Economic Substance Regulation (ESR) Compliance in the UAE

At Sapphire Ocean LLC, we help businesses assess, prepare, and comply with all ESR requirements, ensuring you avoid penalties and reputational risk while meeting UAE legal obligations.

What is ESR in the UAE?

The UAE Economic Substance Regulations require UAE-based businesses engaged in certain activities (called Relevant Activities) to:

  1. Demonstrate adequate economic presence in the UAE

  2. Submit annual ESR Notifications and Reports

  3. Meet substance requirements, such as having staff, expenditure, and operations in the UAE

Our ESR Services

We offer a complete package of ERP solutions designed to support businesses across the UAE.

ESR Applicability Assessment

We review your business model and structure to determine if ESR applies to your company.

ESR Notification Filing

Timely and accurate filing of annual ESR Notifications with the Ministry of Finance (MOF) portal.

ESR Report Preparation & Submission

We prepare and submit your ESR Economic Substance Report, including key financial and operational details, to demonstrate substance in the UAE.

Gap Analysis & Substance Advisory

If you do not meet ESR requirements, we provide a corrective action plan (e.g., hiring, spending, office presence).

Ongoing Monitoring & Compliance

Stay on top of ESR compliance year-round with our advisory and reminders.

Support for ESR Audits & Inquiries

We represent and support you during MOF reviews, requests for clarifications, and potential audits.

Faq

Frequently Asked Questions

The ESR aims to ensure that UAE-based entities conducting certain Relevant Activities have sufficient economic presence in the UAE and are not being used solely for tax advantages.

Any UAE entity (including mainland, free zone, or offshore) that carries out one or more Relevant Activities during a financial year is subject to ESR.

You must:

  • File an ESR Notification within 6 months of your financial year-end

  • Submit an ESR Report within 12 months (if applicable)

  • Demonstrate that you have adequate substance in the UAE (e.g., office, staff, spending)

Non-compliance may result in:

  • Penalties: AED 20,000 for incorrect notification, up to AED 400,000 for non-compliance

  • Automatic information exchange with foreign tax authorities

  • Reputational damage or issues with license renewal

Absolutely. We manage:

  • Applicability assessment

  • Notification and report filing

  • MOF portal handling

  • ESR audit support
    All with full confidentiality and regulatory compliance.

Let Us Handle Your ESR – Contact Us Today!

Contact us today for a free ESR applicability check or to file your next ESR notification with confidence.

📞 Call us now