Background
On 10 August 2020, the UAE Cabinet of Ministers issued Cabinet Resolution No. 57 of 2020 (the “amended ES Regulations”) which replaces the original ES Regulations, along with updated Guidance clarifying the amended ES Regulations (Ministerial Decision 100 of 2020 dated 19 August 2020).
The amendments to the ES Regulations and Guidance provide welcome changes and additional clarity that should help reduce the overall burden on businesses in the UAE.
These changes include
to the definition of “Licensee”,
the introduction of some additional categories of exempted Licensees,
clarifications regarding the treatment of branches
The UAE introduced economic substance requirements for certain businesses on 30 April 2019 through the Cabinet of Ministers Resolution No.31 of 2019 on Economic Substance Regulations (“the original ES Regulations”). Further guidance on the application of the original ES Regulations was issued on 11 September 2019 pursuant to Ministerial Decision No. 215 of 2019 (“Guidance”).
In addition, the UAE MoF has updated the information on its economic substance website (link here).
The amended ES Regulations apply from 1 January 2019 detailing important changes to the scope and administration of the economic substance regime in the UAE, which are set out below: