Ultimate Beneficial Owner (UBO)

UBO Update

Dear Esteemed Investor,
On 28th August 2020, the UAE Ministry of Economy published Cabinet Resolution No. 109 of 2023 (the ‘Decision’) on the “Regulation of Procedures Related to Real Beneficiaries”. The Decision requires companies based in the UAE mainland and commercial free zones to maintain registers of their beneficial owners and shareholders. Further, the decisions require companies to file their registers with the relevant registrar and licensing authorities.


Objective:

To maintain UAE’s economic position with International requirements
To regulate minimum obligations in disclosure of Beneficial Owners, Shareholders, Partners & Nominee Board Members
To have effective & enduring regulatory mechanisms & procedures for the beneficial owner data


Beneficial Owner or Real Beneficiaries

A person that ultimately owns or controls, whether directly through a chain of ownership or control or by other means of control such as the right to appoint or dismiss the majority of its Directors, 25% or more of the shares or 25% or more of the voting rights in the Legal Person.
If no real Beneficiary fits the criteria above, or there is any doubt over who has final controlling, the physical person who exercises control over the Entity through any other means shall be the Real Beneficiary.
If no physical person is determined, the Real Beneficiary shall be the physical person who holds the position of the person in charge of Senior Management.
A Real Beneficiary can be made up of more than one person i.e. where more than one person participates in the ownership or control they shall all be dealt with as owners and controllers.


Registers to be maintained:

Companies have to create and maintain the following registers at their office:
Register of shareholders
Register of beneficial owners
Register of nominee directors, i.e. the person following the guidelines or instructions issued by another person.


Other key requirements:

Every Entity must take reasonable measures to obtain appropriate, accurate and up-to-date data for the Registers and preserve its records from damage, loss or destruction. They must also appoint an individual point of contact (resident in the UAE) and provide the details of that contact to the Registrar.
The Decision details the data collected and entered on each respective Register. Any additional data requested by the Registrar shall need to be provided by the deadline specified in the data request.
Entities in a regulated market, in a state of dissolution or liquidation, are subject to adjusted filing requirements under the Decision.
Any case of a violation of the provisions of this Decision can result in the Minister of Economy or the Licensing Authority imposing one or more sanctions.


Reference

You may refer to the Cabinet Decision here:

Cabinet Resolution No. (109) of 2023 Regarding the Regulation of Procedures for the Ultimate Beneficiary (English)
Cabinet Resolution No (53) of 2021 Concerning the Administration Penalties (English)


Declaration
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