The UAE’s amended ESR (Economic Substance Regulations) has classified entities into ‘licensee’ and ‘exempted licensee’ to carry out relevant activities.
The nine relevant activities are banking, insurance, shipping, lease-finance, investment fund management, intellectual property, headquarters business, holding company business, and distribution and services.
The licensees have to file ESR reports along with documents to avoid the administrative penalties. However, exempted licensees need to file notifications only, along with the documents to substantiate their exempt status to be excluded from the ESR.
Keep filing them
If an entity fails to provide sufficient evidence to substantiate its status as an exempted licensee, it will be assumed as a licensee and will have to meet the Economic Substance test and file the report.