As part of legislative reforms aimed at improving corporate transparency, the UAE government issued Cabinet Resolution No. 58 of 2020 concerning Ultimate Beneficial Ownership (UBO) procedures, effective 28 August 2020. The framework was later updated by Cabinet Decision No. 109 of 2023, refining the reporting and registration requirements for beneficial interests, ultimate beneficial owners, and nominee board members. This guide covers the current ongoing UBO maintenance obligations, who’s affected, and a worked example of determining UBO status.
Background: How the UBO Framework Was Introduced
When the original UBO Regulations took effect in 2020, existing companies were given until 27 October 2020 to submit their initial UBO reports to the relevant Registrar. That specific historical deadline has long since passed, and companies formed since then register their UBO information as part of standard incorporation, rather than facing that original one-time deadline. What matters today is the ongoing obligation, described below, not the original 2020 compliance window.
Also check: Ultimate Beneficial Ownership (UBO) Declaration
Ongoing UBO Obligations for UAE Companies
UAE companies are required to hold continuously updated information regarding their UBOs, and must notify the Registrar within 15 days of any change to that information, this is a live, ongoing requirement, not a one-time filing exercise. Different licensing authorities across the UAE maintain their own specific reporting mechanisms, so a company should confirm the process applicable to its specific jurisdiction.
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Important Points on UBO Regulations
- Businesses that don’t fully comply with these regulations face administrative sanctions imposed by the Ministry of Economy.
- The UBO register must be maintained throughout the company’s entire lifespan, and for a further 5-year period following liquidation, dissolution, or deregistration.
- Each company must take reasonable measures to obtain accurate, updated, and appropriate information for its registers, and must protect records against loss, destruction, or damage. Companies must appoint a UAE-resident point of contact and provide their details to the relevant authorities.
- Unless otherwise provided by law, the Registrar of Companies and Ministry of Economy won’t disclose personal information contained in company registers without written consent from the relevant nominee board member or UBO.
Must check: Company Liquidation Services UAE
Who Qualifies as a UBO? Worked Example
A person is generally considered a UBO where they hold, directly or indirectly, 25% or more ownership or voting rights in a company, or otherwise exercise ultimate effective control over it, even without meeting the ownership threshold. Consider a company owned 60% by Investor A, 25% by Investor B, and 15% by a group of smaller shareholders each holding under 5%. Investor A and Investor B both qualify as UBOs individually, since each independently meets or exceeds the 25% threshold. None of the smaller shareholders individually qualifies as a UBO on ownership grounds alone, since none reaches 25% on their own, unless one of them can be shown to exercise effective control over the company through another mechanism, such as a shareholder agreement granting outsized decision-making authority despite the smaller stake.
Which Companies Are Affected?
The regulations apply to all businesses operating in the UAE, including commercial partnerships and limited liability companies. Beneficial owner identity information is maintained and stored by the relevant Registrar of Companies in its own beneficial ownership registers.
Access to this information is limited to relevant competent authorities responsible for detecting, combating, and preventing money laundering and terrorism financing, along with other persons or organizations submitting written requests demonstrating a legitimate interest in the specific information sought.
Enforcement and Verification
Local authorities can require companies to submit documents or refurnish information to confirm that beneficial ownership reports have been properly submitted. Onsite investigations may also be conducted at a business’s premises to establish beneficial owners’ identities and verify the accuracy of submitted information. Where an inspection reveals incorrect information was supplied to the Registrar of Companies, authorities impose penalties on the relevant company officers. Company liquidators are also required to maintain UBO records for companies that have been struck off.
Frequently Asked Questions (FAQs)
Is the UAE UBO reporting deadline from October 2020 still relevant today?
What ownership percentage generally qualifies someone as a UBO?
How long must a company maintain its UBO register?
How quickly must a change in UBO information be reported?
What happens if a company provides incorrect UBO information?
Is UBO information publicly accessible?
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Farahat & Co., a trusted Audit & Accounting Firm, helps businesses determine UBO status, maintain compliant registers, and meet ongoing UAE UBO reporting obligations.
Contact Farahat & Co. today to discuss your UBO compliance requirements.
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