COMPLIANCE & REGULATIONS
- Part 1- IHC Humanitarian Organizations and Commercial Entities Common Regulations.
- Part 2- IHC FZLLC Special Regulations
- Annex 1 – IHC Licenses List of Activities
- Annex 2 – IHC List of Tariffs
- Annex 3 – List of Fines & Penalties
Economic Substance Regulations (“ESR”)
As part of the UAE’s commitment as a member of the OECD Inclusive Framework, the UAE issued Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “Regulations”) on 30 April 2019. Guidance on the application of the Regulations was issued on 11 September 2019 (Ministerial Decision No. 215 of 2019), and Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies lists the Regulatory Authorities tasked with the administration and enforcement of the Regulations. Amendments to the Regulations were made by Cabinet of Ministers Resolution No. (57) of 2020 on 10 August 2020, and updated Guidance was issued on 19 August 2020 (Ministerial Decision No. (100) of 2020 The Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake (“Economic Substance Test”).
The Regulations apply to financial years commencing on or from 1 January 2019. Entities that are within the scope of the Regulations (including IHC’s members) are required to submit an annual Notification form to their Regulatory Authority (IHC), and complete and submit to the same Regulatory Authority an Economic Substance Report within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019). An entity is not required to meet the Economic Substance Test and file an Economic Substance Report for any financial period in which it has not earned income from a Relevant Activity or if it meets the conditions for being exempt. A Notification form will need to be submitted regardless. Failure to comply with the Regulations can result in penalties, spontaneous exchange of information with the Foreign Competent Authority (as defined in Article 1 of the Regulations), as well as other administrative sanctions such as the suspension, revocation, or non-renewal of the entity’s trade license or permit.
While it is each IHC Members’ responsibility to evaluate their obligations under the ESR, determine whether it conducts a Relevant Activity, and ensure compliance with the regulations, the IHC will provide support to general enquiries addressed to firstname.lastname@example.org or on +9714 5776308.
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Anti Money Laundering and combat of terrorism financing (AMLCFT) laws and regulations:
Ultimate Beneficiary Owner (UBO) laws and regulations:
Cabinet Decision No 74 dated 27/10/2020
Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions on the Suppression and Combating of Terrorism, Terrorist Financing, Countering the Proliferation of Weapons of Mass Destruction and its Financing and Relevant Resolutions.
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