Declaration of Ultimate Beneficial Ownership in UAE
In compliance with stringent Anti-Money Laundering Regulations in the United Arab Emirates (UAE), Cabinet Decision No. 58 of 2020 mandates that all business entities create, maintain, and submit a Beneficial Owner Register to their licensing authorities. This framework aims to uphold UAE’s international economic standards, disclose obligations related to Beneficial Owners, and establish effective regulatory measures to combat Money Laundering and Terrorism Financing.
Applicability and Exemptions
Scope of UBO Regulations in UAE
The Cabinet decision on Ultimate Beneficial Ownership (UBO) carries a wide-ranging scope, encompassing all companies operating within the United Arab Emirates, whether they are located onshore or within free zones. This comprehensive approach underscores the commitment to transparency and accountability in corporate structures.
It is essential to note that certain entities are exempt from the provisions of this resolution. These exemptions are specifically applicable to two categories:
- Companies in financial free zones such as Abu Dhabi Gold Markets and Dubai International Financial Centre and
- Companies directly or indirectly owned by the Federal or Emirate Government.
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Identifying the Ultimate Beneficial Owner
According to Cabinet Resolution No. (58) of 2020, a Beneficial Owner or Real Beneficiary can be defined as:
- A Natural Person who definitively owns or controls the establishment through direct or indirect ownership of 25% or more of shares.
- Someone who holds the right to vote by 25% or more or the right to appoint/dismiss a majority of the establishment's managers or exercises ultimate control through any other means.
- In cases where UBO cannot be identified through the above two conditions, a Natural Person holding the position of a Senior Management Official in the company may be considered the UBO.
- If two or more natural persons jointly own or control a ratio of capital in the Legal Person, all of them shall be deemed as jointly owners or controllers of such ratio.
Responsibilities of Legal Entities
- During registration and licensing, companies must provide accurate and complete details.
- Trade names and official addresses in the Emirates should be consistently featured on all company documents.
- In cases where uncertainty arises regarding the real beneficiary, the company must notify all beneficial owners.
- Any changes to the initial information provided must be reported to the relevant authority within 15 days of the change or amendment. Additionally, entities are required to appoint a UAE resident as a point of contact to facilitate communication with licensing authorities regarding UBO data and other essential information.
- Ultimate Beneficial owner data must be entered into the systems of licensing authorities and kept up to date, responding promptly to any communications from authorities to avoid penalties.
- Maintain several registers at their headquarters, including:
- Partners/Shareholders (detailing ownership interests and voting rights).
- Real Beneficiaries (explaining the rationale for their status and the date of designation).
- Directors and Nominee Directors.
- Keep records of other essential documents and UBO forms submitted to authorities.