Compliance of UAE Beneficial Ownership Regulations

20/10/2020

Introduction of Ultimate Beneficial Ownership Regulations in UAE:

Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures (the “Resolution”) came into effect on 28 August 2020 and replaced Cabinet Resolution No. 34 of 2020 issued earlier this year.
The Resolution introduces new requirements for entities to disclose its beneficial owners. The main purpose is to enhance transparency of entities registered in the UAE, as well as to develop effective and sustainable executive and regulatory mechanisms and procedures in respect of beneficial owner data.
The Resolution requires entities licenced in the UAE (unless exemptions apply) to prepare and file a Ultimate Beneficial Owner (“UBO”) register, Nominee Director register (if applicable) and a Partners or Shareholders register, with the relevant authority within sixty (60) days from the date the Resolution came into effect, being 27 October 2020, or by the date the entity is established.

The UBO Regulations apply to mainland companies and companies incorporated in non-financial free zones such as Dubai Multi Commodities Centre, Jebel Ali Free Zone, Ajman Free Zone, RAKEZ, DAFZ, SAIF Zone, SHAMS, DDA etc. The regulations exempt the companies based in the financial free zones in UAE like Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC) as such companies are required to comply with the separate UBO requirements that are in place for such financial free zones.

The Regulations require maintenance and update on a timely basis of the Statutory Registers of the Ultimate Beneficial Owners, Shareholder, Nominee Directors & Managers and the declaration in the prescribed form and mode to the respective licensing authorities under which the company is incorporated and are regulated.

1. Register for the Ultimate Beneficial Owner - A Specific Register of the Beneficial Owners in the Legal Person, which includes all of their data.

2. Register for the Nominee Directors/ Manager - A Specific Register of any natural person who acts in accordance with the directives, instructions or wills of another person.

3. Register for the Partners or Shareholders - A Specific Register of the Partners or Shareholders in the Legal Person, which includes all of their data.

4. Registrar - The entity in charge of supervision of the commercial names register for different types of corporate entities registered in the State, which includes the Licensing Authority.

5. Beneficial Owner: The natural person who ultimately owns or controls the Legal Person, whether directly or through a chain of ownership or control or any-other indirect means, and also the natural person on whose behalf the transactions are being conducted or who exercises ultimate control over a legal person.

6. Nominee Board Member - Any natural person who acts in accordance with the directives, instructions or wills of another person.

7. Trustor - A natural or legal person who transfers the management of his funds to a trustee by virtue of a deed.

8. Trustee - A natural or legal person who enjoys the rights and authorities granted by the Trustor or the Trust Fund, to manage, use and dispense of the Trustor’s funds in accordance with the conditions imposed on him by either of them.

Update On 01 June 2021

It is to be noted that starting from July 1, 2021, the penalties stipulated in the Cabinet Resolution No. 53 of 2021 on the Administrative Penalties Against Violating ultimate beneficial owner procedures will come into effect.

These include the issuance of written warnings up to imposing Dh100,000 in fines in the event of recurrence and continued noncompliance, along with additional administrative penalties, including, among others, license suspension for one year, and restrictions on board of directors’ authority.

Hence it is imperative to comply with the requirements of the UBO Regulation before the end of the 30 June 2021 to avoid being subjected to the administrative penalties.

For more information on how Gupta Accountants could assist you in compliance with Ultimate Beneficial Ownership Regulations in UAE, contact us today.
Gupta Accountants competent team of chartered accountants in Dubai, provides best supports at all the stages of the compliance Ultimate Beneficial Ownership Regulations in UAE to companies registered under free zones and on main land, established in the emirates of Dubai, Abu Dhabi Sharjah, Umm Al Quwain, Ajman, Ras Al Khaimah and Fujairah.

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