The “Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures” regulating procedures relating to beneficial owners (UBO for Ultimate Beneficiary Owner) came into force on August 28, 2020, and replaced Cabinet Resolution No. (34) of 2020, published earlier in 2020.
The regulation introduces new requirements for entities to disclose their beneficial owners. Its main objective is to strengthen the transparency of entities registered in the Emirates.
Over the past two decades, the fight against money laundering and terrorist financing has intensified, with the introduction of strict regulations aimed at ensuring transparency in corporate ownership.
What is a UBO?
UBOs are individuals who ultimately own or control the company, or have voting rights with a minimum 25% ownership interest in the company, whether through direct or indirect ownership, or who have the right to appoint or remove the majority of directors/managers.
If no individual meets this condition, any individual who exercises control over the company by other means is considered the UBO.
If no individual meets these conditions, an individual who is responsible for managing the company is considered the UBO.
Records to keep
Register of Nominee Director / Manager
This register must include the details of the administrators/managers appointed by a third party and acting on its instructions.
Register of Partner / Shareholder
This register must include the number of interests held by each shareholder in a company, the voting rights attached to those interests, and the acquisition date.
This is not a new requirement: companies are already required, under the Commercial Companies Law, to prepare and maintain these registers.
Sanctions
Article 17 of the law provides that administrative penalties of up to 100,000 AED will be imposed on companies that do not comply with this regulation or that do not submit their information to the Authorities.