What is Economic Substance Regulation for JAFZA in UAE?
Jebel Ali Free Zone (JAFZA) is one of the Regulatory Authority of Economic Substance Regulation in UAE. JAFZA is a base for thousands of businesses from over 100 countries in the world. Economic Substance Notification is the necessity of law filed by all the licensees who conduct Relevant Activity.
Relevant activity means the Banking Business, Insurance Business, Investment Fund Management Business, Lease-Finance Business, Holding Company, Headquartered Business, Shipping Business, Intellectual Property Business, and Distribution & Service Centre Business.
Licensees are responsible for directing the assessment on whether they carry a Relevant Activity or not. The Regulatory Authority JAFZA is not responsible to conduct an assessment on the applicability of Economic Substance Regulations in the UAE.
Are all the businesses in JAFZA required to submit the Economic Substance Notification?
No, not all businesses in JAFZA need to tender the Economic Substance Notification. Only companies directing Relevant Activity in JAFZA should mandatorily file the Economic Substance Notification. The law mentions the deadline to submit the Economic Substance Notification.
Is the given deadline applicable to all entities in JAFZA falling under Economic Substance Regulation in UAE?
No, the deadline for Economic Substance Regulation UAE in JAFZA applies to only those entities falling under this law.
What happens in case of Non-compliance with Economic Substance Regulations in UAE?
If any licensee in JAFZA does not comply with the necessity of filing the Economic Substance Notification. Such Licensee may have to face Penal Consequences as provided in the Cabinet Resolution. The penalty for non-compliance of Economic Substance Regulations in UAE:
- AED 10,000 to AED 50,000 in the first year
- AED 50,000 to AED 300,000 in the subsequent year
Further, failure by a license holder to comply with Economic Substance Regulations UAE can result in:
- Automatic Exchange of Information with Foreign Competent Authority
- Potential suspension
- Revocation of the registration
How can an Accounting firm support Economic Substance Regulations in UAE?
They have a specialized team on the subject to support and guide on the Compliance with Economic Substance Regulations in UAE with the following process:
- Examine Business Activities in detail and appraise the applicability of Economic Substance Regulation (ESR) on the activities. Also, to render assistance and direction on filing Economic Substance Notification with JAFZA.
- Provide direction and assistance for compliance with the provisions of the Regulation to convey Impact Study and Gap Analysis. It evaluates whether the company meets the Compliance test and provides recommendations.
- Quality-driven specialists are well-versed with practical experience in helping companies with the applicability of Economic Substance Regulation in the UAE. They shall help conclude the applicability of this law and assist with Economic Substance Notification.
For enquiries, call +971 5679 52590 / E-mail: info@aviaanaccounting.com
Related Articles:
ESR on Banking and Insurance Business
What are the matters a Licensee should consider under ESR?
Penalties for Non-Compliance with Economic Substance Regulations
Requirements to meet Economic Substance Test
What activities to be conducted for ESR?