The UAE is structured to promote business, creating a secure, well-regulated environment that attracts companies from around the globe. UAE government has been introducing new regulations to facilitate entrepreneurs and part of this chain.
On August 28, 2020, the UAE government issued Cabinet Resolution 58, replacing Cabinet Resolution 34. This resolution aims to enhance corporate transparency by regulating Ultimate Beneficial Owner (UBO) procedures.
In this article, we shed light on the concept of the UBO and its significance for your business in the UAE. Here, you will get the complete information about UBO regulations and UBO exceptions.
To ensure compliance in filing the UBO process and secure your business from penalties, expert guidance is the most suitable option. The experts at Now Consultant offer comprehensive UBO Consulting services covering all aspects of UBO compliance.
What is the Ultimate Beneficial Owner (UBO)?
Ultimate Beneficial Owner (UBO) regulations aim to improve financial transparency in business ownership, targeting more effective prevention of money laundering and terrorist financing. The UBO regulations include guidelines for new and existing businesses on UBO requirements.
UBO Identification In Dubai, UAE:
The new rules for UBO are relatively straightforward to comply with and facilitate entrepreneurs and businesses in the UAE when all requirements are met. It includes guidelines for both new and existing companies on UBO requirements. The resolution applies to all legal entities registered in the UAE mainland and free zones, with a few exceptions.
Why UBO is Important?
The Ultimate Beneficial Ownership regulations in the UAE have great importance as they aim to enhance transparency. By doing so, they contribute to the reduction of tax evasion, money laundering, and other forms of criminal activity.
Furthermore, strengthening the regulatory framework will help the UAE attract more global businesses, aligning the country with best-practice standards. This effort reinforces the UAE’s position as a leading global business hub.
New UBO Regulations For Companies In UAE:
The UBO regulations were implemented in October 2020, allowing businesses a 60-day gap to establish a process for filing their UBO information. However, determining their UBO is the responsibility of each company.
UBO is an individual or entity that owns or controls about one-fourth of a company’s shares or voting rights. This person or party also benefits from the company’s transactions. The ownership or control can be either direct or indirect. Cabinet Resolution 58 has established clear application guidelines that all applicable entities must follow:
- The resolution defines the Ultimate Beneficial Owner as an individual who directly or indirectly owns or controls a company. This includes any individual who holds at least 25% of the company’s shares and voting rights or has the authority to appoint or remove the majority of the company’s directors.
- If no individual meets the specified conditions as provided in first point, the Ultimate Beneficial Owner will be the person who exercises control over the company through other means.
- If no individual satisfies the criteria mentioned in the first two points, the Ultimate Beneficial Owner will be the person holding a higher management position within the company.
- If multiple individuals meet the criteria for identifying a UBO (Ultimate Beneficial Owner), then all such individuals will be considered joint owners of that share.
The above-said resolution makes it clear that any type of arrangement can be used to identify a company’s Ultimate Beneficial Owner. This allows companies to seek support from various legal entities and third parties, such as the UBO filing experts at Now Consultant.
Importantly, once a UBO is identified, the company must maintain an up-to-date record of the UBO’s details at all times.
Failure to comply with UBO regulations can result in fines or other penalties imposed by the UAE Ministry of Economy.
UBO Exceptions:
The UBO regulations do not apply to companies completely owned, either directly or indirectly, by the federal or local government or their subsidiaries. Similarly, those companies that are registered in the UAE’s Financial Free Zones (Abu Dhabi Global Market and the Dubai International Financial Centre) are excluded from UBO regulations.
How Can We Help You?
Now Consultant offers expertise in assisting businesses with UBO compliance. Our team ensures accurate and reliable data verification and declaration, which is mandatory for UBO registration.
We provide comprehensive support, from initial data collection to error-free submission, following the regulatory guidelines of UBO.
Experts at Now Consultant support companies in establishing the UBO registration process smoothly and meeting all requirements on time. Our commitment to confidentiality and compliance ensures peace of mind for our clients, safeguarding their sensitive information throughout the process.
FAQs:
What Is The Deadline For UBO Compliance?
The last deadline for UBO compliance was June 30, 2022. You will be given the deadline for UBO compliance when you start the registration process with UBO.
Are There Penalties For Non-compliance With UBO Regulations?
Yes, companies that fail to comply with UBO regulations may face fines of up to AED 100,000. This is in accordance with the Cabinet Resolution No 58/2020 (“UBO Regulations”) issued by the Federal Cabinet.
What Are The Reporting Requirements For UBOs In The UAE?
Companies incorporated and registered after October 27, 2020, must prepare a UBO Register by their establishment date. They are required to file this register with the relevant licensing authority within 60 days of their establishment.
