
• High-risk Intellectual Property Business
• Case study

• An opportunity for attendees to raise any queries to the ESR rules in the UAE