H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai issued the Resolution of the Cabinet of Ministers No. (31) for 2019 concerning Economic Substance Regulations.
Article 1 outlines the basic definition for the implementation of this resolution. The Resolution of the Cabinet of Ministers defined the licensee as a natural, or juridical person licensed by the competent licensing authority / authorities in the State, to carry out a relevant activity in the State. This includes free zones and financial free zones.
Article 2 determines the requirements and sets out the criteria that ascertain that the licensee is carrying out an activity that achieves economic interest of the State.
Article 3 established the scope of application of the resolution.
Articles 4 and 5 from the Cabinet of Ministers Resolution define the relevant activity and regulatory authority and the “State’s core income-generating activities”.
Article 6 of the resolution clarify the requirement to meet economic substance test.
Article 7, meanwhile, identifies the assessment of whether economic substance test is fulfilled by the licensee.
Article 8 mentions the requirement to provide information.
Article 9 of the Cabinet of Ministers Resolution identifies the process of exchanging information submitted by a licensee, which the regulatory body shall provide the competent authority pursuant to this resolution.
Articles 10 and 11 of the resolution details the offences and penalties where the Economic Substance Test is not met, or for failure to provide information, or, for providing inaccurate information.
Articles 12, 13, and 14 of the resolution identify the period for imposition of penalties, right to appeal against administrative penalties, and date of payment of administrative penalties.
Meanwhile, Article 15 of the Cabinet of Ministers Resolution defines the power to enter business premises and examine business documents.
Article 16 of the Cabinet of Ministers Resolution points out that any provision contrary to, or conflicting with the provisions of this resolution, shall be repealed.
Articles 17 and 18 of the resolution stress that the Cabinet of Ministers, or a delegated authority, may issue one or more decisions to implement any provision of this resolution, which shall come into force on the date of its issuance.
UAE FTA has added three more free zones in Ras Al Khaimah as part of Designated zones which are:
1) Al Hamra Industrial Zone
2) Al Ghail Industrial Zone
3) Al Hulaila Industrial Zone
Mr Pratik Sangani has been felicitated as one of’The Indian Super 100 Middle East and Africa, Super 100 Vol 3, Next Generation and Enterpreneurs at Waldorf Astoria on 28th April, 2019.