The UAE have made another step in their intense efforts to implement, and comply with, international transparency standards. Cabinet Resolution No. 58 of 2020 on the Regulation of the Procedures of the Real Beneficiary (“Resolution“) entered into effect on 28 August 2020.
The Resolution regulates the disclosure and registration requirements regarding all stakeholders in UAE mainland and free zone companies (except for DIFC and ADGM entities for which other rules apply). All these companies must keep and maintain at their premises a “Register of Ultimate Beneficial Owners”, a “Register of Partners or Shareholders” and a “Register of Nominee Directors and/or Managers” (“Registers“).
All information pertaining to Ultimate Beneficial Owners (UBO), shareholders and nominee Directors and/or Managers must be filed with the registrar and/or the licensing authorities. The companies have to take reasonable measures to file correct and up-to-date data including the supporting documents. The companies are obliged to appoint a UAE resident as contact person and forward these details as well to the Registrant.
The details of the required information and documentation requirements are published by the authorized authorities (e.g. RAKICC or RAKEZ). In respect of a natural person the following information is required:
- full name;
- date of birth;
- residential and home country address;
- country of residence;
- nationality (including all nationalities held);
- passport number (copy of passport will be required);
- the date on which that person became a beneficial owner; and
- the grounds on which that person is considered to be a beneficial owner.
All licensed and registered companies in the UAE are obliged to file and to update the Registers and to reflect all the changes, with the relevant registrar and/or licensing authorities responsible for the supervision these Registers.
An UBO is an individual who:
- owns or controls more than 25% of the shares or voting rights;
- ultimately owns or controls whether directly or indirectly more than 25% of the shares or voting rights in the company; or
- hold the rights to appoint or remove a majority of the directors/managers.
If no natural persons fulfil the description of an UBO, then any natural person who exercises control over the company through other means shall be deemed as the UBO. If no natural person is able to fulfil both of the conditions, then a natural person, who is responsible for the management of the company in questions, will be considered as the UBO.
In case of a corporate owner, the UBO will be the individual, who controls the company.
For the Partner and Shareholder Register the number of ownership interests held by each partner or shareholder and the voting rights attached to such ownership interests and the date of acquisition of ownership interests. If the Partner and Shareholder a corporate owner, the information, for the register, about these companies should include their constitutional documents, address and details of their senior management.
Additional information requested by the registrant has to be provided within the specific deadline set by the authorized registrar.
The deadline for the Registers is either (i) sixty (60) days from the date of publication of the decision (e.g. 27 October 2020) or (ii) at the time of incorporation of a new entity. Changes to the information of the Registers have to be updated within 15 (fifteen) days.
The Registers are subject to the provisions of the regulatory laws, information obtained by the registrar (i) under these regulations or any other enactment; of (ii) in connection with carrying out of any of the registrar’s functions, and only be disclosed in accordance with these regulations. Nevertheless, any person may request from the registrar, on payment of a fee to the registrar and register, to get the disclosed information about the company, by prior written consent of the company concerned.
Any case of a violation to the provisions of this Decision to keep the records at the head office or failure to report can result in the Minister of Economy or the Licensing Authority imposing one or more sanctions. The list of administrative sanctions is yet to be issued. The authorized authorities can issue a fine against the company which starts with AED 1,000 up to AED 20,000, depending on the violation.