Economic Substance Regulations (ESR) in the UAE

The UAE's Economic Substance Regulations (ESR) required businesses carrying on certain ‘relevant activities’ to demonstrate real economic substance in the UAE. Following Cabinet Decision No. 98 of 2024, ESR obligations apply only to financial years ending on or before 31 December 2022; they were cancelled for later periods. That does not make ESR irrelevant — many businesses still face historical notifications, reports and penalties that need to be resolved. Safeway helps with ESR back-filings, penalty reconsiderations and record-keeping.

Relevant activities under ESR

• Banking, insurance and investment fund management
• Lease-finance and headquarters businesses
• Shipping and holding company businesses
• Intellectual property businesses
• Distribution and service centre businesses

Where ESR still matters

• Outstanding notifications or reports for financial years up to 2022
• Penalties already assessed for late or missing ESR filings
• Reconsideration requests to reduce or cancel ESR penalties
• Clean records for due diligence, bank reviews and company sales

How Safeway helps

We review your ESR position for the affected years, complete any outstanding filings, and prepare reconsideration requests where penalties have been applied.

Frequently asked questions

Is ESR still required in the UAE?

ESR obligations apply only to financial years ending on or before 31 December 2022. For later periods the requirements were cancelled, but historical filings and penalties can still need resolving.

What were the relevant activities under ESR?

Banking, insurance, investment fund management, lease-finance, headquarters, shipping, holding company, intellectual property, and distribution and service centre businesses.

Can ESR penalties be reduced?

In some cases, through a reconsideration request supported by evidence. We assess whether a request is likely to succeed before filing.

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