Economic Substance Regulations

Economic Substance Regulations in the UAE

Economic substance regulations are the new cabinet decision endorsed by the United Arab Emirates (UAE) ministry through the Cabinet Decision No.31 on 30th April 2019. The Regulations necessitate UAE onshore and free zone companies and other UAE business forms that carry out any of the “Relevant Activities” mentioned below to sustain a suitable economic presence in the UAE relative to the activities they embark on.

Following are the few pointers to be considered: –

Who do the Regulations Apply to?

A “Licensee” under the Regulations is a natural or juridical (legal) person licensed by the competent licensing authority/authorities in the State to carry out a Relevant Activity in the UAE, including a Free Zone (including an offshore free zone) and a Financial Free Zone.

The Regulations affect Licensees:
— That make revenue from 1 or more Relevant Activities.
— For financial years starting on or after 1 January 2019.

Exemptions from Regulations

Licensees that have direct or indirect 51% or more ownership by the government of UAE (Federal or Emirate level)

Licensees that do not operate a Relevant Activity

Licensees that execute a Relevant Activity but do not have any earnings from it

How does Brooks Management Consultancies assist?

Eligibility to Regulations

A “licensee” falls under the Regulations mostly as a legal person that is registered by the respective licensing authorities in the Emirate to perform a “Relevant Activity” in the UAE. This includes all free zones together with offshore and financial free zones.

The Regulations affect Licensees:

A “licensee” falls under the Regulations mostly as a legal person that is registered by the respective licensing authorities in the Emirate to perform a “Relevant Activity” in the UAE. This includes all free zones together with offshore and financial free zones.

The Regulations affect Licensees:

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