Doing business in UAE non-free zones offers several benefits, from tax exemptions to simplified working procedures. However, these benefits come with responsibilities, particularly when it comes to complying with the Financial Standards Regulation (ESR). Ensuring timely and accurate notification and reporting of all free zones is essential to avoid penalties and to maintain uninterrupted operations.

At Risians Accounting, an accounting firm based in Dubai, we offer specialist ESR consultancy services in Dubai to help businesses in all free zones comply with the ESR. Our team of experts provides tailored ESR consultancy services in the UAE to ensure companies comply with their legal obligations, avoid heavy fines, and ensure the continued success of their business.

What is ESR and why is it important in open spaces?

The UAE launched the Financial Resources Regulation (ESR) in 2019 to comply with international standards set by the OECD and the EU for tax transparency and fair trade These laws were designed to ensure that companies doing business in the UAE have a significant economic impact in rural areas

ESR applies to businesses involved in related sectors such as banking, insurance, intellectual property, shipping, and so on. These businesses must meet the financial product criteria by demonstrating that they carry out their income-generating activities in the UAE. In addition, ESR data and reports must be provided to demonstrate compliance.

For businesses in free zones, these reporting and notification obligations are just as stringent as those in mainland jurisdictions. To avoid penalties, companies operating in free zones must work with a trusted auditing firm in Dubai like Risians Accounting to ensure compliance with ESR requirements.

Notifying & Reporting Requirements for Free Zones

Businesses operating in any UAE free zone, together with Dubai Multi Commodities Center (DMCC), Jebel Ali Free Zone (JAFZA), and Dubai Airport Free Zone (DAFZA), must comply with the same ESR requirements as onshore companies. This includes submitting ESR notifications to relevant regulatory authorities and, where necessary, submitting targeted ESR reports.

1. Notification of ESR in free zones

The first step in complying with the ESR is to submit an ESR notification. This notification informs the regulatory authority whether your business is involved in relevant sports and whether it is making any profit from these activities at a certain stage of the financial year.

The ESR notification must consist of:

• Information on whether or not the business is engaged in a relevant hobby.
• Whether the business has earned income from the relevant hobby throughout the relevant financial period.
• Confirmation whether the organization is exempt from ESR (eg if it is part of a collection that is tax resident in another jurisdiction).
• At Risians Accounting, our ESR consultancy offering in Dubai is to help free zone groups deliver well-timed and accurate notifications to avoid consequences.

2. ESR reporting in free zones

If your commercial company is engaged in relevant sports and earns profits from them, you must submit an ESR document. This document provides accurate records of the economic nature of the company in the UAE, such as the number of employees, operating fees, and profit-generating activities.

The ESR document should show that:

• The business is managed and controlled in the United Arab Emirates.
• The organization operates medium-profit activities (CIGA) in the UAE. 
• The business has adequate staffing, space, and pricing within the US.

Our UAE ESR consultancy offerings are designed to help you gather the necessary documentation and publish ESR reports that comply with regulatory requirements to help your business avoid sanctions and stay compliant.

Fines for non-compliance with ESR in free zones

Failure to comply with the ESR in UAE-free zones can lead to heavy fines. These penalties can range from AED 20,000 to AED 400,000 depending on the severity of the violation. Businesses may also face reputational damage, issues with renewing business licenses, and increased scrutiny from regulatory agencies.

The key to avoiding these consequences is operating with a professional accounting firm in Dubai like Risians Accounting. Our team of specialists ensures that your business meets all ESR obligations, from filing the correct notices and reports to complying with the specified economic substance.

Why ESR compliance is unique in free zones

Although the free zones necessary for ESRs are largely the same as for land-based organizations, there are several key differences that agencies working in unsecured zones need to keep in mind. These include the unique free regional office you must apply to, time limits for submitting notices and reports, and any exemptions that may apply to your business.

For example, whether free zones have different reporting timelines and companies in free zones that do not interact in relevant activities may still require notification to verify their tax-exempt popularity.

