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The Ultimate Beneficial Owner is the natural person who, directly or indirectly, owns and controls a company. Individuals with ownership of at least 25% shares or voting rights of a company, or someone with the power to dismiss and appoint a majority of a company’s directors is considered as a UBO. If no natural person satisfies these criteria, the UBO is the natural person who exercises control over the company by other means. If no natural person satisfies both the conditions above, then the UBO is deemed to be a natural person who is responsible for the senior management of the company.
As of 1st July 2021 the UAE Ministry of Economy has authorised licensing authorities across the country and in the non-financial free zones to begin implementing administrative penalties and fines against any companies that fail to submit ultimate beneficial ownership (UBO) information.
Under the UBO Regulations, brought in last year by Cabinet Resolution No. 58/2020, all companies licensed and registered in the UAE – except those that are wholly owned by a local or federal government body, or those set up in the DIFC or ADGM financial free zones – are required to maintain registers with information about ultimate beneficial owners (UBOs), shareholders and any nominee board members.
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.
Article 17 states that administrative penalties are imposed upon such Mainland Companies and Non-Financial Free Zone Companies that are in breach of the UBO Regulations or do not submit their UBO information to corporate regulators. The Ministry of Economy imposed fines of up to AED100,000 on those companies that fail to submit their UBO information by 30 June.
There are separate set of regulations that apply to companies incorporated in financial free zones of Abu Dhabi Global Markets and Dubai International Financial Centre (DIFC).
How can we help?
At SSandCo. we can help our clients by preparing registers of the UBOs, Partners / Shareholders, and Nominee Directors / Managers, in accordance with the Resolution, arranging to file with the authorities, maintaining the relevant registers on a dedicated company secretarial database on an ongoing basis, inform the relevant authority of any changes or amendments to the information provided.
Contact us for more information at info@SSandCorporate.com