On 24 August 2020, the UAE Cabinet published Cabinet Resolution No. (58) of 2020 on the Regulation of Procedures of the Real Beneficiary (Resolution). The Resolution requires businesses licensed and registered in the UAE (excluding in the Financial Free Zones) to create and maintain a register of their ultimate beneficial owners (UBO) and to submit UBO data to the relevant registrar or licensing authority (Registrar). This Resolution reflects a continued drive towards more transparency within the UAE and ensures international compliance with anti-money laundering regimes by introducing provisions allowing for the exchange of information on Real Beneficial Owners.
Overview of the Resolution
The Resolution applies to all corporate entities licensed in the UAE, including entities that are licensed and registered in the UAE Free Zones except for those in the Financial Free Zones, and those which are directly or indirectly wholly-owned by federal or local government.
These corporate entities will be required to create and maintain a Register of Real Beneficial Owners (Real Beneficiary Register) and a Register of Partners/Shareholders (Register of Partners).
These Registers must be submitted to a service centre of the competent licensing authority, which in the Emirate of Dubai is the Department Economy (DED)
Under the Resolution, real beneficiaries are individuals who own or ultimately control a corporate entity through the direct or indirect ownership of 25% or more of that entity’s shares or voting rights (Real Beneficiary). Such control can arise through other means, for example having the right to appoint or dismiss a majority of the entity’s managers. If no Real Beneficiary can be identified, the Real Beneficiary will be the person(s) who have ultimate decision-making authority including the right to appoint or dismiss the Managers.
In order to comply with the Resolution, the following information or documentation must be submitted to a certified service centre of the DED or other competent licensing authority, as appropriate:
- Valid copy of the business licence;
- Copy of the Memorandum of Association (if appropriate);
- Copy of the commercial register (if appropriate);
- An official letter signed and stamped by the entity stating the names of the correct Real Beneficiary. The official letter must contain the following information for each Real Beneficiary of an entity:
- name, nationality, date and place of birth;
- place of residence or address to which notifications can be sent;
- emirate ID number or passport number and its date of issuance and expiration;
- basis for, and the date upon which, the individual became a Real Beneficiary; and
- (if applicable) the date upon which the individual ceases to be a Real Beneficiary
In addition to the Real Beneficiary Register, UAE-registered companies must legally maintain a Register of Partners. However, the Resolution extends this requirement to all UAE licensed businesses (with the exception of those excluded from this Resolution). The following information is required for the Register of Partners:
- place of birth;
- name and address of employer;
- true copy of a valid Emirates ID or passport.
- name, legal form and a copy of its Memorandum of Association;
- address of the main office or headquarters of the entity, if a foreign entity, the name and address of its legal representative in the UAE and supporting documentation providing proof of such information;
- details of the person(s) who hold senior management positions.
All eligible corporate entities are responsible for providing appropriate, accurate and up-to-date information of their Real Beneficiaries, and must update the Real Beneficiary Register within 15 days of becoming aware of any changes. The competent licensing authority is under an obligation to maintain the confidentiality of information submitted to them under the Resolution.
If companies are found to be non-compliant with the Resolution, the UAE Ministry of Economy may impose sanctions, although a list of sanctions is yet to be issued.
It is critical that all applicable UAE businesses obtain professional advice to ensure their full and timely compliance with these Regulations.
At CBD we assist our clients by ensuring they have regular updates about any local regulatory changes that require action and therefore ensure compliance. If you would like any more information about the UBO declarations, please contact us at email@example.com.