Economic Substance


The Economic Substance Regulations (“ESR”) was introduced as part of the UAE’s commitment as a member of the Organisation for Economic Cooperation & Development (“OECD”) Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation. The Federal Economic Substance Regime consists of the following:

Cabinet of Ministers Resolution No. 57 of 2020 and Ministerial Decision No. 100 of 2020 (collectively, the “Regulations") was prepared in consultation with the OECD and the European Union ("EU”).

ESR applies to legal persons and unincorporated partnerships registered by a competent authority in the UAE, that carry out one or more relevant activities as defined under ESR (referred to as “Relevant Activities”) across the UAE, including Free Zones and Financial Free Zones (such entities are referred to as “Licensees”).

Application and Administration in ADGM

In ADGM, Licensees may include companies, partnerships or branches of foreign companies or partnerships, that are registered in ADGM (“ADGM Licensees”), for financial periods commencing on or after 1 January 2019.

The ADGM Registration Authority is the Regulatory Authority responsible for administering ESR in ADGM.

Relevant Activities

ESR applies to ADGM Licensees that carry out any or more of the following Relevant Activities:

  1. Banking business
  2. Insurance business
  3. Investment fund management business
  4. Lease-finance business
  5. Headquarter business
  6. Shipping business
  7. Holding company business
  8. Intellectual property business
  9. Distribution and service centre business

Please refer to Schedule 1 of Ministerial Decision 100 of 2020 for an explanation and examples of each Relevant Activity.

Economic Substance Requirements

ESR requires ADGM Licensees that carry on one or more Relevant Activities and earn income from such Relevant Activities to meet the Economic Substance Test (As defined in the Regulations).

  • Reportable Period
  • An ADGM Licensee's Reportable Period is the accounting reference period, or financial year for which a Notification must be filed. The end of the Reportable Period should correspond to the end of the period that financial statements (if any) are prepared.

  • Economic Substance Filing Portal
  • Economic Substance Notifications and Economic Substance Reports must be submitted electronically on the Ministry of Finance Portal, which can be accessed here.

    Submission of Economic Substance Notifications and Economic Substance Reports to the Registration Authority will not be accepted.

  • Economic Substance Notification
  • All ADGM Licensees and Exempt Licensees that carry on one or more "Relevant Activities" are required to file a Notification annually, within six months of the end of the Reportable Period.

  • Economic Substance Report
  • ADGM Licensees, who are not considered exempt under ESR and undertake a Relevant Activity from which they earn income during a relevant Reportable Period, are required to meet the Economic Substance Test and file an Economic Substance Report (“ES Report”), within 12 months of the end of the financial year of the entity.

Exempt Licensees

ADGM Licensees that carry on a Relevant Activity, but claim to be exempt from such activities during the Reportable Period (“Exempt Licensees”), must still submit a Notification on the MoF ESR portal, with the required supporting evidence as defined in the Notification Guidance issued by the Ministry of Finance.

ESR exempts the below ADGM Licensees from the requirement to submit an ES Report and demonstrate Economic Substance in the UAE for the Reportable Period:

  1. Entities wholly owned by UAE Nationals or UAE resident individuals and meet the following conditions:
    1. The entity is not part of a MNE Group (as defined in the ESR), and
    2. The entity only operates in the UAE;
  2. Entities that are Investment Funds as defined in the Regulations;
  3. Entities that are Special purpose vehicles or an investment holding company of an Investment Fund as defined in the Regulations;
  4. Entities that are tax resident in a jurisdiction other than the UAE;
  5. Entities that are a branch of a foreign company and all Relevant Income of the UAE branch is subject to tax in the jurisdiction of the foreign company.

ESR Filing Deadlines

As per the ES Regulations, ES notifications must be filed within six (6) months from the end of the relevant reportable period, and Economic Substance Reports must be filed within twelve (12) months from the end of the relevant reportable period. The deadline for relevant year-ends are as follows

for licensees with Accounting reference date
for licensees with Accounting reference date
Deadline to file*
31-Aug-20 29-Feb-20 28-Feb-21
30-Sep-20 31-Mar-20 31-Mar-21
31-Oct-20 30-Apr-20 30-Apr-21
30-Nov-20 31-May-20 31-May-21
31-Dec-20 30-Jun-20 30-Jun-21 **
31-Jan-21 31-Jul-20 31-Jul-21
28-Feb-21 31-Aug-20 31-Aug-21
31-Mar-21 30-Sep-20 30-Sep-21
30-Apr-21 31-Oct-20 31-Oct-21
31-May-21 30-Nov-20 30-Nov-21
30-Jun-21 31-Dec-20 31-Dec-21
31-Jul-21 31-Jan-21 31-Jan-22
31-Aug-21 28-Feb-21 28-Feb-22
30-Sep-21 31-Mar-21 31-Mar-22
31-Oct-21 30-Apr-21 30-Apr-22
30-Nov-21 31-May-21 31-May-22
31-Dec-21 30-Jun-21 30-Jun-22
31-Jan-22 31-Jul-21 31-Jul-22
28-Feb-22 31-Aug-21 31-Aug-22
31-Mar-22 30-Sep-21 30-Sep-22
30-Apr-22 31-Oct-21 31-Oct-22
31-May-22 30-Nov-21 30-Nov-22
30-Jun-22 31-Dec-21 31-Dec-22
31-Jul-22 31-Jan-22 31-Jan-23

*The previous deadline of 31 January 2021 was applicable for:

  1. Notifications and Economic Substance Reports for Licensees with a Reportable Period which began during 2019 and ended on 31 December 2019; and
  2. Notifications for Licensees with a Reportable Period which ended on 31 March 2020, 30 April 2020, 31 May 2020 and 30 June 2020.

** Due to technical issues experienced by some Licensees with the filing portal, the MoF issued a circular extending the deadline of 30 June 2021 to 8 July 2021.

ESR Contact Information

For ESR enquiries email:

This section contains information about ESR, as well as useful links and resources to assist ADGM Licensees and Exempt Licensees to understand and comply with ESR requirements.

ESR Portal User Guides

Economic Substance Notification Summary

Economic Substance Report Summary


ADGM Outreach

ADGM Circulars

Useful Links and Resources

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