Ultimate Beneficial Owner Reporting
Over the years, UAE has strived relentlessly to become an ideal relocation as a business hub for global companies. With attractive free-zones, internationally recognized financial centers, low tax regime, extensive network of double taxation treaties and political stability, UAE is always willing to host an enhanced global business interest. With capital flows from different jurisdictions in the backdrop of increased FATF vigilance, UAE has continued to strengthen its Compliance Regulations regarding Anti Money Laundering and Countering Terrorism Financing.
On 28 Aug 2020, UAE issued Cabinet Resolution No. 58 of 2020 on the Regulation of the Procedures Related to Real Beneficiaries. This circular replaced the older Cabinet Decision No. 34 of 2020. This resolution requires all companies licensed or registered in the UAE (excluding financial free zones) to create and maintain a register of their ultimate beneficial ownership (“UBO“) and to submit UBO data to the relevant registrar or licensing authority (“Registrar“).
Companies are required to submit the relevant UBO information to Registrar by 27 October 2020 (60 days from date of decision) or within 60 days from date of a company license issuance, whichever comes first. The decision aims to regulate companies in mainland UAE and applicable commercial free zones to maintain appropriate registers regarding UBOs. Exemption only applies to companies wholly owned by federal/local government or its subsidiaries or who are registered in financial free zones in UAE. For the rest, the below to be maintained at Registered Office.
Register of UBOs:
- UBOs are natural persons who ultimately own or control or have the right to vote over at least a 25% shareholding of the company, through direct or indirect ownership.
- Natural person who have the right to appoint or dismiss most of the directors/managers.
- Any natural person who exercises control over the company through other means shall be deemed as the UBO.
- A natural person who is responsible for the senior management of the company will be deemed as the UBO.
- The data of the UBO to be included should cover name, nationality, place of birth, residential address, travel document copy, ID card number and date of issuance and expiry, reason why the individual is classified as a UBO and the date on which the person became a UBO or ceased to be a UBO (if applicable)
Register of Partners or Shareholders
The number of ownership interests held by each partner or shareholder and the voting rights attached to such ownership interests and the date of acquisition of ownership interests. For physical persons – the register should include their full names, nationality, address, place of birth, employer name and address and an ID or travel document copy and for legal persons – the register should include their constitutional documents, address and details of their senior management.
Register of Nominee Directors/Managers:
Details of directors/managers acting in accordance with the instructions of another person. The register should include their full names, nationality, address, place of birth, employer name and address and an ID or travel document copy.
The UBO Regulations have set up a robust framework for reporting and registering beneficial interests, ultimate beneficial owners and shadow directors. Hence, all UAE companies must comply with the reporting obligations prescribed by the UBO Regulations and maintain registers of their ultimate beneficial owners and shareholders/trustees/shadow directors. With cut-off quickly approaching, Quantum Auditing, having professionals with in-depth knowledge on compliance of these regulations can facilitate in furnishing the fundamental data for the above regulatory compliance.