Ultimate Beneficial Owner (UBO) UAE - What you should know?

2022 Latest Update: Ultimate Beneficial Owner

According to the Ministry of Economy, the deadline for providing data on ultimate beneficial owners (UBO) was June 30,  2022, or at the time of incorporation/registration of a new entity. The licensing authorities, however, are continuing to accept registrations. Many of the licensing authorities will require the information specified by the resolution when a company applies for trade license renewal or amendment. 

Objectives of Ultimate Beneficial Owner (UBO)

9 things you must know about the Ultimate Beneficial Owner UAE

Understanding the UBO regulation is essential for every company doing business in the UAE. The following are 9 crucial factors to remember under the UAE's UBO regulation:

1. Applicability of Ultimate Beneficial Ownership

All UAE-licensed businesses, both mainland and free zones.

2. Exemptions of Ultimate Beneficial Ownership

Companies licensed in ADGM & DIFC are exempt from this Decision since they already provide information to ADGM and DIFC concerning Real Beneficiaries/Ultimate Beneficial Owners.

Companies incorporated in the financial free zones of Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC) may be subject to a different set of regulations.

Companies owned directly or indirectly by the government, whether federal or local, are excluded from this decision.

3. Requirements for Ultimate Beneficial Ownership

Create and maintain a Register of Real Beneficiaries and a Register of Partners or Shareholders.

For any changes in the details of beneficial owners, the legal person must be updated within 15 business days of the change coming into being.  

4. Real Beneficiary

As per Financial Action Task Force (FATF), the 'Ultimate Beneficial Owner' is defined as "the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is executed".

A legal entity's Real Beneficiary or Ultimate Beneficial Owner is someone who:

• Owns or controls 25% or more of the shares or voting rights;
• Ultimately owns or controls, directly or indirectly, 25% or more of the shares or voting rights;
• Holds the right, directly or indirectly, to appoint or remove most of the board of directors;
• Has the right to exercise, or exercises, significant influence or control over the legal entity;
• Exercises ultimate control over the management; or
• Controls the legal entity
  
  

Download the Declaration of the Beneficial Owner Form here

5. Contents of Register of Real Beneficiary

• Full name, nationality, date, and place of birth
• Place of residence or address (for correspondence under this Decision)
• Number of travel documents or ID cards, country and date of issue, and expiry date
• The basis on which he became a Real Beneficiary of the legal person and the date when he acquired such capacity 
• The date on which the person ceased to be the Real Beneficiary

6. Contents of Register of Partners or Shareholders

• Full name, nationality, date, and place of birth
• Place of residence or address (for correspondence under this Decision)
• Number of travel documents or ID cards, country and date of issue, and expiry date
• Number of shares owned, category thereof, and the voting rights associated thereto
• Date of acquisition of capacity as Partner or Shareholder
• In case of a Partner or Shareholder is a legal person, Name, legal form and Memorandum of Association, Address of the main office, Name of senior management personnel (and all personal identification documents), and in case of a foreign shareholder or Partner, name and address of the legal representative in UAE

7. Deadlines for the submission of Ultimate Beneficial Ownership (UBO)

Register of Real Beneficiary and Register of Partners or Shareholders should be submitted to the respective Licensing Authority on or by 30 June 2022. The licensing authorities are still accepting registrations. When a company applies for renewal or amendment to its trade license, many of the licensing authorities will request information as specified in the Resolution.

In the event of any changes, these registers should be updated and should be notified to the respective Licensing Authority within 15 business days.

The respective licensing authorities are still accepting registrations.

8. Information Submission

A natural person residing in the UAE must be authorized by the legal person to carry the responsibility of disclosing the relevant details of the Registers to the Registrar. The legal person must supply the Registrar with the natural person's name, contact information, address, and a copy of his or her identity card or passport.

9. Administrative Penalties Submission

Failure to furnish the requested information to the Licensing Authorities could result in administrative penalties and sanctions. The Ministry of the Economy (MoE) has indicated that non-compliance with the UBO resolution will result in the application of administrative sanctions. The Dubai Economic Department's website has a copy of the resolution which lists all the administrative penalties against violators as per the provision of the UBO regulation. To view and download the list of files, click here. (Go to Page 4)

What does your business need to do to comply with UBO in UAE?

Obtain a UBO Certificate:

A UBO Certificate is awarded to an entity that successfully complies with UBO rules. The certificate verifies that the entity has validated its UBO and that it keeps track of its beneficial owners and other essential data. 

Follow the right rules/procedure for UBO in UAE

At the time of onboarding or forming a new business connection, your company must follow procedures and processes to collect information about all individuals with substantial ownership or control.

Maintain accurate and up-to-date information:

Businesses should submit and maintain accurate and up-to-date information, as supplying inaccurate and misleading information will result in penalties. Aside from the charges, your organization may suffer a loss of reputation and client confidence. 

Ultimate Beneficial Owner or UBO Compliance in UAE - Final Thoughts

The implementation of legislation such as the Ultimate Beneficial Ownership is a step forward for the UAE in the fight against money laundering and the financing of terrorism and illegal activities. This decision is also consistent with the UAE's commitment to the OECD's BEPS measures.

Various other legislation, such as Economic Substance Regulations, CbCR Reporting, and AML Regulations have been enacted by the government of UAE in recent quarters in order to increase transparency in business affairs. More transparency in the country's economic system is expected as businesses tighten their overall record-keeping and disclosures.

Simplify UBO registration and compliance with KPI

Our team can assist you with further advice and guidance on this regulation and development.
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