UAE Cabinet of Ministers issued a new Resolution #58 dated 28th August 2020 to regulate the procedure of a Real Beneficiary for a Corporate Entity. The objective of the Resolution is to set a procedure for Reporting and Registration of the Ultimate Beneficiaries Owners (UBOs), Beneficial Interest, and shadow directors in the UAE companies, including Mainland and Free zone companies except entities incorporated in DIFC, ADGM and fully or partially owned by UAE Govt.
Key Take Away
1) Timeline
The in-scope entities must report to DED or respective Authority on or before Oct 27th, 2020 on Beneficial Owners, their Interest, and other required details like:
a)Shareholder’s Register
b)Register of Beneficial Owners
c)Register of Nominee Directors
Companies are not only required to maintain the above information but also have to file such information to the respective authority within 60 days of the date of issuance of this Resolution (Oct 27th, 2020) or within the 60 days of incorporation.‎
2) Scope of the Resolution
The Resolution applies to all UAE companies incorporated in the mainland (DED) and in Free Zone except for the companies registered in Financial Free Zone like DIFC and ADGM and the companies owned by the Federal or Local Govt or their subsidiaries. ‎
3) What & who is Beneficial Owner
a) A Beneficial Owner is a Natural Person who ultimately owns or controls or has the right to vote over at least 25% of the shareholding of the company whether directly or indirectly through a chain of ownership or control, who has the right to appoint or remove the majority of the directors of the company.
b) Where no such natural person is identified or where there is doubt whether a natural person is exercising ultimate control, the natural person who otherwise controls the company is considered as the ultimate beneficial owner of the company.
c) IF no such individual has been identified, the natural person holding the senior management position will be considered its Ultimate Beneficial Owner.‎
4) What is Required
The companies need to maintain at their premises a Register of Shareholders’ Register, a register of beneficial owners and nominee directors before Oct 27th, 2020. The companies need to file with their respective regulatory authority such information as mentioned above.‎
5) What is Required on an Ongoing Basis
Aside from maintaining the required details and registers at their premises, the companies are under obligation to notify the respective authority within 15 days of any change in Beneficial Ownership or nominee directors.
The companies are also obligated to designate an individual who can be in connection with regulatory authorities regarding the UBO resolution and related affairs.‎
6) Impact on Listed Companies
Companies that are listed in regulated stock exchanges or companies that are owned by these listed companies may rely on the disclosures made to the relevant stock exchange rather than making independent inquiries as to the beneficial ownership.‎
7) Why Resolution Issued
UAE issued the said Resolution in a continuance of the Anti-Money Laundering law no 8 of 2018. The law requires disclosure of any individual ownership in an incorporated entity, owning 25% or more in that entity.‎
8) Penalties
Companies under non-compliance may face administrative penalties, to be communicated later.‎
9) Disclaimer
This article is intended for information purposes only; it is not a legal opinion or advice. For proper advice and consultation, please contact Bens Chartered Accountants:
Mr. Mian Ehsan
Partner
Compliance & Advisory
mek@bensauditors.com
+971 50 625 6414
Mr. Nasir Jamal
Partner
Audit, Tax, and Operations
nasir@bensauditors.com
+971 52 861 9076
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