Economic Substance Act

The Economic Substance Act is a law designed to ensure companies are genuinely operating in their claimed jurisdictions, especially for tax purposes. It requires businesses to demonstrate real economic activity, such as having staff, offices, or operations in the location where they’re registered. The goal is to prevent companies from creating shell entities solely for tax advantages without real economic presence. This promotes transparency, fair taxation, and reduces tax avoidance by ensuring companies contribute where they truly do business.