Ultimate Beneficial Owner(UBO)

Introduction

• Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures (the “Resolution”) took effect on August 28, 2020, and replaced Cabinet Resolution No. 34 of 2020 issued earlier.
• The Resolution covers the most updated requirements for the entities in UAE to disclose their Ultimate Beneficial Owners, which intends to enhance the transparency of the UAE registered entities.
• It also plans to develop effective and sustainable executive and regulatory mechanisms and
  procedures for beneficial owner data and improve implementation to ensure International
  Compliance and global confidence.

Who is Ultimate Beneficial Owner

• The ultimate beneficial owner (UBO) is the natural person who ultimately owns or manages a company. This person does not have to be known directly as the owner. Such structures are not illegal, but are often used for covert criminal activities and frauds.
• According to the Money Laundering Act (GwG), a beneficial owner is a person who owns more than 25% of the company’s shares, controls more than 25% of the voting rights or who can similarly exercise significant control over the company.

Transparency & Accountability
By revealing the individuals who ultimately control or benefit from the entity enhances accountability and ethical conduct.

Compliance with Regulations
Complying with UAE laws that mandate the identification of UBOs
is crucial to adhere to regulatory requirements. It assists in compliance with anti-money laundering (AML) regulations, combating the financing of terrorism (CFT), and other legal obligations.

Effective Risk Management
It helps in assessing risks associated with a particular business relationship. Understanding the actual controlling parties enables organizations to make informed decisions and implement appropriate risk mitigation strategies.

Prevention of Illicit Activities
By identifying and verifying the UBO, businesses can mitigate the risk of being used for money laundering, fraud, or other illicit activities. This proactive approach aligns with the UAE’s commitment to combat financial crimes and maintain a clean and secure business environment.

Requirements for Disclosure

Maintenance of all the following registers at office premises:

• A Shareholder’s Register;
• A Register of Beneficial Owners; and
• A Register of Nominee Directors.

Deadline

At the time of incorporation/registration of a new entity. In case of any changes to such information relating to Real Beneficiary shall be updated within fifteen (15) days from the date of being aware thereof.

Administrative Sanctions
In case of a violation to the UBO regulations, the Minister of Economy or the authorized Licensing Authority shall impose sanction(s) from the list of administrative sanctions issued.

Applicability 

It is applicable to all businesses.

Non Applicability

Those companies wholly owned by a local or federal government body or are set up in the DIFC, or ADGM financial free zones are also exempted since they are subject to their own UBO disclosure requirements.

Contact Details:
Tel:- (O) : 06-5552785, 04-2659330
(M) : 050-6248402, 054-5309566
Email : contact@activeauditors.com
Website : www.activeauditors.com