ESRRecordKeepingServices

Economic Substance Regulations apply to entities carrying on a relevant activity, and those entities must keep records demonstrating that they meet the economic substance test. This typically covers employee records, financial and transactional records, physical asset records and board meeting minutes. Whether it applies to your company depends on whether your licensed activity falls within the defined relevant activities.

There is no fixed fee for ESR record keeping support, since the scope depends on the size of the business, the volume of transactions and the state of existing records. Compliance and advisory work of this kind is quoted after a review of your current documentation and reporting position.

Entities within scope should retain employee records, financial and transactional records, physical asset records, and board meeting minutes and management decisions. Together these documents evidence that core income generating activities, adequate employees, expenditure and physical presence exist in the UAE. The exact records required depend on the relevant activity carried on.

Incomplete records make it difficult to demonstrate that the economic substance test has been met, which can lead to a finding of non compliance and associated penalties under the regulations. The specific consequences depend on the nature of the relevant activity and the extent of the gap in documentation, so records should be organised well before any filing deadline.

Every UAE company must keep accounting and supporting records for at least five years, and this baseline applies equally to documents kept for economic substance purposes. Some records, such as board minutes evidencing management decisions, may need to be retained for longer depending on the nature of the relevant activity.

Vigor Accounting and Taxation designs record keeping systems covering employee, financial, transactional and asset records, along with board meeting documentation, so that a business can evidence its economic substance position. Support also extends to ongoing maintenance of these records and preparation for any related audit or review.