UAE Cabinet Resolution No. (58) of 2020 regulating Beneficial Ownership 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 UAE, as well as to develop effective and sustainable executive and regulatory mechanisms and procedure in respect of beneficial owner data.
As per the Resolution entities licensed in the UAE mainland or any one of the commercial free zones (except where exemptions are applicable) are required to prepare and file a Ultimate Beneficial Owner (“UBO”) register that would include Partners or Shareholders Register, Nominee Director register (if applicable) 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 Resolution applies to all entities licensed in the UAE, except the following:
Entities Registered in financial free zones (Abu Dhabi Global Markets and Dubai International Financial Centre); and
Entities which are directly or indirectly wholly owned by Federal or Emirate government.
UBOs have been defined as natural persons who ultimately own or control or have the right to vote with minimum 25% shareholding of the company, whether through direct or indirect ownership or who have the right to appoint or dismiss the majority of the Directors / Managers.
If no UBOs have been identified as above or if there is any doubt about the natural person satisfying the condition above, then any natural person who exercises control over the company through other means shall be deemed as the UBO.
If no natural person satisfies any of the above two conditions, then a natural person who is responsible for the senior management of the company will be deemed as the UBO.
a) Details of Directors / Managers acting in accordance with the instructions of another person.
b) The number of ownership interests held by each Partner or Shareholder and the voting rights attached to such ownership interests and the date of acquisition of ownership interests. The information must be included in the register of UBOs includes without limitation, the name, nationality, place of birth, residential address, and travel ID card number (and date of issuance and expiry) of the UBO. The reason why the individual is classified as a UBO and the date on which the person became a UBO or ceased to be a UBO (if applicable).
The requirement to maintain a register of UBOs does not apply to entities that are owned by (i) a company listed on a recognized stock exchange that is subject to disclosure requirements that ensure sufficient transparency of its beneficial owners, or (ii) a company wholly owned by such listed company. However, The Regulations do not provide further information on recognized stock exchanges.
Entities must notify the relevant authority of any change or amendment to the information provided within fifteen (15) days of such change or amendment.
In regard to companies that are under dissolution or liquidation, the appointed liquidator has an obligation to provide a true copy of the updated UBO register to the Registrar within 30 days of the liquidator's appointment.
If companies are found to be non-compliant with the Regulations, the UAE Ministry of Economy may impose certain administrative sanctions. The list of administrative sanctions is yet to be issued. Each register must be maintained for the life of the company, and for a period of five years from the date of its de-registration, liquidation, or dissolution.
Every company must take reasonable measures to obtain appropriate, accurate, and up-to-date data for the registers and preserve its records from damage, loss or destruction. They must also appoint an individual point of contact (resident in the UAE) and provide the details of that contact.
Unless provided otherwise in the Regulations or any provisions under international laws that are enforced in the UAE or under applicable UAE laws relating to anti-money laundering, the UAE Ministry of Economy and the Registrar will not disclose to any person information contained in the registers without obtaining the written consent of the UBO or the nominee board member.
All entities in the UAE (unless excluded by the Resolution) must prepare registers of UBOs, Shareholders (Partners) and Nominee Directors by 27 October 2020. The registers of UBOs and Partners / Shareholder and Nominee Directors are to be filed with the relevant authority by 27 October 2020. However, The filing mechanisms for both onshore entities and certain Free Zones have not yet been confirmed.
Prepare registers of the UBOs, Partners / Shareholders and Nominee Directors / Managers (if applicable), in accordance with the Resolution.
Filing with the authorities
Maintain the relevant registers on an ongoing basis.
Inform the relevant authority of any changes or amendments to the information provided.