Your company is likely to be passive if it mainly earns investment income or mainly holds assets that produce it. A trading business is usually active. If the company is passive, its bank looks through it and reports the people who control it.
Active or passive
Under CRS, an entity that is not a financial institution is a non-financial entity. It is either active or passive. The main active test has two parts, and the company must pass both.
- Less than half of its gross income is passive income.
- Less than half of its assets produce, or are held to produce, passive income.
The rules list some other active categories too. Anything that does not meet an active category is passive.
Managed investment companies are different
A company that earns mainly from investing in financial assets and is managed by a bank, custodian or similar firm can be a financial institution itself. It then has its own CRS duties. If it is based in a country that does not take part in CRS, banks treat it as a passive entity instead.
What passive status means
The bank must identify the company's controlling persons and report those resident in reportable countries. Under the UAE guidance, these are people who own more than 25%, directly or indirectly. If nobody does, it means those who control the company by other means, and failing that, its senior managing official. The company itself has no CRS return to file. The bank does the reporting, using the entity form you give it, as covered in My bank sent me a CRS self-certification form. What do I put?
An example
Lukas Becker, a German national living in Dubai, owns a company that holds a share portfolio. The portfolio is managed on a discretionary basis by a bank, and almost all of the company's income comes from it. The company may be an investment entity rather than a passive entity, so Lukas asks for advice on its status before completing the bank's entity form.
Quick questions
Does a passive company have to file anything under CRS?
No. Under the UAE rules, active and passive non-financial entities have no CRS reporting duty. The bank reports.
Can my company's status change?
Yes. The tests look at income and assets, so a change in what the company does can change its status.
Sources: UAE Ministry of Finance, Guidance Notes for the Common Reporting Standard; UAE Ministry of Finance, CRS FAQs.
General information as at October 2026, not advice. The examples are fictional and simplified, and the rules have conditions and exceptions not covered here. Take advice on your own circumstances, in each country involved, before acting.