As part of legislative changes made by the UAE government targeted at improving corporate transparency, UAE issued a Cabinet Resolution concerning regulations on real beneficiary procedures last August 28 2020. The Ultimate Beneficiary Ownership (UBO) Regulations provide a framework for the reporting and registration of beneficial interests, company ultimate beneficial owners, and the shadow directors.
With the new regulations, UAE companies are to hold updated information regarding UBOs. They are also required in submitting notifications to the Registrar as well as notify the Registrar in less than fifteen days regarding any change.
All UAE companies are to comply with their obligations. Reports are to be given before October 27 2020 for existing companies. Take note: different licensing authorities have their own set of reporting mechanisms.
Important points on UBO Regulations
- The businesses that don’t fully comply with the new regulations will incur administrative sanctions to be imposed by the Ministry of Economy in UAE.
- The register has to be maintained throughout the entire lifespan of a company, as well as for a five-year period from the liquidation, dissolution or deregistration date.
- Each company has to take reasonable measures in obtaining accurate, updated, and appropriate information for registers. Records are to be preserved from being lost, destroyed or damaged. Companies are to appoint a point of contact that is a UAE resident and details for the point of contact must be provided to concerned authorities.
- Unless stated in the law provisions, the Registrar of Companies and Ministry of Economy in UAE won’t be disclosing personal information that are contained in company registers without providing written consent to a nominee board member or UBO in UAE.
Obligation of existing UAE businesses
All companies are required in keeping their own register for their beneficial owners. Any new companies that will be registered following day of enforcement of UBO regulations are to comply with the requirement.
Companies that are affected
The new regulations apply to all businesses operating in the country including commercial partnerships and limited liability companies. All information that are concerned with the beneficial owners’ identity will be maintained and stored by the UAE Registrar of Companies with its own registers of company beneficial owners. Those who have limited access to the registers are relevant competent authorities’ persons that are subject to the obligations in relation to the detection, combating, and prevention of money laundering within the nation and combatting the financing of terrorism in the country; and other persons or organizations that submit written requests which show legitimate interest regarding information sought after.
Local authorities can demand companies to submit documents or refurnish information in order to confirm reports of beneficial ownership have been submitted. Onsite investigations may also be implemented at the premises of business in order to establish beneficial owners’ identities and/or to ensure that the information of owners submitted is accurate. In the event that the inspection shows incorrect information was supplied to the Registrar of Companies, the authorities will impose a penalty on relevant company officers. Company liquidators are also to keep records of struck-off company beneficial owners.
In order to find out how exactly the new regulations apply to your business, Call us here in Farahat & Co. for an assessment.