Key Points
- The UAE has issued Cabinet Resolution No. 58 with new beneficial ownership requirements
- The Resolution replaces Cabinet Resolution No. 34 issued earlier in 2020
- Most companies must create and maintain registers of beneficial owners and shareholders
- Companies must submit information to their licensing authority by October 27, 2020
- Ongoing reporting is required
- Noncompliance may result in sanctions
Overview
To mitigate fraud and risk, the UAE has introduced new beneficial ownership requirements for most companies registered in the UAE. Companies must submit their information to the relevant licensing authority by October 27, 2020.
Background
The UAE recently issued Cabinet Resolution No. 58 of 2020 on the Regulation of Procedures of the Real Beneficiaries to replace Cabinet Resolution No. 34 issued earlier in 2020. The Resolution requires all companies in the UAE, except for those owned by the government or incorporated in the financial free zones (Dubai International Finance Centre (DIFC) and Abu Dhabi Global Market (ADGM)), to create and maintain a register of Ultimate Beneficial Owners (UBO) and shareholders. They must file UBO records and information on all registered partners and shareholders to their licensing authority by the deadline above.
What are the Requirements?
Affected companies must submit a register of Ultimate Beneficial Owners (UBOs). UBOs are natural persons who own, control, or can vote over a 25 percent shareholding of their company through direct or indirect ownership, and who have authority to appoint and dismiss most directors and managers. In the absence of a natural person who meets the requirements above, a company can consider a UBO to be any other natural person who controls the company in another capacity. If no natural person exists who meets those requirements, the company can consider a UBO to be a natural or legal person who controls its senior management.
Registered companies must also furnish a shareholder register. The Resolution requires specific information including date of acquisition, voting rights, and the number of ownership interests held.
Continuing Obligations
Companies are obligated to notify the relevant licensing authority within 15 days of any change or amendment to the information they have provided. They must notify management of those changes and update their internal registers within 15 days.
Penalties for Noncompliance
Companies that do not comply with the requirements are subject to sanctions imposed by the UAE Ministry of Economy. The government will provide additional information on sanctions.
