FAQs On UBO

UBO means Ultimate Beneficial Owner.  

The Cabinet Resolution No. (58) of 2020 Regulating the Beneficial Owner Procedures is the key regulation for UBO in UAE. It replaces the Cabinet Decision No. (34) of 2020 concerning Regulating the Beneficial Owner Procedures.  

This regulation is in line with Cabinet Decision No. (10) of 2019 on the Executive Regulations of Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations, as well as Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations.  

Most of the countries have legislation related to UBOs. The aim is to identify any illegality in the business. This is as per the requirements of regulations related to money laundering, Know Your Customers (KYC), bribery, corruption, and terrorism financing.  

By identifying the UBO, the government, regulatory authorities, and other businesses intending to do business with an entity know about the entity. Thus, the main objective behind UBO requirements is to safeguard oneself from engaging in business with an entity that conducts criminal activities. You know who your business partner or client is and what are its business activities, which is of utmost importance.  

With these regulations in place in UAE, companies will focus on their ownership structure to keep it legal and comply with anti-money laundering and anti-terrorism financing laws. With improvements in record-keeping and disclosure by companies, you can expect more transparency in the economic framework of the country.  

As per the Cabinet Resolution No. 58 of 2020 Regulating Beneficial Owner Procedures, entities licensed in UAE (excluding exempted entities) must prepare and file the following: 

• Beneficial Owner register 
• Nominee Director register 
• Partners or Shareholders Register 

A legal person registered or licensed in UAE to conduct operations, excluding the ones exempted by the Cabinet Resolution No. 58 of 2020, is required to comply with UBO requirements in UAE.

The process of identifying the UBO of an entity is as follows: 

• Step 1: Check whether the entity is registered and licensed in UAE. Check the accuracy and legality of all the information related to its license. You need to check the entity name, address, registration number, names and identities of top management, and official status.  
• Step 2: Now, you must conduct thorough research on the ownership chain of the entity. Identify all the beneficial owners holding shares in the entity. Check whether the owner is a natural or legal person and whether the ownership is direct or indirect.  

• Step 3: Now, compare all the owners for the shareholding percentage or management control of the entity. You will get to know the ultimate beneficial owner who holds the highest interest or share in the entity.  
• Step 4: Since you have identified the UBO, now you can conduct a KYC check of the UBO/s to categorize them into risk categories of low, medium, or high

An authorized signatory of an entity must include the following details in the UBO declaration form: 

• Company name 
• License number 
• Beneficiary ownership details, including company name, registered office address, and percentage of shares in the company 
• Ultimate beneficial ownership details for every UBO, including: 
• Full name 
• Company 
• Date of birth 
• Nationality 
• Identity card or passport along with its country and date of issuance and expiry 
• Residential address or the address to which notices will be sent 
• Percentage of share in the company 
• The date on which the person became a UBO and the basis 
• Publicly listed companies can list the details of the stock exchange or government authority that is responsible for the trading of their shares. Trust Companies must provide details of their Owner(s), Beneficiary/Beneficiaries, and settlors that own more than 25% of the legal entity. 
• In the case of entities in offshore jurisdictions, entities must submit the following documents as proof of UBO: 
• Share certificates 
• Registry extract 
• Memorandum and Articles of Association 
• Confirmation from an auditor, lawyer or government authority 

Any changes in any of the details in the form must be submitted to the relevant regulatory authority within 15 days of the change coming into being.  

The legal person must include the following data and information in respect of each of its partners or shareholders: 

• The date on which the shareholder or partner acquired that status in the legal person 
• Number of shares held by each, associated voting rights, and categories 
• Details of full name, address, nationality, date of birth, and place of birth as per the identity card or the passport as well as name and address of employer along with a true copy of the identity card or passport, in case of natural shareholders or partners 
• If the shareholders or partners are corporate, the details to be submitted are the same as in the Register of Beneficial Owners. 
• If any partner/s or shareholder/s acts as a Trustor or Nominee Board Member, the legal person must include this data. 

• Data of persons represented by any Trustee or Nominee Board Member must also be included in this Register.

The Register of Beneficial Owners includes the following information: 

• Full name, nationality, date, and place of birth 
• Address of the residence or the place where notices can be sent 
• Number of identity card or passport along with the date of issuance and expiry and country of issuance 
• The date on which the individual became a beneficial owner and the basis of this 
• The date on which the individual ceases to be a beneficial owner 

When a board member or manager becomes a nominee board member, he or she shall inform the same to the legal person within 15 days of becoming the same. The nominee shall provide all the relevant data along with this.  

If there is any change in the data, then the nominee board member must inform the same to the legal person within 15 days of the change. Also, when he or she ceases to be a nominee board member, the notification for the same must be sent to the legal person within 15 days.  

