The UAE has made significant progress at ramping up its fight against tax avoidance and money laundering as evidenced by the recent regulatory reforms. The government’s efforts to streamline the economy to match with international best practices gained global attention with the introduction of AML / CFT Law, Economic Substance Regulations (ESR) and most recently the Ultimate Beneficial Ownership (UBO) reform.
In line with this, the companies operating in Jebel Ali Free Zone (JAFZA) have been asked to submit the updated UBO information on or before 15 April 2021 as against the earlier deadline of 31st March 2021.
Declaring the UBO details to the relevant licensing authorities is one of the prominent requirements as per the AML / CFT Law and therefore the business owners should start submitting the UBO forms as early as possible. Business owners can consult with the best UBO consultants in Dubai, which is highly recommended to eliminate the risk of errors. In the meantime, this article will give you the necessary insights into the immediate actions to be taken to ensure UBO compliance in Dubai.
Identify the Real Beneficiary Owner of the Company
The first step of compliance starts with the identification of the ‘Real Beneficiary’ of your company. The Cabinet Resolution No. (58) 2020 on regulating UBO is your guidance here. The law defines the Real Beneficiary as the following:
- A natural person who ultimately owns, controls or has the right to vote with at least 25% shareholding in the company either directly or indirectly
- If natural persons don’t meet the above conditions, then the UBO can be any other natural person who exercises control over the company through other means like dismissal or appointment of managers
- If no natural persons satisfy both the conditions, then a natural person in charge of the senior management will be deemed as the UBO
Companies operating in JAFZA should identify their Real Beneficiary Owner by applying these rules as early as possible. Business owners who have difficulties in the process could consult with the best UBO consultants in Dubai for guidance.
Prepare & Maintain Real Beneficiary Register
As per the UBO law, you need to prepare and maintain a Real Beneficiary Register (RBR) that contains the details about the UBO such as,
- Full name, nationality, date and place of birth
- Place of residence, address to which notifications are to be sent
- Passport number or ID number with details such as country, date of issuance & expiry
- Date & basis on which the natural person became the UBO
- The date on which a natural person ceases to be the UBO
Prepare & Maintain Partners or Shareholders Register
In addition to the RBR, you are required to prepare and maintain a Partners or Shareholders Register (PSR) as well. The PSR should contain details such as,
- Number and class of shares owned by each of the partners or shareholders
- The date on which they become a partner or shareholder.
Companies can also notify the Registrar of any change or amendment to the details in the register within 15 days from the date of such change or amendment. In addition to this, the companies must designate a person with whom the Registrar can communicate about any disclosure.
Meet UBO Obligations If Company Shuts Down
If your company is undergoing liquidation, the official company liquidator is required to submit the Real Beneficiary Register and Partners or Shareholders Register to the Registrar within 30 days from the date of his appointment. Also, the administrators of the company or the liquidator are required to maintain the registers for a period of minimum at least five years from the date of liquidation. Failing to meet the UBO obligations will attract hefty consequences imposed by the government, even though the list of administrative penalties has not been announced to date.
We Can Help You Meet UBO Obligations
Companies operating in JAFZA free zone are required to submit the updated UBO declaration forms no later than 15 April 2021. Companies need to check whether they have properly identified the Real Beneficiary apart from preparing the RBR & PSR. Business owners may find it tough to properly update the UBO information in the register, which necessitates the assistance of the best UBO consultants in Dubai such as Jitendra Business Consultants (JBC).
JBC has a team of highly qualified business setup consultants and Chartered Accountants who will ensure that the entities are in full compliance with UBO laws in the UAE. JBC can train and guide the staff of the companies to maintain the Real Beneficiary Register (RBR) and Partners or Shareholders Register(PSR). JBC also helps the business owners in maintaining the registers on their behalf and provide secretarial services to maintain and update the registers on a regular basis and comply with the regulations at the time of incorporation, renewal, liquidation and making any amendments.