Ultimate Beneficial Owner(s) (UBOs)
As per the UAE Cabinet Decision no. (58) of 2020 which came into effect on 28 August 2020, which requires the Names of Ultimate Beneficial Owners (UBO) of a Company and the Register of Partners/ Shareholders to be filed with the relevant registrar and licensing authorities responsible for supervising the register of trade names for the various types of establishments registered in the UAE (the Registrar) by 27 October 2020.
Definition of UBO
The Circular defines a “UBO” as an individual, who owns or controls 25% or more of a “Business Partner” either directly or indirectly.
Free Zone companies should inquire directly with their licensing authorities.
A “Business Partner” is any business entity incorporated, or a branch office (Branch) registered:
- Any natural person who ultimately owns or controls or has the right to vote over at least 25% of the company’s share capital, whether through a direct or indirect chain of ownership or any natural person who has the right to appoint or dismiss the majority of the directors of the company
- If no natural person meets the criteria under point (a) above or if there are doubts as to the identity of the beneficial owner, the beneficial owner shall be any natural person who manages or administers the company or
- If the company is unable to identify any natural person that meets the criteria under points (a) and (b) above, the beneficial owner shall be the natural or legal person who is the senior manager of the company.
Scope:
The Resolution applies to all the UAE mainland and Free zone companies, except the companies registered in the financial free zones (ADGM, DIFC) and companies owned by the Federal Government and their subsidiaries.
What is required after October 27, 2020?
The deadline mentioned in the Cabinet Decision is said to be sixty (60) days from the date the Resolution came into effect, being 27 October 2020, or by the date, the entity is established. However, as of the moment, Dubai Economy has not confirmed the date yet.
Aside from the requirements that the companies need to maintain at their premises the updated registers of beneficial owners and nominee directors, are under the obligation to notify the regulators within 15 of any change in the beneficial ownership or nominee directors. As well, companies need to designate an individual who can be contacted by the regulators regarding the matters enacted in the Resolution.
Purpose:
For the purposes of implementation Cabinet Resolution No. 58 of 2020 regarding organizing the procedures of the beneficial owner and in compliance with the UAE law on anti-money laundering and combating the financing of terrorism, all licensees (including the offshore companies) are required to keep and provide copies of the below documents:
1. Registrar of the beneficial owner.
2. Register of Partners or Shareholders.
Companies are required to keep the register updated constantly. Apart from this, the companies must notify the Registrar of any change or amendment to the information provided within 15 days of such change or amendment. In addition to this, the companies must designate a person with whom the Registrar can communicate about any disclosure. (The documents filled with handwriting will not be accepted and the customer will be required to fill and maintain a register it again).
3. Copy of the company structure.
Kindly read the attached announcement to be implemented before 31.10.2020
Compliance Obligations
All UAE-registered companies must maintain:
- A shareholders’ register
- A beneficial owners’ (the BO(s)) register
- A nominee directors’ register.
Exempted Business Partners
The following Business Partners are exempt from making a UBO declaration:
- A subsidiary or a branch of a company listed on a stock exchange
- A subsidiary or a branch of a government or a government-owned entity
- A subsidiary or a branch of an entity registered and licensed in the UAE.
