As we are aware, regulators in most of the countries have announced some or other relaxation measures to support MNEs/businesses in this critical economic downtime. More specifically, with respect to economic substance regulations, countries like Jersey, Guernsey, and Bermuda have announced significant relief measures to absorb the impact of COVID-19. Considering the genuine practical difficulties faced by businesses at this moment, advisory notification released by UAE MOF is a welcome move, which shall definitely help MNEs to consider COVID-19 impact while demonstrating economic substance requirements.
However, asking businesses to appoint an alternate director may not be economically feasible in this scenario, especially when most of them are facing liquidity crunches.
The announcement also clarifies that these are only temporary measures, and the businesses are required to furnish notification/report on time in order to demonstrate economic substance.
Read our previous alerts on ESR:
Click Here Recent updates and announcements
Click Here Important announcement for businesses in DIFC
Click Here Key highlights of FAQs on Economic Substance Regulations in UAE
Click Here Introduction of Economic Substance Regulations in UAE