A major change in regulations concerning ultimate beneficial owner (UBO) procedures has come into force in UAE. The UAE Cabinet issued Cabinet Resolution no (58) of 2020 concerning regulation of the real beneficiary procedures (“UBO Regulations”) and this was enacted on 28th August 2020.
How will these new regulations affect you?
The UBO Regulations establish a framework for reporting and registering beneficial interests, ultimate beneficial owners (“UBO”) and professional directors.
All UAE companies, whether you are considered “onshore” or “offshore”, must comply with the reporting obligations under the UBO Regulations. This reporting is directly to the authority that the company is registered under. It should be noted that DIFC and ADGM registered companies remain unaffected by the new regulations.
The first deadline given for reporting was 27th October 2020. However, not every authority has put in place the necessary reporting mechanisms yet, so it remains to be seen how fixed this deadline is.
Under the new UBO Regulations, a company must prepare and maintain:
- A UBO Register– for the purposes of the UBO Regulations, a UBO is a natural person 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 of that company. If no natural person satisfies the foregoing condition, then any natural person who exercises control over the company through other means shall be deemed to be the UBO and if no natural person satisfies this condition then a natural person who is responsible for the senior management of the company will be deemed the UBO.
- A Register of Professional Directors/Managers– to include details of directors/managers acting in accordance with the instructions of a third party; and
- A Register of Members- to include the number of ownership interests held by each partner/shareholder and the voting rights attached to such ownership interests and the date of acquisition of such interests.
Almost all companies registered in UAE will already have a share register. Under the UBO Regulations, any changes to any of the information provided must be given to the relevant regulatory authority within 15 days of such change or amendment.
Non-compliance with the preparation and subsequent updating of any of these registers may lead to administrative fines.
As mentioned above, the new resolution initially stated that all registers need to be completed and filed with the relevant authorities by 27th October 2020. However, where filing mechanisms have not been put in place, there is a general lack of clarity and information available. The best thing for you to do is check directly with your agent/authority what is happening in your specific jurisdiction. Please contact us for more info.