UAE Economic Substance Notification

UAE, Middle East

The deadlines for filing economic substance notifications are on the horizon (or indeed just passed). In order to comply with the regulations introduced on 1 January 2019 concerning economic substance (Cabinet of Ministers Resolution No.31 of 2019) (the “Regulations”), all business entities registered in the UAE (subject to a few specific exceptions) must file an economic substance notification (the “Notification”) to their relevant regulatory authority i.e. Ministry of Finance or freezone authority where its trade licence is issued. Notifications must be issued before a nominated deadline to avoid the risk of fines. Please see previous LawNow for further details surrounding the Regulations.


The deadlines to file the Notifications vary, some of which are outlined below. Please note that some of these dates are extensions of a previously advised date and they are all subject to change at each authority’s discretion.

  • Dubai Silicon Oasis – 31 May 2020
  • DAFZA – 31 May 2020
  • DIFC - 12 June 2020
  • ADGM – 30 June 2020
  • DMCC – 30 June 2020
  • RAKICC – 30 June 2020
  • Dubai World Trade Centre – 30 June 2020
  • Securities and Commodities Authority (SCA) – 30 June 2020
  • DDA – no announcement yet, but understood to be imminent

For other relevant authorities, it is advisable to monitor announcements in respect of their deadlines.


The purpose of the Notification is to determine whether a business has been carrying out a “Relevant Activity” during its financial period (i.e. its latest financial year commencing after 1 January 2019), and if so, whether it has generated revenue from that Relevant Activity during that period. While the Regulations and associated guidance offer some help in making these assessments, including offering some practical examples, from our experience to date there are a lot of grey areas that are not covered by the Regulations or guidance. Companies are therefore required to consider, in the wider context of the Regulations (and mindful of their “substance over form” approach), whether they do in fact tick those boxes.

If companies determine that they did carry on a Relevant Activity, and if they received income in relation to that activity during their relevant accounting period, they will then need to file an Economic Substance Return within 12 months from the end of the relevant period. This is a secondary submission to the relevant authority there the business must demonstrate that, in generating that income from the Relevant Activity, they did so with appropriate economic substance in the UAE.


UAE entities should be finalising their Notifications as soon as possible in order to be compliant with the Regulations and to determine whether a full Economic Substance Return needs to be made. It should also be noted that non-compliance will result in fines.

The current COVID-19 pandemic may bear some relevance in this regard, especially where economic activities may be paused or business operations altered in response to the pandemic. Companies may need to consider whether their altered business models take them into or out of scope of generating revenue from Relevant Activities during the relevant period.