Economic Substance Guidance Notes (Issued June 2025)

The Economic Substance Guidance Notes, issued in June 2025, provide detailed and practical guidance on Anguilla’s economic substance regime and the expectations placed on entities conducting certain activities within the jurisdiction.

Anguilla’s Economic Substance Regime is designed to ensure that companies carrying on certain types of activities have a genuine presence in the jurisdiction and are not established solely for administrative or nominal purposes.

In simple terms, if a company conducts specific activities, it must be able to demonstrate that its key operations, decision-making, and resources are appropriately located in Anguilla.

Who Is Affected?

Economic substance requirements apply to companies and legal entities that carry on what are referred to as Relevant Activities, which may include:

• Banking
• Insurance
• Fund management
• Financing and leasing
• Distribution and service centre activities
• Headquarters activities
• Intellectual property activities
• Holding company activities

If an entity does not carry on any Relevant Activity, it simply falls out of scope and establishing a physical presence in Anguilla becomes optional.

What Does “Economic Substance” Mean in Practice?

Entities that are in scope must generally demonstrate that:

• The company is directed and managed in Anguilla
• Core Income Generating Activities (CIGAs) are carried out in Anguilla
• There are adequate employees, premises, and operating expenditure proportionate to the activity being conducted

NB/ The level of substance required varies depending on the nature of the Relevant Activity.

Exemptions and Reduced Requirements

Certain entities may benefit from exemptions or reduced substance obligations, including:

• Companies that are tax resident outside Anguilla, once supporting evidence is provided
• Pure equity holding companies, which are subject to simplified substance requirements
• Entities that were not carrying on Relevant Activities during the relevant financial period

Why This Matters

Compliance with economic substance requirements is essential to:

• Avoid penalties or regulatory action
• Maintain good standing with the Anguilla authorities
• Support Anguilla’s compliance with international regulatory standards

How Paragon Can Assist

Paragon Corporate Services Ltd. provides end-to-end support to help clients understand, assess, and comply with Anguilla’s economic substance requirements efficiently and effectively.

Our services include:

• Complying with Mind and Management Requirements by providing  experienced corporate or individual local directors
  Economic substance assessments to determine whether an entity is in scope, the relevant activity (if any), and the applicable substance obligations
• Identification of exemptions or reduced substance requirements, including tax residency considerations and pure equity holding company classifications
• Advisory support on Core Income Generating Activities (CIGAs) and how these may be satisfied in line with the entity’s structure and operations
• Preparation and filing of economic substance notifications and annual reports with the competent authority
• Ongoing corporate administration and compliance support, including registered office services, maintenance of statutory records, and annual filings
• Outsourcing and on-island representation, provided in collaboration with our affiliated law firm, Alex Richardson & Associates, to facilitate office set-up, management, payroll, authorised signatories, and other operational requirements
• AML/KYC and corporate governance advisory, ensuring alignment across regulatory obligations

With in-house legal expertise and a highly experienced corporate services team, Paragon delivers tailored, practical solutions that give clients confidence in meeting their obligations while focusing on their business growth.