Declaration of Ultimate Beneficial Ownership in UAE
Following publication of Cabinet Resolution on Real Beneficiary Procedures or UBO Regulations last August 28 2020, companies in the UAE are required, as described more thoroughly below, in identifying and maintaining registries of ultimate beneficial owners and to give the details on beneficial owners to local authorities that will be keeping their own registers for beneficial owners.
In relation to 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 in appointing and removing majority of board members or exercising dominant influence
Our team helps businesses with the timely filing of declaration of company’s shareholders, partners, or ultimate beneficial owners of existing entities before the deadline set at 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.
UBO Declaration in UAE – Notification Requirements
With effect from 25 October 2020, companies that are 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 clearly indicate nature and extent for 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 are names of seniors of the business, business name, its legal form, articles and memorandum of association, address of headquarters, and more.
How we can Help
The new regulations are requiring corporate entities registered and licensed in the UAE to maintain registers and submit their details to local authorities. This would make companies assess the structure of ownership for which Farahat & Co. business consultants in UAE can provide expert assistance.
Our team helps businesses maintain registers, provide updates as necessary, and comply with regulations during time of incorporation, making of any amendments, and renewal of licenses and permits. More importantly, we help businesses reduce the likelihood of committing violations that result to hefty fines and penalties.
For full compliance, we help businesses file and maintain the following registers:
Directors or managers register
This includes details of managers or directors that are acting as per instructions of third parties.
Partner or shareholder register
Offences and Penalties
Failure in abiding 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 in keeping records of company beneficial owners
- Late submission or failure in providing information to Registrar of Companies regarding changes of company beneficial ownership
- Failure in providing Registrar of Companies declaration containing information about company beneficial owners
- Failure in obtaining and holding adequate, updated, and accurate information with respect to 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 in maintaining 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 which are under liquidation or dissolution, appointed liquidators have the obligation in providing true copies of updated UBO registers to Registrar of Companies within thirty days from the appointment of the liquidators.