The United Arab of Emirates replaced Cabinet Resolution No. 34 of 2020 to Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures (the “Resolution”). The Resolution covers the most updated requirements for the entities in UAE to disclose its Real beneficiary Data or Ultimate Beneficial Owners which intends to enhance transparency of the UAE registered entities. It likewise intends to develop effective and sustainable executive and regulatory mechanisms and procedures in respect of beneficial owner data and improve implementation to ensure International Compliance and global confidence.
The Ultimate Beneficial Owner’s (UBO’s) objectives cover the maintenance of the economic position of UAE with international requirements. It also aims to regulate minimum obligations in disclosure of Real Beneficial Owners, Shareholders, Partners and Nominee Board Members, and lastly, to establish an effective regulatory mechanism and procedure for the Ultimate beneficial owner data. It aims to control Money Laundering and Terrorist financing.
As per Ministry of Economy (MoE), approximately 513000 targeted establishments, regulated by 38 licensing authorities all over the UAE are required to provide data on ultimate beneficial owners. Including all Licensed by the local licensing authorities and the non-financial free zones.
Ultimate Beneficial Owner Rule
As per Cabinet Resolution No. (58) of 2020, Beneficial Owner or Real Beneficiaries can be the following:
On the other hand, there are entities which are exempted with this resolution. They are as follows: (a) the companies in financial free zones like Abu Dhabi Gold Markets and Dubai International Financial Centre, and (b) the companies which are directly or indirectly owned or affiliated by the Federal or Emirate Government.
Entities will need to assess who constitutes a UBO and consider whether anyone is a nominee Director / Manager. The Register of Shareholders / Partners is not a new concept as this is a requirement outlined in the UAE Commercial Companies Law, as well as in respective Free Zone Companies Regulations. Although the Resolution requires additional information to be detailed (for example, voting rights).
As per Cabinet Resolution No. (58) of 2020, all Relevant Entities must perform the following:
If entities failed to comply with the Resolution, the UAE Ministry of Economy has announced major penalties for non-compliance to be imposed.
However, it has been assured by the ministry that, any data submitted will be kept with utmost confidentiality with no access to anyone for any commercial purposes including the employees of the entity itself, except in case of an investigation and the required disclosure to specific official entities, according to the strict internal policies and Regulations.