Declaration of Ultimate Beneficial Ownership (UBO) in UAE
What is a UBO Declaration in UAE?
Following the publication of the Cabinet Resolution on Real Beneficiary Procedures or UBO Regulations last August 28, 2020, companies in the UAE are required, as described more thoroughly below, to identify and maintain registries of ultimate beneficial owners and to give the details on beneficial owners to local authorities that will be keeping their registers for beneficial owners.
About the regulations, “beneficial owners” refer to individuals that have control or ownership of a company through:
- Ownership of twenty-five percent or more company equity or having more than twenty-five percent of company voting rights;
- Having other company ownership interests or control through other means like having the power to appoint and remove the majority of board members or exercising dominant influence
Our team helps businesses with the timely filing of a declaration of the company’s shareholders, partners, or ultimate beneficial owners of existing entities before the deadline set on the 27th of October 2020. For new entities, filing is done at the registration or incorporation. With the guidance of our business consultants, we will also help you provide additional information that may be requested by the Registrar that is beyond what is required in the Ultimate Beneficial Ownership Regulations.
What Are the Requirements for the UBO Declaration?
With effect from 25 October 2020, companies seeking to operate or redomicile in UAE are to submit, along with Articles and Memorandum of Association, statutory forms to be signed or sealed by at least two proposed directors unless they want to have a single director. Companies are to identify every single beneficial owner and indicate the nature and extent of beneficial interests that are held by every ultimate beneficial owner. The DED and other licensing authorities won’t proceed with company registration unless they are satisfied with the declaration that is needed in terms of specific regulations that are complied with.
Existing business entities also have to provide their UBO information to the Registrar of Companies. Information needed includes names of seniors of the business, business name, legal form, articles and memorandum of association, address of headquarters, and more.
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What is UBO Filing in UAE?
Our team helps businesses maintain registers, provide updates as necessary, and comply with regulations during the time of incorporation, making any amendments, and renewal of licenses and permits. More importantly, we help businesses reduce the likelihood of committing violations that result in hefty fines and penalties.
For full compliance, we help businesses file and maintain the following registers:
UBO Register
A UBO is an individual that’s given control or ownership of a company. The person to be considered an ultimate beneficial owner has to have a minimum shareholding of a company of twenty-five percent. The ownership can be direct or indirect. If no person in a company can satisfy the condition, any person exercising control over a company will be considered as the UBO.
Directors or Managers Register
This includes details of managers or directors who are acting as per instructions of third parties.
Partner or Shareholder Register
Includes specific ownership interests that are held by every shareholder or partner as well as voting rights that are given to ownership interests together with other information deemed essential by authorities
Offences and Penalties
Failure to abide by any obligation set out in the Beneficial Owners Procedures Regulations can attract several liabilities for a company and the company officers. In certain cases, the beneficial owners and shareholders will also get penalized for default, and daily penalties can continue accruing if default continues. Our team will help you avoid committing the following violations:
- Failure to keep records of company beneficial owners
- Late submission or failure to provide information to the Registrar of Companies regarding changes in company beneficial ownership
- Failure to provide Registrar of Companies declaration containing information about company beneficial owners
- Failure to obtain and hold adequate, updated, and accurate information concerning beneficial owners six months from the regulations being published
Take note: any shareholder, officer, or company beneficial owner who recklessly or knowingly make a declaration, statement or otherwise gives the Registrar false, deceptive or misleading information will be liable to criminal offense that’s punishable by law.
Officers of a business operating in the UAE that fails to maintain records of ultimate beneficial owners will be exempt from any liability if there is sufficient proof shown for compliance with provisions, carrying out their due diligence, and proof that default wasn’t attributable to any negligence, omission, or act on their part.
Any changes to information that are contained in authorities’ registers are to be reported within fifteen days from the date changes were enforced. With regards to companies that are under liquidation or dissolution, appointed liquidators must provide true copies of updated UBO registers to the Registrar of Companies within thirty days from the appointment of the liquidators.
