UBO Compliances

Expert UBO Compliance Advice

ubo compliances dubai

What is UBO or Ultimate Beneficial Owner

UBOs are natural persons who own and control companies directly or indirectly. A UBO is anyone with more than 25% ownership or voting power in a company, as well as those who are able to dismiss or appoint a majority of the company’s directors.

The UAE government had passed a Cabinet resolution in this regard. This resolution aims to increase corporate transparency by regulating Ultimate Beneficial Owner Procedures. The resolution covers UBO guidelines for new companies and existing companies. All UAE mainland and free zone legal entities will be affected by the resolution (with a few exceptions). This resolution focuses on the requirement to prepare and maintain an Ultimate Beneficial Ownership (UBO) register. 

The register must always be readily accessible at an entity’s office. A copy of the register must also be filed with the relevant authorities, and any modifications must be reported to the authorities. This declaration was made to reduce the risk of monetary fraud at the corporate level. Financial and economic crimes can be committed by unregulated entities that are harmful to the business climate of a country. Financial crimes, fraud, and money laundering are reduced as a result. It increases transparency at a corporate level. 

Keeping a beneficial ownership register has become a legal and obligatory requirement, we undertake the hardships behind this on your behalf and simplify the procedures as we are expertised in the field and make your registration process on time and accuracy.

Who is Identified as UBOs?

  1. A company’s UBO shall be the person who owns and controls it directly or indirectly, according to the resolution. Individuals who own at least 25% of a company’s shares and have the power to choose and dismiss a majority of its directors are considered UBOs.
  2. The UBO is someone who has control over a company through other means. If no natural person meets these conditions.
  3. In the absence of a natural person who meets the conditions in the first two points, the UBO is an individual who works at the company in a managerial position.
  4. If multiple people meet the criteria for identifying a UBO  (e.g. 25% of voting rights are shared by more than one individual) then they will all be considered joint owners of equal status.

A company’s UBO can be identified through any arrangement, according to the resolution. It is essential that a company always maintains an updated record of a UBO’s details once a UBO has been identified.

Under the resolution, all UAE-licensed entities must declare their UBO. Exceptions are as follows: 

  • Free-zone legal entities (Dubai International Financial Center and Abu Dhabi Global Markets)
  • Entities that are either directly or indirectly owned by the Emirate or federal government.

The resolution does not require free-zoned entities to declare their UBO. Contact your desired free zone’s client relations team to learn more about the UBO declaration.

Inherent Responsibility of Entities

  • Companies are expected to provide accurate information at the time of their registration and licensing.
  • All documents should include the official address of a company in the Emirates and its trade name.
  • An organization should inform all of its beneficial owners if it doubts who is the real beneficiary.
  • Following the identification and declaration of the UBO, companies must provide relevant details in the UBO register. The register must be kept current. Within 15 days of becoming aware of a change, a company should amend the register.
  • UBO data should be provided by companies (and other requirements of the resolution) within 60 days after passage of cabinet resolution 58. Or before completing  60 days after a company is registered and licensed.
  • The same should be intimated to the registrar and if required an authorized person should be provided information whenever required.
  • Should there be any changes other than what is shared with the registrar, the registrar should be made aware of the changes within 15 days of implementing the changes.

Any change of ownership of a business must be notified to the Registrar within 15 days of the change.

 If the details are submitted when the company is incorporated, subsequent compliance would happen only after UBO changes as UBO is once-off compliance.  At present, offshore companies are not exempted from compliance requirements and must adhere to them as well.

The failure to comply with this law will have consequences for legal entities. Sanctions will be imposed by the Ministry of Economy. Following the issuance of sanctions, the legal entity will have the opportunity to appeal and have the sanctions lifted following the appeal process.

However, professional help from an expert like us can simplify the UBO registration process. We can ensure that you meet all requirements timely without your head whirling.

How We Can Help You

  • We provide you with the guidance you need based on our expertise and manpower. In order to register with your authorities, we will assist you by collecting and verifying the initial information you need.
  • The collected data can then be arranged and compiled according to the guidelines provided by the authorities. Your registration submission is free of errors and in accordance with the resolution.
  • The registration process often requires entities to provide more information than they initially expected. Whenever you need additional data, we will help you prepare it quickly and efficiently.
  • A change to the data that an entity provides in its registers must be reported to the authorities. When an update is required to be provided to the authorities, we can monitor all data changes and act swiftly and intimate the authorities within the stipulated 15 days.
  • The authorities should be informed of any changes to your UBO. We can guide you through this process and ensure that you follow the law in deregistering.
  • We ensure ultimate confidentiality of all the data shared with us complying with the data confidentiality clauses of Cabinet Resolution 58/2020’s Article (15) clauses 1-2).