Economic Substance Report
Who does this work. This is a regulated activity in the UAE and is carried out by a licensed partner firm there, who quote it directly. We coordinate the engagement and handle everything on the Indian side.
The Economic Substance Regulations apply to UAE entities carrying on defined relevant activities — among them holding company business, headquarters, distribution and service centre, intellectual property, financing and leasing, shipping, banking, insurance and fund management. If you carry on one, you notify; if you also earn income from it, you file a report demonstrating that the substance sits in the UAE rather than on paper.
The first question is almost always the hard one. Relevant activities are assessed on what the entity actually does, not on what its licence says. A company licensed for general trading that in practice holds shares in group companies is carrying on holding company business, and licence wording will not settle the point.
Where a report is due, it has to show real presence: people in the UAE, expenditure in the UAE, premises, and directed and managed decisions taken there. Board minutes signed abroad and a flexi-desk with nobody at it are exactly what the regime was written to catch.
Talk to us
ESR — and what it means for your Indian position
Tell us what you are setting up or filing. We come back with the UAE quote from our partner firm and the Indian side from us, so you see the whole cost at once.
Or call +91 98265 84555Who this is for
Holding companies, group service and distribution entities, IP holders and financing companies — mainland and free zone alike.
Scope
What the engagement covers
- Relevant activity assessment against what the entity actually does
- Notification filing within the deadline for the financial period
- Substance test review — adequate people, premises and expenditure
- Economic substance report preparation and submission where income is earned
- Board governance review, so directed-and-managed is met in fact
- Remediation plan where the current position would not pass
From you
Documents needed
- Trade licence and details of activities actually carried on
- Financial statements for the period
- Details of UAE employees, their roles and their costs
- Tenancy contract and evidence of premises
- Board minutes and details of where meetings were held
- Group structure and details of outsourced functions in the UAE
Worth knowing first
Where this goes wrong
The notification is separate from the report
Notification is due from anyone carrying on a relevant activity, whether or not income was earned. Skipping it because no report was needed is a penalty in its own right.
Holding company business catches more entities than expected
An entity whose main activity is holding shares in other companies falls in scope even if it does nothing else. Many group holding vehicles were formed without anyone considering the regime at all.
Directed and managed means meetings held here
Board meetings with a quorum physically in the UAE, minutes signed in the UAE, and directors with the knowledge to take the decisions. Resolutions circulated for signature abroad do not meet the test however tidy the file looks.
Outsourcing is allowed, absence is not
Functions can be outsourced to a UAE provider and still count, provided the entity can show it supervises and controls them. Outsourcing to an entity outside the UAE does not help.
Before you act on this
UAE corporate tax, free zone qualifying income and substance rules are still being clarified, and thresholds change. This explains the position in general terms and is not advice on your facts. Confirm the current rule before you act on anything here.
Usually needed alongside
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The boring things, done reliably.
Compliance is not glamorous work. It is deadlines met, numbers that tie, and someone picking up when you call. That is what we optimise for.
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Priced before we start
Every service on this site carries its fee. You get a written scope and a number before any work begins, and the invoice matches it.
Two people on every filing
Nothing goes to a department on one pair of eyes. A second professional reviews the return before it is submitted.
A person, not a ticket
You get a named associate who knows your file, reachable on WhatsApp, not a queue and a different voice every call.
We watch the calendar
Once you are on our books we track your due dates and reach out before the deadline, not after the late fee.