What are CIGAs in UAE ESR law?

CIGAs are Core Income Generating Activities that create company income. They must be performed inside the UAE.

What happens if a company fails ESR compliance?

Failure to notify or report can result in penalties starting from AED 10,000 and may increase to AED 50,000.

Why is documentation important for CIGAs?

Documentation ensures transparency and accurate records, which are required for ESR filings.

How can outsourced accounting help with CIGAs?

Outsourced accountants manage ESR filings, track income, and avoid compliance mistakes.

How does Mubarak Al Ketbi (MAK) Auditing support companies?

We provide accounting, auditing, VAT consultancy, and ESR compliance services for UAE companies.

Steps Taken by Companies If Their Income Comes Under CIGAs 🥇

Introduction

Many business owners in the UAE ask: What are CIGAs? How is income under CIGAs treated? These questions arise because the Economic Substance Regulations (ESR) are now active. Companies must understand ESR rules and check if their business falls under Core Income Generating Activities (CIGAs).

ESR applies to many types of UAE companies including:

Onshore and free zone companies
Limited liability companies
Private and public shareholding companies
Joint venture companies
Partnerships

If a business falls under ESR, it must submit notifications and reports each year. Failure to comply can result in penalties.

What Are CIGAs?

CIGAs mean Core Income Generating Activities. These are the tasks that generate gross income for a company under relevant activity. CIGAs must be performed in the UAE by staff present in the country. They include:

Banking businesses
Insurance businesses
Investment fund management businesses
Lease-finance businesses
Headquarters businesses
Shipping businesses
Holding company businesses
Intellectual property businesses
Distribution and service center businesses

For example, if a company makes management decisions, they must be made in the UAE. Expenses and operations related to CIGAs should also take place inside the UAE.

Steps Taken by Companies with Income Under CIGAs

1. Classify and Structure Activities

Companies first classify their business activities. They check if income falls under CIGAs. Non-relevant or illegal activities are identified and corrected. Outsourced accounting services help businesses monitor compliance and file ESR notifications on time.

2. Perform Gap Analysis

Gap analysis shows the difference between the company’s current state and future goals. It answers questions like:

Where is our business now?
What are our goals in the next few years?
How can we close the gap between present and future?

With professional accountants, companies can apply best practices and close gaps effectively.

3. Documentation of Financial Records

Maintaining financial records is mandatory. Transactions must be transparent and accurate. Proper documentation helps companies file ESR reports correctly. Accounting software also makes the process smooth and reliable.

4. Assess Income from Relevant Activity

Income from each CIGA is measured carefully. Expenses and assets are allocated based on operations in the UAE. Companies must ensure proper access to assets and accurate reporting of income.

5. Conduct Board Meetings with Quorum

After assessments, board meetings are conducted with directors physically present in the UAE. Findings are shared, opinions collected, and decisions recorded. Meeting minutes must be signed and stored for reference.

6. Monitor Bank Inflows and Audit Accounts

Account reconciliations help detect errors or fraud. Internal and external audits ensure financial accuracy. Audits confirm compliance with UAE law and international accounting standards.

7. Recruit Qualified Staff or Assess Current Staff

Companies identify the number of UAE-based employees needed for CIGAs. They also check qualifications and industry experience. Outsourced services such as payroll, accounting, and VAT must be supervised through agreements.

Role of Mubarak Al Ketbi (MAK) Auditing in CIGAs Compliance

Mubarak Al Ketbi (MAK) Auditing helps companies meet ESR requirements. Our team guides businesses to classify activities, maintain financial records, and prepare ESR reports. We also conduct gap analysis, perform audits, and ensure compliance with UAE laws.

Our services include:

Accounting and bookkeeping
VAT consultancy and filing
CFO support services
Management accounting
Financial auditing

With our expertise, businesses stay compliant, avoid penalties, and manage CIGA income properly.

What Can Help

Mubarak Al Ketbi (MAK) Auditing supports companies in handling CIGAs income and ESR compliance. We guide businesses in accounting, tax, and financial reporting. With our expertise, your company avoids penalties and stays compliant. Remember, “An ounce of prevention is worth a pound of cure” — taking steps today saves major costs tomorrow.

📌 Contact Information

For more information:

Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
Contact/WhatsApp: +971 50 276 2132

FAQs Steps Taken by Companies If Their Income Comes Under CIGAs 🥇

How does corporate tax help a start-up’s growth?

Corporate tax teaches start-ups to keep better records, plan smartly, and look more trustworthy, which can help them get more investments.

Are there any special tax breaks for new tech companies in the UAE?

Yes, tech companies can get tax holidays, pay zero tax on profits below a certain level, and keep special rates in some Free Zones.

Why is corporate tax good for fair business?

Corporate tax makes sure every business pays its part, so big firms can't get ahead by skipping taxes. This creates a level playing field for start-ups and supports public services.