Ultimate Beneficial Owner Advisory in UAE

An ultimate beneficial owner is a natural person or interested party who ultimately owns and control over the company or its management according to the financial action task force (FATF). United Arab Emirates government is always a step ahead for legitimizing business’ financial activity in Dubai, Abu Dhabi, Sharjah and other emirates. Here we will discuss some major points in the cabinet resolution of the ultimate beneficiary ownership in the UAE.

Objective of Implementation UBO in UAE

The UAE ministry and authorities have been taking effective initiatives in recent years to fight against money laundering and financial crimes. The multilayer structure of corporates in UAE attracts many unauthorized accounts to do terrorism financing that badly affects the economy. To combat these crimes, the United Arab Emirates government imposed strict laws for generating, maintaining, and submitting a register of the ultimate beneficiary owner to its respective licensing authorities.

The main reason behind UBO regulation is to increase the transparency of authorized business accounts. Also, these ownership records develop an effective regulatory mechanism in the United Arab Emirates to avoid any kind of financial terrorism.

Recent UBO Resolution in UAE

The UAE ministry imposed mandatory laws for UBO compliance in all the non-financial free zones of UAE, as per Cabinet Resolution #58, all UAE registered entities must perform the following:

1. First of all, maintain:

  • Partners/Shareholders Register (state the information about the ownership interests and voting rights held by each individual).
  • Real Beneficiaries (provide the reason behind being Real Beneficiaries and the date they were termed as one).
  • Directors and Nominee Directors.
  • And other important documents and UBO forms which were submitted to authorities.

1. Notify the relevant authority of any changes regarding the initial information given, within fifteen (15) days of such change. Establishments are also required to appoint a person residing in the UAE as a point of contact, so the licensing authority can contact that person regarding the UBO data and any other basic information requirement.

2. Entering ultimate beneficial owner data in the systems of licensing authorities and keeping updated regarding any communication from authorities to avoid penalties.

Companies Responsible for UBO

This new resolution applies to all companies, including the one in the mainland and non-financial free zones such as Dubai Multi Commodities Centre, Jebel Ali Free Zone, DAFZA, DDA, etc.

Companies Exempt from UBO

As per Cabinet Resolution #58 of 2020, companies exempt from UBO are directly or indirectly owned or affiliated with the Federal or Emirate Government. Also, the companies based in financial free zones like Abu Dhabi Gold Markets and Dubai International Financial Center.

Identifying Ultimate Beneficial Owner:

Identifying the ultimate beneficial owner is easy in small businesses, but in multilayer organizations, it’s a little bit tricky. UAE authorities define specific criteria for selecting a real beneficiary, as per Cabinet Resolution #58 of 2020, the beneficial owner can be the following:

  • 1. Natural Person who owns/controls the establishment definitively, through direct/indirect ownership shares of 25 % or more.

2. Individual who holds the right to vote by 25% or more or the right to appoint/dismiss the majority of the establishment’s managers or any other means by which he exercises ultimate control over the establishment.

3. In cases where UBO cannot be identified through the two conditions above, then a natural person who holds the position of Senior Management Official in the company may be deemed as the UBO.

The entities will need to assess who counts as a UBO and consider whether anyone is a nominee Director / Manager. The Register of Shareholders / Partners isn’t a new concept as this is a requirement outlined in the UAE Commercial Companies Law, as well as in respective Free Zone Companies Regulations. However, the New Resolution requires additional information to be detailed (for example, voting rights).

Registration of Ultimate Beneficiary Ownership

The ultimate beneficiary ownership register should include the following details of the real beneficiary such as

  1. Full Name, nationality and place & date of birth.
  2. Residential Address
  3. Passport and ID number, date of issue & expiry and country.
  4. Date of Beneficiary Status Cessation, on which he became a UBO

Partners or Shareholders Registration for UBO

Along with having a register for the ultimate beneficiary, it is also important for a company to register a company to maintain a partner or shareholder register. This will include the following information for shareholder/partner registers:

  1. Number or class of shares owned by each shareholder or partner.
  2. The date on which shareholder’s capacity was acquired.
  3. Basic information like ID, Passport, Nationality, Address, Place of birth, and other information should also be included along with a true copy.
  4. Information on board members who act as nominees on behalf of shareholders or partners.

Failure To Comply With The Resolution:

Article 17 states that, If mainland and non-financial free zones companies fail to comply with the Resolution or do not submit ultimate beneficiary ownership before the due date, the UAE Ministry of Economy has announced to Impose AED 100,000 penalty for UBO non-compliance.
Deadline for UBO Compliance in UAE:

The UAE Ministry of Economy has posted the deadline as 30th June 2021. However, some relevant authorities have also announced earlier deadlines. So, it is wise to check with your license issuing authority to avoid missing the deadline. Also, if there is a change in ownership structure the company must update the register within 15 days for a new ultimate beneficiary of the organization.

What makes Bestax Chartered Accountants worth Selecting for UBO Advisory in UAE?

Bestax Chartered Accountants is a group of qualified financial advisors that are proficient in ultimate beneficiary ownership consultancy, declaration, registration and submission according to UAE authorities. We are highly skilled in UBO compliance services in Dubai, to safeguard your business from any kind of financial terrorism and money laundering. There are some benefits of selecting BestaxCA for UBO consultancy in the UAE:

  1. Understanding organization structure and identification of the beneficiary.
  2. Prepare and maintain information for registration of UBO, shareholders/ partners and managers/ nominee directors according to the UAE authorities.
  3. Offers a cost-effective UBO consultancy service that applies to all local and international standards.
  4. Comprehensive advisory on the ultimate beneficiary ownership declaration and filing in accordance with the resolution.
  5. Assure the efficiency of compliance without breaching any UBO regulation in Dubai and UAE.