[IMP] ESR Compliance Alert for Businesses in UAE | Deadline 30 September 2024

ESR Compliance Alert for Businesses in UAE

Hi Finanshels Community!

Welcome to the latest edition of UAE Compliance Updates from Finanshels.com. Whether you're on a beach vacation or managing business remotely, staying on top of your compliance obligations is crucial. We're here to help you avoid fines and keep your business running smoothly with these key updates:

Introduction

In today’s fast-paced business environment, staying on top of compliance is more than just a necessity—it's a strategic move that can significantly impact your bottom line. As a business operating in the UAE, understanding the latest compliance regulations is crucial to avoiding costly penalties and ensuring your business remains competitive.

We understand that keeping up with compliance requirements like the UAE’s Economic Substance Regulations (ESR) can feel overwhelming. It has been Introduced to ensure businesses maintain a genuine presence in the UAE, ESR is essential for companies engaging in specific activities.

By staying informed and taking the right steps, you can avoid potential penalties and keep your business running smoothly. We're here to guide you through the essentials of ESR compliance, so you can focus on what you do best.

What is ESR?

ESR is a requirement by the UAE authorities to ensure that businesses demonstrate real economic activity in the UAE. It was introduced in April 2019 as part of the UAE's commitment to preventing harmful tax practices. Simply put, ESR ensures that what your business reports aligns with actual operations within the UAE.

Who Needs to Comply?

ESR applies to UAE mainland and free zone companies, along with other business forms that engage in any of the 'Relevant Activities.' These activities include:

• • Banking

• • Insurance

• • Investment Management

• • Lease-Finance

• • Shipping

• • Holding Company

• • Intellectual Property

• • Headquarters

• • Distribution and Service Centers

If your business falls into these categories and has earned income from these activities, compliance is required. If not, or if your business meets certain exemptions, the Economic Substance Test and reporting may not be necessary.

What Should I Do if My Business is Engaged in Relevant Activities?

If your company is involved in relevant activities, the ESR requires the company to satisfy the economic substance test which comprises three elements: 

1. 1. It is directed and managed in the UAE.

2. 2. It conducts Core Income-Generating Activities (CIGA) in the UAE.

3. 3. It meets the adequate requirements concerning the level of relevant activity in the UAE.

Upcoming ESR Deadlines

To help you stay on top of compliance, here are the key deadlines:

Penalties for Non-Compliance

Failure to submit the ESR notification on time can result in a penalty of AED 20,000, and missing the report submission deadline can lead to a fine of AED 50,000. It's crucial to stay compliant to avoid these penalties and keep your business running smoothly.

How Finanshels Can Help

We’re here to make ESR compliance easier for you with our tailored services:

1. 1. Assessment and Registration: We’ll review your business activities to determine ESR applicability.

2. 2. ESR Notification Filing: We handle the notification process, ensuring everything is submitted on time.

3. 3. Compliance Advisory: Our "Impact Study and Gap Analysis" helps you understand any required changes and guides you through compliance.

4. 4. Report Submission: We take care of submitting your ESR Report to the authorities, so you don’t have to worry about deadlines.

Why Choose Finanshels?

Get a Complimentary ESR Assessment and Registration When You Choose Our ESR Compliance Package!"

If you have any questions or need further assistance, feel free to reach out to us at [email protected] or call us directly at +971 50 575 4087. 

We’re here to make ESR compliance stress-free for you!

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Meet Our Founder

Hi, I’m Muhammed Shafeekh, founder of Finanshels.com. Our mission is to help businesses like yours navigate the complex UAE tax landscape with ease. Follow me for the latest tax updates and insights:

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Stay informed, stay compliant, and let’s navigate the UAE tax landscape together.

Best regards,

Muhammed Shafeekh
Founder, Finanshels
+971 50 575 4087

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Thank you for being a valued subscriber. We look forward to bringing you more updates and insights in our next edition.

For the latest updates, be sure to regularly check the Federal Tax Authority's website and consult with tax professionals to stay compliant and informed.