Legal persons are expected to do the following: 

• They must provide all the required details at the time of licensing and registration in the specific form: 
• Name and legal form of the entity 
• Memorandum of Association and Article of Association 
• Head office address or principal address of the entity  
• In the case of a foreign legal person, the name of the legal representative in UAE, address, and identity proof 
• Names of individuals holding higher management positions in the legal person along with details of identity cards or passports, including number, issuing entity, issuing date, and expiry date 
• They must mention the trade name and address in UAE as that will be used for all kinds of correspondences and documents. 
• They must issue notices to all beneficial owners when there is confusion about who the UBO is 
• They must provide required details on the Register of UBOs, maintain it, and update it within 15 days whenever any changes come. 
• They must provide required details on the Register of partners or shareholders, maintain it, and update it within 15 days whenever any changes come. 
• They must provide required details on the Register of directors and nominee directors, maintain it, and update it whenever changes occur. 
• Provide the data on these registers to the Registrar as and when requested and disclose the same with personnel or authorized agents. 
• If there is any change in the data filed with the Registrar, they must notify the Registrar within 15 days of the date of the amendment. 

If an entity successfully complies with UBO regulations, it receives a UBO certificate. The certificate serves as proof that the entity has confirmed its UBO, and it maintains a register on its beneficial owners and other required information.  

Yes. If a beneficial owner’s details are not recorded adequately with the legal person in the Register of Beneficial Owners, then the legal person can inquire from the owner about the details. The beneficial owner is required to submit the required missing information. 

If the beneficial owner fails to respond to the legal person within 15 days of receiving the inquiry, the latter can notify the owner. The notice must mention the following: 

• Mention that the notice is in regards to the UBO decision 
• Mention whatever details the legal person has on the beneficial owner in the Register and ask the missing details to be sent by the owner 
• Ask the beneficial owner whether he/she has ownership in the legal person, correct the data sent, and fill in the missing data. 

The beneficial owner must respond to the notice within 15 days of receiving it. If the legal person does not receive the response, it can enter the notified data in the Register. In this case, the legal person must inform the relevant person of including that information within 15 days of inclusion.

If a natural person finds his/her name or details in the Register of Beneficial Owners, then he/she can apply to the Competent Court to rectify the Register in the following cases: 

• The name of the person is missing from the Register without sufficient cause 
• The name of the person is entered into the Register without sufficient cause 
• If a change has occurred in the person’s status as a beneficial owner 
• If there are errors in the details mentioned in the Register

No, you have to fill out the form and maintain the required registers. There are no fees or charges for UBO declarations.  

Yes, whenever any changes come in the details of beneficial owners, the legal person must update the change within 15 days of the change coming into being.  

The legal person must start recording and maintaining the Register of beneficial owners within 60 days of its existence. The legal person must record the changes in beneficial ownership in the Register within 15 days of becoming aware of the change.  

The legal person must submit the details in the Register of Beneficial Owners and Register of Shareholders or Partners to the Registrar within 60 days of the date of its registration or licensing.   

When the legal person issues shares in the name of persons or board members, it must disclose these details to the Registrar within 15 days of such issuance. The details must include the identity of these persons or board members and the shareholding percentage.  

The legal person must authorize a natural person residing in UAE to handle the responsibility of disclosing the relevant details of Registers to the Registrar. The legal person must provide the details of this natural person to the Registrar, including name, contact number, address, and a copy of identity card or passport.  

If the legal person is in the process of dissolution or liquidation, the liquidator is responsible to furnish the details to the Registrar. The liquidator must submit a copy of both the Registers to the Registrar within 30 days of his/her appointment as the liquidator.  

Also, the liquidator or the legal person or the management, or anyone responsible for the entity’s dissolution is responsible for maintaining these Registers for five years from the date of liquidation, dissolution, or de-registration.  

The Registrar has the following powers: 

• The Registrar can make copies of the documents provided by the legal person. 
• If the documents or data are not provided, the Registrar can ask the legal person or its authorized personnel or agents to submit the same at the time and place mentioned by the Registrar and answer relevant questions.  

The Registrar sends a written notice to the legal person mentioning the time and place of submission of documents and data.  

In respect of international cooperation, the Ministry can do the following: 

• Provide access to foreign authorities to the basic information mentioned in these Registers of the legal person 
• Exchange data of shareholders, UBOs, or partners of the legal person 
• Obtain all the beneficial owner data from its counterpart foreign entities on related entities of the legal person by exercising its powers 

Yes, legal persons can appeal against the sanctions within 30 days of receiving the notification. The appeal must happen before a committee is formed. The Committee must decide on the appeal within 30 days from its submission date.