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What you need to know now
The 2020 declaration announcement has been overtaken by Cabinet Decision 109 of 2023. Beneficial ownership must be traced through ownership and control.
The original article is preserved below as a historical record. Earlier deadlines, rates, offers and approval statements should not be used as current guidance.
- TheoldOctober 2020 deadline is historical.
- A legal shareholder may differ from the ultimate controlling individual.
- Keep ownership and nominee information current.
Trace control through the full ownership structure
Begin with the company’s direct shareholders and work through corporate owners until the relevant natural people and control arrangements are understood. A register entry naming only an intermediate holding company may not answer the beneficial ownership question. Review voting rights, agreements and rights to appoint or remove directors where relevant. If no simple ownership conclusion is available, apply the applicable legal tests and seek guidance rather than selecting a person merely because their name is easiest to obtain.
Keep a clear supporting file
Prepare an ownership chart that identifies the companies and natural people in the chain, together with the records supporting each link. Keep the evidence consistent with the company’s shareholder information and current constitutional documents. Record how management reached its conclusion and identify any uncertainty that requires clarification. Supporting identity and address information should be handled securely and supplied through the registrar’s required channel; a public website or general enquiry form is not an appropriate place to publish personal documents.
Build changes into the corporate workflow
Beneficial ownership review should accompany relevant share transfers, restructurings and changes in control rights. Assign responsibility for telling the person maintaining the register when a change occurs. The current reference identified for the procedures, Cabinet Decision 109 of 2023, includes a requirement to report changes to the registrar within 15 days. Keep the date of the change, the evidence reviewed and the submission acknowledgement so that a later check can trace the update to the underlying corporate event.
Distinguish registrar reporting from other checks
A bank, auditor or other professional may request ownership information for its own customer due diligence. Those requests can overlap with the information in the company’s beneficial ownership file, but satisfying one request does not automatically complete a registrar declaration. Check the purpose and recipient each time. Use the registrar’s current forms and instructions, and review whether any exclusions or special rules apply to the actual entity. The expired initial deadlines in the historical article should not be reused as current filing dates.
YOUR NEXT STEPS
A practical way forward
- 01
Step 1
Map the ownership chain to natural persons.
- 02
Step 2
Review control arrangements and applicable exclusions.
- 03
Step 3
Update the registrar filing and supporting registers.
CLEAR ANSWERS
Frequently asked questions
Is checking only the first shareholder enough?
No. Trace ultimate ownership and control.
Is the 2020 decision the only current reference?
No. Use the 2023 decision and applicable registrar requirements.
Read the original article First published 25 October 2020 · retained for context
This earlier article is preserved for context. Its rates, deadlines, approvals and announcements may have been superseded. Use the current guidance and official references on this page for your next step.
Ultimate Beneficial Owner (UBO) Declaration
Ultimate Beneficial Owner (UBO) Declaration: On 24 August 2020, the UAE Cabinet published Cabinet Decision No. 58/2020 on the Regulation of Procedures Related to Real Beneficiaries.
The Resolution introduces new requirements for entities to disclose its beneficial owners which is intended to enhance transparency of the UAE registered entities. These requirements help to develop effective and sustainable executive and regulatory mechanisms and procedures in respect of beneficial owner data.
The New Cabinet Decision mandates that companies licensed to carry on business in the UAE maintain a Register of Partners (or Shareholders) and a Register of “Real Beneficial Owners”.
A Real Beneficial Owner is defined as the individual that ultimately controls the licensee, whether directly or indirectly, through at least 25% of the capital.
- The Resolution requires entities licensed in the UAE (unless exempted) to prepare and file Ultimate Beneficial Owner (UBO) register,
- Nominee Director register (if applicable) and a
- Partners or Shareholders register, with the relevant authority
Filing should be done within sixty (60) days from the date the Resolution came into effect, being October 27, 2020, or by the date the entity is established.
[Whilst certain Free Zones (DDA and DMCC) have already implemented rules and processes to file UBO data, further guidance from a number of other Free Zone authorities and the Department of Economic Development (for onshore entities) is expected in relation to the filing process].
Exemptions:
- Companies in financial free zones (Abu Dhabi Global Markets and Dubai International Financial Centre).
- Companies which are directly or indirectly wholly owned by Federal or Emirate government.
Register of Ultimate Beneficial Owner (UBO)
- UBOs are natural persons who ultimately own or control or have the right to vote with minimum 25% shareholding of the company, whether through direct or indirect ownership or who have the right to appoint or dismiss the majority of the Directors / Managers.
- If no natural person satisfies the condition above, then any natural person who exercises control over the company through other means shall be deemed as the UBO.
- If no natural person satisfies both conditions above, then a natural person who is responsible for the senior management of the company will be deemed as the UBO.
Register of Nominee Director / Manager
- Details of Directors / Managers acting in accordance with the instructions of another person.
Register of Partner / Shareholder
- The number of ownership interests held by each Partner or Shareholder and the voting rights attached to such ownership interests and the date of acquisition of ownership interests.
Entities will need to assess who constitutes a Ultimate Beneficial Owner (UBO)(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]. The current Resolution requires additional information to be detailed (for example, voting rights).
Entities must notify the relevant authority of any change or amendment to the information provided within fifteen (15) days of such change or amendment.
If entities do not comply with the Resolution, the UAE Ministry of Economy may impose sanctions on those entities. The list of administrative sanctions is yet to be issued.
Synopsis
- All entities in the UAE (unless excluded by the Resolution) must prepare registers of UBOs, Shareholders (Partners) and Nominee Directors by 27 October 2020.
- The registers of UBOs and Partners / Shareholder and Nominee Directors are to be filed with the relevant authority by 27 October 2020. Although the filing mechanisms for onshore entities and certain Free Zones have yet to be confirmed.
- Entities must notify the relevant Registrar of any change or amendment to the information provided within 15 days of such change or amendment
- Prepare registers of the UBOs, Partners / Shareholders and Nominee Directors / Managers (if applicable), in accordance with the Resolution.
- Arrange filing with the authorities.
- Maintain the relevant registers on a dedicated company secretarial database on an ongoing basis.
- Inform the relevant authority of any changes or amendments to the information provided.
Ultimate Beneficial Owner (UBO), the New Cabinet Decision reflects a continued drive towards more transparency and cooperation both within the UAE and internationally by introducing provisions allowing for the exchange of information on Real Beneficial Owners.
VERIFY THE DETAIL
Official sources & further reading
- Ministry of Economy — Cabinet Decision 109 of 2023
- Cabinet Decision 109 of 2023: changes to information (Article 15)
Source checks support this general guide. Your treatment depends on the facts, tax period and applicable legislation.
