UAE entities undertaking and earning income from a Relevant Activity in a financial year must perform the related “Core Income Generating Activities” in the UAE by demonstrating that:
The entity and Relevant Activity are being “directed and managed” from the UAE (through holding and minuting board meetings in the UAE, having a UAE based manager and/or directors etc.); and The entity has an adequate number of qualified employees, premises (e.g. office space), and annual operating expenditures in the UAE relative to the activity undertaken.
It is possible for an entity to carry on more than one Relevant Activity at a time, in which case generally the economic substance requirements will need to be satisfied for each Relevant Activity.
Different economic substance requirements apply depending on the Relevant Activity carried on. For example, pure holding companies are subject to less stringent economic substance requirements, but additional economic substance requirements apply to “high risk” IP-related activities.