ESR Services in ADGM

Economic Substance Regulations (ESR) were introduced globally to address tax avoidance and evasion. As an OECD member, the UAE aligns its legal framework with global standards, subject to OECD review. The economic substance framework, founded to regulate tax liabilities in the UAE, applies to all companies licensed in the country to control tax evasion. This regulation helps to mitigate the advantages derived from low-tax systems, applying to businesses registered both onshore and offshore. ESR regulations apply to all licensees in the UAE, including those on the mainland, in free zones, and offshore, as well as individuals, engaged in activities categorized as "Relevant Activities" (RA). These activities encompass banking, investment fund management, insurance, shipping, distribution and service center operations, lease financing, headquarters operations, holding company activities, and intellectual property management.