This is why partnering with a trusted audit firm in Dubai like Risians Accounting is vital. We are familiar with the specific needs of each free zone and can help you navigate the complexities of ESR compliance in your particular jurisdiction.

How Risians Accounting supports businesses in free zones

At Risians Accounting, we offer comprehensive ESR consultancy services in Dubai for businesses operating in free zones. Our team of specialists is well-versed in ESR requirements and can assist your business at every step of compliance, from pre-notifications to certain reports.

1. ESR consultancy and assessment

Our ESR consulting offerings begin with an intensive evaluation of your business sports. We will determine whether your organization has an ESR problem based entirely on the activities it engages in and whether it earns money from those sports.

This assessment enables us to provide tailored recommendations on the steps your business needs to take to remain compliant, whether that involves filing notices, reporting or making operational adjustments to meet the economic substance criteria.

2. ESR filing and reporting

Once we have decided that your business falls within the scope of the ESR, we are able to assist you with the preparation and submission of important notices and reviews. Our group guarantees that all submissions are correct and well-timed, helping you avoid the possibility of penalties.

We also work with you to gather the necessary documentation to demonstrate the financial viability of your business in the UAE, including staff information, operating fees, and main profit-generating activities.

3. Compliance monitoring and updates

ESR compliance is an ongoing system that requires regular monitoring and updates to ensure your business remains compliant with the most up-to-date regulatory needs. At Risians Accounting, we offer a round-the-clock guide that regularly critiques your business operations to ensure ongoing compliance.

Our crew is also informed of any modifications to ESR rules or reporting necessities in the UAE’s unsecured zones, ensuring that your business is always ready to meet its obligations.

4. ESR Compliance Audit Services

In addition to our ESR advisory services, we offer full audit services to help companies ensure full ESR compliance. Our team will conduct thorough audits of your commercial enterprise’s economic records, operations, and popularity, providing you with the insights you need to make informed decisions.

Our audit services are designed to identify any gaps in your ESR compliance, enabling us to offer advice for improvement and corrective action. By conducting regular audits, we help you keep a thorough record of compliance and avoid any sudden penalties.

Why choose Risians Accounting for ESR consulting in free zones?

As the main audit organization in Dubai, Risians Accounting is dedicated to supporting organizations in all free zones in meeting their ESR obligations. We understand the specific challenges faced by groups in non-consolidated zones when it comes to compliance and provide tailor-made solutions to bring your business into compliance with the brand-new guidelines.

1. Deep expertise in free zone regulations

Our team takes great pleasure in working with businesses across a wide range of UAE Free Zones including DMCC, JAFZA, DAFZA, and more. We are familiar with the specific ESR requirements for each free zone and can offer tailored recommendations to meet the needs of your business.

2. Comprehensive consulting services of ESR

We offer stop-to-quit ESR consulting services, from determining whether your business is in ESR trouble, to preparing and sending targeted messages. Our group handles all aspects of compliance techniques and ensures that your business stays in compliance with neighborhood rules.

3. Integrated audit and tax services

At Risians Accounting, we offer a full range of audit and tax services to complement our ESR advisory offerings. This included method ensures that every element of your business’s economic operations is in line with your compliance requirements, keeping you entertained all the time.

4. Proactive compliance support

Our proactive compliance method ensures that your business stays ahead of any changes to ESR policies. We offer ongoing support and monitoring to ensure you meet all time limits and reporting obligations and support you to avoid penalties.

Contact Risians Accounting for ESR Advisory in Free Zones

Whether your business operates in DMCC, JAFZA or any other UAE Free Zone, Risians Accounting is here to help you meet your ESR reporting and reporting requirements. Our team of experts provide trusted ESR consulting and audit services to ensure your business stays compliant and avoids penalties.

Contact us today to find out how we can help you with UAE ESR consulting services and streamline your compliance process. Let Risians Accounting be your trusted partner for all your ESR and financial planning needs.