Deadline looms for UAE companies to file 'Ultimate Beneficial Owner' details

First came the VAT, then Economic Substance Regulations (ESR), and now UBO (Ultimate Beneficial Owner) rules – the UAE now requires companies to stringently follow well-defined transparency procedures.

Owners of Jebel Ali Free Zone companies must file the UBO information with the authorities by March 31. Mainland companies (those with corporate shareholding) must file with the Department of Economic Development in Arabic, or else the trade license will not be renewed.

The Cabinet Resolution No. (58) 2020 on regulating UBO, which came into effect on August 24, 2020, requires all such information to be maintained in the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR), and to be made available to the public. This is as part of provisions included to counter money laundering crimes and combating the financing of terrorism.

Defining the 'real' 

The real beneficiary is deemed as the one who owns or controls directly or indirectly 25 per cent of the capital. Or has voting rights for at least 25 per cent of the shares, or who exercises ultimate control over a 'legal person'.

The companies incorporated after the resolution came into effect should report to the Registrar within 60 days of formation. In the Real Beneficiary Register, they must provide:

* Full name, nationality, date and place of birth;

* Place of residence, or address to which notifications are sent;

* Passport or ID number, country and date of issue and expiry;

* Basis and date on which he became a real beneficiary; and

* Date on which a person ceases to be a real beneficiary.

The Partners or Shareholders Register (PSR) require:

* Number and class of shares owned by each of the partners or shareholders;

* Date on which they become a partner or shareholder.

The 'legal person' shall submit any amendment or change to the details or information to the registrar within 15 days from the date of the amendment and change. And if the company is under liquidation, the liquidator shall hand over the Real Beneficiary Register and Partners or Shareholders Register to the Registrar within 30 days from the date of his appointment.

It doesn’t end here. The legal person, administrator and the liquidator shall maintain the registers for a period of at least five years from the date of liquidation. Although violators will not face financial penalties, they may face sanctions imposed by the UAE Ministry of Economy. The Ministry is yet to announce the list of administrative sanctions.