What is Economic Substance Regulation for SAIF Zone in UAE?
Sharjah Airport International Free Zone is an approved Regulatory Authority for Economic Substance Regulation in UAE. SAIF Zone has access to more than 2 billion consumers in the Middle East alone. Economic Substance Notification is the obligation to be filed by all the licensees administering Relevant Activity in UAE by the rule.
It is the sole responsibility of licensees for evaluation to validate it carries out a Relevant Activity. SAIF Zone Regulatory Authority merely oversees regulations of law and not accountable for handling an assessment on the applicability of Economic Substance Regulations in the UAE.
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.
What to mention in Economic Substance Notification?
Enterprises that fall under the legality of Economic Substance Regulations UAE should proffer the Economic Substance Notification with SAIF Zone that includes the following:-
- Financial year-end;
- Whether or not handles a Relevant Activity;
- Whether or not earned any income from the Relevant Activity;
- Whether any earning by the Relevant Activity is totally or partially subjected to a tax outside of the UAE; and
- Whether or not exempt due to Government control.
Should all the companies in SAIF Zone subordinate to the Economic Substance Notification?
No, not all companies in SAIF Zone are expected to perform the Economic Substance Notification. Only organizations remitting Relevant Activity in SAIF Zone should imperatively file the Economic Substance Notification. The submission of the Economic Substance Notification subject to deadline as per the law. The deadline requires to be met stringently to elude punishment.
What occurs in the situation of Non-compliance with Economic Substance Regulations in UAE?
If any licensee neglects to comply with the necessity of filing the Economic Substance Notification, then such Licensee may have to suffer punitive consequences. The punishment ranges from AED 10,000 to AED 50,000 in the first year of its Non-Compliance, and for consequent non-compliance, it ranges from AED 50,000 to AED 300,000. Additional, negligence by an Entity to comply with Regulation can also result in involuntary Exchange of Information with Foreign Competent Authority, potential end, and non-renewal of its registration.
How can an Accounting firm help Economic Substance Regulations in UAE?
Accounting firms have a distinct segment for ESR to assist and oversee the Agreement with Economic Substance Regulations in UAE with the following process:
- Professionals motivated by quality are well-aware with practical experience in seconding businesses with the applicability of Economic Substance Regulation in the UAE. They shall help overcome the issues of applicability with this enactment and assist with Economic Substance Notification.
- Deliver coaching and encouragement for compliance with the practices of ESR to steer Impact Study and Gap Analysis. It assesses whether the firm meets the Compliance investigation and proffers tips.
- Superintend Enterprise Ventures in particular and consider the applicability of Economic Substance Regulation (ESR) on the ventures. It also supplies leadership and guidance on filing Economic Substance Notification with SAIF Zone.