Meeting the ESR requirements allows you to avoid losing tax benefits and ensure compliance with international standards.
standards, including the OECD rules and banking regulations. Tightening the policy of local banks
and increased control over tax schemes requires a careful approach to fulfilling these obligations.
IBS Group provides solutions that help you minimize financial, legal and tax risks, as well as ensure compliance with ESR requirements.
Companies that meet the requirements of the Economic Substance (ESR) are required to pass an annual compliance test and submit a report to the regulatory authority within 12 months after the end of the financial period. UAE regulators set the form and procedure for submitting reports, adapting them to the specifics of companies ' activities and their place of registration.
Companies that fall under the ESR must pass an annual compliance test. This includes: Confirmation of CIGA management in the UAE. Preparation and submission of a report to the regulatory body in the prescribed form. IBS Group provides a full range of services to meet ESR requirements, including evaluating your performance, helping you prepare reports, and minimizing risks.
IBS Group uses its resources, government licenses and expertise to ensure that businesses in the UAE are fully compliant with ESR requirements.:
Rent a real office
Providing a physical address for doing business in the UAE.
Creating a staff of employees
Employ a sufficient number of employees, depending on the size of the business.
Means of communication
Local phone number, postal address, domain and hosting in the UAE, confirmation of sending and receiving correspondence.
Business Management Center
Evidence of holding shareholder meetings and key decision-making in the UAE.
Corporate reporting
Preparation of accounting statements and annual financial statements in accordance with the requirements.
Obtaining the status of a tax resident
Registration of a residence certificate and filing of tax returns.
Understanding the subtleties of economic Substance Regulations (ESR) in the UAE will help you avoid the risks of recognition of activities as illegitimate, as well as protect your business from sanctions from state and fiscal authorities.
Controlled Licensee
This is a legal entity registered in or outside the UAE that engages in controlled activities (CIGA).
Controlled Activities (CIGA)
It includes activities that generate income from the territory of the UAE, such as holding activities, logistics, intellectual property, and others.
ESR Compliance
Companies that carry out CIGA are required to confirm the presence of a Command and Control Center in the UAE.
Document management
All companies must keep their accounting records for 6 years after the end of the financial year.
Providing a restricted resident director to confirm that the company's executive body is located in the UAE.
Comprehensive support: administrative, secretarial, legal, PRO services, IT support, as well as outsourced personnel.
Rent offices in the IBS Business Center to pass KYC checks and confirm your economic presence in the country.
Assistance in obtaining a tax domicile certificate as proof of compliance with the requirements of belonging to the UAE jurisdiction.
Preparation of an audit report, assistance in filing tax returns and registering with the tax authorities.
Support of changing the jurisdiction of registration of a foreign company to the UAE, which provides unique tax advantages.
Branches of foreign organizations that host CIGA and receive relevant income are also required to meet the ESR if their income is not taxable outside the UAE. Parent companies or head offices registered in the Emirates are required to submit a report on their activities and the activities of branches in one document.
Inability to pass KYC and open a bank account due to lack of evidence of operational activity.
Failure to comply with the ESR in a timely manner will result in penalties imposed under UAE law.
Failure to meet the requirements may result in the application of the usual tax rates on dividends, interest and royalties.
Possible challenges to tax schemes and transfer pricing methods.
Without complying with the ESR, companies may be subject to taxes at their place of actual business.
Disclosure of business information under the CRS, which may lead to the transfer of data to the country of residence.
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