Entities Exempted From Application of the Regulation
The provisions of this Resolution shall not apply to any commercial company (as defined in Article 1 of the Commercial Companies Law) in which the Government of the State, or the Government of any Emirate of the State, or any governmental authority or body of any of them has any direct or in direct ownership in its share capital.
Requirements to Meet the Economic Substance Test
The Economic Substance Test in relation to a relevant activity is met by the licensee in the following cases:
- If the Licensee conducts State Core Income Generating Activity in the State.
- If the Licensee is directed and managed in the State in relation to that activity.
- Having regard to the level of Relevant Activity, if there is an adequate number of qualified full-time employees in relation to that activity who are physically present in the State(whether or not employed by the Licensee or by another entity and whether on temporary or long-term contracts), or adequate level of expenditure on outsourcing to third party service providers, whose activities, employees, expenditure, and premises are in the State; and these activities, employees, expenditures and premises are adequate for carrying out the Relevant Activity being outsourced.
- If there is adequate operating expenditure incurred by it in the State, or adequate level of expenditure on outsourcing to third party service providers whose activities,employees, expenditure and premises are in the State; and these activities,employees, expenditures and premises are adequate for carrying out the Relevant Activity being outsourced.
- If there are adequate physical assets in the State or adequate level of expenditure on outsourcing to third party service providers in the State, for the activities of the Licensee.
- In the case of State Core Income-Generating Activity carried out for the