Economic Substance


On 30 April 2019, the UAE introduced the Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “ESR”). On 10 August 2020, amendments were introduced to Resolution 31 by the Cabinet of Ministers by way of Cabinet of Ministers Resolution No. 57 of 2020, which repealed and replaced Cabinet of Ministers Resolution No. 31 of 2019.

The ESR was introduced as part of the UAE’s commitment as a member of the 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 ESR applies to Licensees (i.e. legal persons and unincorporated partnerships registered by a competent authority in the UAE and that carries out a “Relevant Activity”) across the UAE, including Free Zones and Financial Free Zones, and requires Licensees that carry on a Relevant Activity and derive income from such Relevant Activity to meet the Economic Substance Test (as defined in the ESR).

United Arab Emirates Economic Substance Regime

The Federal Economic Substance Regime consists of:

  • Cabinet of Ministers Resolution No. (57) of 2020 concerning Economic Substance Requirements, and
  • Ministerial Decision No. 100 of 2020 (Guidance).

Application in ADGM

In ADGM, Licensees and Exempted Licensees may include companies, partnerships or branches of foreign companies or partnerships, that are registered in ADGM for financial years commencing on or after 1 January 2019.

The ESR requires ADGM Licensees that carry on one or more “Relevant Activities” and earn income from such activities to have economic substance in the UAE in relation to these activities.

Exempted Licensees

The ESR exempts the following 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 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.

*However, ADGM Exempted Licensees must still submit an Economic Substance Notification on the MoF ESR portal, with the required evidence as defined in the Notification Guidance issued by the Ministry of Finance.

Economic Substance Requirements


All ADGM Licensees and Exempted Licensees that carry on one or more "Relevant Activities" are required to file a Notification annually, within 6 months of the end of the financial year of the entity.


ADGM Licensees (not Exempted Licensees) that undertake a Relevant Activity from which they earn income during a relevant Financial Year, are required to:

  1. Meet the Economic Substance Test; and
  2. File an Economic Substance Report.

Economic Substance Filing Portal

The Notifications and Reports must be submitted electronically on the Ministry of Finance Portal, which can be accessed here.

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

*The deadline of 31 January 2021 was applicable for:

  1. ES notifications and ES reports for entities with a reportable period which began during 2019 and ended on 31 December 2019; and
  2. ES notifications for entities 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.

Administration in ADGM

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

This section of the website contains information about ESR, as well as useful links and resources to assist ADGM Licensees and Exempted Licensees to understand and comply with its requirements.

ESR Contact Information

For ESR enquiries email:

Relevant Activities

Annual notification

Economic Substance Report


Useful links and resources


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