loader image

UBO REGULATION

Chapter Fourteen: UBO Regulation in Dubai

 

The United Arab Emirates has put in place resolutions that control the reporting and registering of beneficial interests. This brings the UAE in line with global best practices and helps set the nation at the forefront of ethical trading, throughout the developed world.

The resolution requires the declaration of the identities of the enterprise’s ultimate beneficial owners (UBOs) of a company, and nominee directors. In other words, all individuals who have direct or indirect control of a business enterprise through 25 percent or greater voting control, or someone with the power to appoint and dismiss a majority of the board of directors. The true owner/s of a business can only be natural persons. It can be a complicated process determining a UBO because there are often multiple layers of ownership involved or complex share arrangements in place.

The Cabinet Resolution 58, issued on 28th August 2020 by the UAE government, replaced the former Cabinet Resolution 34 with the latest regulations governing UBOs functioning to promote corporate transparency and help prevent tax evasion and financial fraud. The detailed guidelines on definitions, registration procedures and compliance regarding UBOs are covered in the resolution.

At Turnkey Family Office, you will receive expertise and trustworthy guidance in the entire regulatory landscape, that will apply to your new enterprise or business expansion into the UAE. You can confidently establish and grow your business with the tools we provide for you to understand your obligations and take advantage of private market opportunities, safely within the confines of the regulations.

The declaration for UBOs is in place to impact your new or growing business in the UAE, in a positive way. The rationale behind it is to reduce the opportunity for other enterprises to perpetrate corporate monetary fraud. Left unregulated, less ethical businesses may find openings to become involved in financial crime and this could reduce the UAE’s international financial reputation to the detriment of all those businesses striving to do the right thing. It is this risk that has instigated the passing of UBO regulations that compel businesses, organizations and institutions to identify the party or persons that will ultimately benefit from their actions.

Another advantage of the registering of UBO data, is to assist financial institutions to apply the required new client verification procedures prior to commencing a business relationship. The documentation required to be provided for registering includes:

 

  • Evidence of commercial license
  • A copy of the company’s Memorandum of Association
  • A copy of the commercial register
  • An authorized letter signed and stamped by the company, revealing the names of the correct real partners and details like names, nationality, passport, address and contact details

 

Commencing from the 1st July 2021, the UAE’s Ministry of Economy has directed licensing authorities within the UAE and in the non-financial free zones to commence implementing administrative penalties or fines for any businesses that fail to submit their UBO information according to the regulations.

All enterprises licensed and registered in the UAE must also maintain their own register of ultimate beneficial owners, shareholders and nominee members of the board of directors. The UAE Ministry of Economy can impose fines of up to AED100,000 on any companies that failed to submit their UBO information by 30th June 2021.

There is a different set of regulations that apply to companies incorporated in the financial free zones of Abu Dhabi Global Markets (ADGM), and the Dubai International Financial Centre (DIFC). Enterprises licensed by free zones are not required by the resolution to declare their UBO parties. Most free zones do, however, have their own measures in place to identify and declare their UBOs, similar in principle to Resolution 58.

The importance of the UBO regulations cannot be underplayed. The establishment of these regulations safeguards the UAE’s economic landscape and promotes its global standing. When you are establishing a new business in the UAE, or growing your existing business, you can rely on us at Turnkey Family Office to guide you every step of the way. Get in touch at https://www.turnkeyfo.com/.

For further information:

https://www.stalawfirm.com/en/blogs/view/ubo-disclosure-requirements-uae.html

https://www.lexology.com/

https://www.difc.ae/

https://www.pushdigits.ae/ultimate-beneficial-ownership-uae/

You can reach out to us through WhatsApp to freely discuss your needs.

Share:


Related Posts

ACCOUNTING, AUDITING AND VAT REQUIREMENTS IN DUBAI

Chapter Seventeen: Accounting, Auditing and VAT Requirements in Dubai   The United Arab...

THE DIFC WILLS AND PROBATE REGISTRY (WPR)

Chapter 8.1: DIFC Will and Probate Registry   What is the DIFC WPR?...

Contact us for more information

    Ask directly your questions to a representative.

    X