The UAE Economic Substance Regulations (ESR) require all Mainland and Free Zone entities (unless exempt) carrying out “Relevant Activities” to submit an ESR Notification and an ESR Report via the UAE Ministry of Finance portal by set deadlines. These regulations align with the OECD’s Base Erosion and Profit Shifting (BEPS) framework, aiming to prevent tax avoidance by ensuring that businesses claiming tax benefits in the UAE demonstrate real economic presence.

To be ESR-compliant, entities must assess their operations beyond their trade license and prove adequate economic substance within the UAE—this includes meeting thresholds for local operating expenditure, physical assets, and UAE-based management and control.

Since its implementation in 2019, ESR has become a key regulatory focus, enforced by the Federal Tax Authority. Yet, many businesses struggle with interpretation and execution.

At Goldstone, our experienced compliance professionals offer complete ESR support:

• Identification and analysis of Relevant Activities under ESR

• Strategic advisory on meeting economic substance test requirements

• Preparation and review of ESR Notifications and Reports

• Submission assistance via the UAE Ministry of Finance portal