Overview of UBO Declaration in the UAE
In recent years, the UAE government has implemented stronger measures to combat money laundering and terrorist financing. One of the key regulations is Cabinet Decision No. 58 of 2020 regarding the Regulation of Procedures of the Real Beneficiary. This decision mandates that all companies registered in the UAE, including those in free zones and the mainland, maintain a register of their Ultimate Beneficial Owner (UBO) and submit it to the relevant authorities. This requirement has become a crucial part of the license application or company incorporation process, both on the mainland and in free zones.
The main goal of this regulation is to increase transparency within the UAE’s economic framework through improved disclosure and record-keeping requirements for companies. The UBO regulations ensure that companies pay careful attention to their ownership structure to avoid non-compliance with anti-money laundering and anti-terrorism financing laws.
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Ultimate Beneficial Owner (UBO) Disclosure in the UAE
The Resolution requires companies licensed in the UAE (unless exempted) to prepare and submit the following registers within 60 days from the date of the Resolution (October 27, 2020) or by the company’s establishment date:
- Ultimate Beneficial Owner (UBO) Register
- Nominee Director Register (if applicable)
- Partners or Shareholders Register
While certain free zones have already implemented rules for UBO filing, further guidance is expected from other free zones and the Department of Economic Development (DED) for onshore entities.
UBO Register
The UBO Register must include details of the company’s Real Beneficiaries, defined by the UBO Law as natural persons who:
- Own or control at least 25% of the company’s share capital.
- Hold at least 25% of the voting rights.
- Control the company via other means, such as the right to appoint or dismiss the majority of directors or managers.
UBO Exemptions
Certain entities are exempt from UBO filing requirements, including:
- Companies listed on regulated stock exchanges and their subsidiaries.
- Companies wholly owned by a local or federal government body.
- Companies established in the DIFC or ADGM financial free zones.
These entities are subject to their own UBO disclosure regulations.
UBO Law Offenses and Penalties
Companies that fail to comply with UBO regulations may face significant penalties. Violations could result in fines for the company, company officers, beneficiaries, and shareholders. Penalties may include:
- Fines for non-compliance with UBO Law obligations.
- Sanctions for failure to maintain or submit accurate UBO registers.
Why Choose Smart Business Creation for UBO Compliance?
The new UBO regulations require companies in the UAE to maintain and submit UBO registers to the appropriate authorities. As a leading business setup consultant in Dubai, Smart Business Creation helps businesses comply with these regulations. Our consultants will assess your company’s ownership structure, prepare the necessary registers, and handle the filing process with the relevant authorities.
Our Services Include:
- Maintaining UBO and related registers.
- Avoiding fines and penalties.
- Ensuring full regulatory compliance.
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Expertise
We help you maintain UBO and allied registers, making any necessary amendments or updates to comply with the regulations.
Ease
We ensure that our clients remain compliant with UBO regulations, both during the business setup process and afterward.
Clarity
We help our clients avoid fines and penalties associated with UBO violations, ensuring a smooth and compliant business operation in the UAE.
