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Rony Eid

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Economic Substance Regulations (ESR) were introduced in the UAE in March 2019 by virtue of Cabinet Resolution No. 31 of 2019 (Cabinet Resolution). The ESR apply to all companies based in the UAE (onshore and free zones), including branches and apply to financial years starting on or after 1 January 2019. The UAE government has delegated the responsibility to regulate and administer the ESR to the various onshore and free zone authorities (such as the…

The Dubai Multi Commodities Centre (DMCC) Authority has recently issued new rules and regulations (the New Regulations) to aid the process of incorporation of companies and doing business in the DMCC more generally. The New Regulations have come to effect as of 2 January 2020.With the New Regulations, the provisions of the UAE Federal Commercial Companies Law No. 2 of 2015 no longer apply to DMCC Companies, indicating that the New Regulations are intended to…

On 10 October 2019, the European Union (EU) agreed to remove the United Arab Emirates (UAE) from their list of non-cooperative tax jurisdictions (the EU blacklist). This followed from the introduction of the Economic Substance Regulations (ESR) in the UAE in March 2019, and more recently, the specific Guidance on the ESR (the Guidance) published by the UAE Ministry of Finance in September 2019.

On 2 July 2019 the United Arab Emirates (UAE) Cabinet announced the relaxation of foreign ownership restrictions for 122 business activities specifically in the manufacturing, agricultural and services categories. This follows the issuance of the new Foreign Direct Investment (FDI) Law in September 2018 to open up the UAE mainland market to foreign investors.

The key impact of the Resolution is the obligation of companies carrying out relevant activities to meet the specified Economic Substance requirements and to conduct annual compliance reporting. Non-compliant companies could risk fines and penalties, suspension, withdrawal or non-renewal of licenses, and the disclosure of their position to other foreign authorities. Companies in the UAE carrying out the relevant activities must file their first report within 12 months from the end of their fiscal year.