UAE: Economic Substance Regulations issued

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Published July 2019

Base Erosion and Profit Shifting (BEPS) is the use of legal tax planning strategies by companies to artificially shift profits to low or no-tax jurisdictions (in which there is little or no economic activity being undertaken by those companies). BEPS is a major concern for governments across the world and new BEPS laws and regulations are now enacted in most if not all offshore jurisdictions. Therefore, if you own or control an offshore company you need to carefully consider how BEPS might impact how you do business.

In order to address BEPS in a comprehensive manner, the Organisation for Economic Co-operation and Development together with the G20 established an Inclusive Framework on base Erosion and Profit Shifting (BEPS Framework).

There are currently more than 125 jurisdictions which have agreed to collaborate on the implementation of the BEPS Framework. Critically, many of the traditional offshore jurisdictions like BVI, Cayman Islands, Jersey, Mauritius and the United Arab Emirates have passed laws to implement the BEPS Framework in some form in their respective jurisdictions.

In our comprehensive paper, we have analysed the application of economic substance laws and regulations for relevant entities and highlighted the need to re-examine if they satisfy the requirements in their respective jurisdictions of operation.

Read the full article here.



Atiq Anjarwalla, Managing Partner (

Devvrat Periwal, Principal Associate (

Edward Macharia, Associate (



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