The UAE Ministry of Economy has authorised licensing authorities across the country and in the non-financial free zones to begin implementing administrative penalties and fines against any companies that fail to submit ultimate beneficial ownership (UBO) information. The implementation of penalties for non-compliance will start as of 1 July 2021.
“All establishments registered in the UAE must create a register of the ultimate beneficiary and provide required data correctly before 30 June 2021, in accordance with Cabinet Resolution No. 53 of 2021 on administrative penalties against violating the ultimate beneficial owner procedures,” the ministry said.
Under the UBO Regulations, brought in last year by Cabinet Resolution No. 58/2020, all companies licensed and registered in the UAE – except those that are wholly owned by a local or federal government body, or those set up in the DIFC or ADGM financial free zones – are required to maintain registers with information about ultimate beneficial owners (UBOs), shareholders and any nominee board members.
The UBO is the natural person who, directly or indirectly, owns and controls a company. Individuals with ownership of at least 25% shares or voting rights of a company, or someone with the power to dismiss and appoint a majority of a company’s directors is considered as a UBO. If no natural person satisfies these criteria, the UBO is the natural person who exercises control over the company by other means. If no natural person satisfies both the conditions above, then the UBO is deemed to be a natural person who is responsible for the senior management of the company.
The UBO Register must include the following for each UBO:
- Full name, nationality, and date and place of birth.
- Place of residence or notice address.
- Passport or identification number, country, and date of issue and expiry.
- The basis on which the natural person is identified as a beneficiary.
- The date on which the person became a UBO, and if applicable, the date on which they ceased to be one.
The Shareholder/Partner Registers must include the following for each partner or shareholder:
- The number and class of shares/equity held, and the voting rights attached.
- The date on which the shareholder/partner acquired the shares/equity.
- For shareholders/partners that are natural persons, the same information is required as for UBOs.
- For shareholders/partners that are legal entities:
- Name, legal form, and memorandum/articles association.
- Address of main office or headquarters, and if the legal entity is foreign, the name and address of its legal representative in the UAE must be included.
- Names of the persons holding senior management positions (including their passport or identification number, country of issue, date of issue, expiry date).
Article 17 states that administrative penalties will be imposed upon such Mainland Companies and Non-Financial Free Zone Companies that are in breach of the UBO Regulations or do not submit their UBO information to corporate regulators. The Ministry of Economy will be imposing fines of up to AED100,000 on those companies that fail to submit their UBO information by 30 June 2021.
There are separate set of regulations that apply to companies incorporated in financial free zones of Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC).