Economic Substance Regulations (UAE)

Economic Substance Regulations (UAE)

The Regulations (Cabinet of Ministers Resolution No.31 of 2019, the “Regulations”) require UAE onshore and free zone companies and other UAE business forms that carry out any of the “Relevant Activities” listed below to maintain an adequate “economic presence” in the UAE relative to the activities they undertake.

Relevant Activities:

  1. Banking Business
  2. Insurance Business
  3. Investment Fund management Business
  4. Lease – Finance Business
  5. Headquarters Business
  6. Shipping Business
  7. Holding Company Business 
  8. Intellectual property Business (“IP”)
  9. Distribution and Service Centre Business


The Regulations apply to financial years commencing on or from 1 January 2019. Entities that are governed by the Regulations will need to submit a notification to their Regulatory Authority (defined under Cabinet Decision No (58) of 2019 issued on 4 September 2019) from 1 January 2020 onwards, and prepare and submit to the same Regulatory Authority an economic substance declaration  within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019).​



An entity is not required to meet the economic substance test and file an economic substance declaration for any financial period in which it has not earned income from a Relevant Activity.

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