Talks on Ultimate Beneficial Ownership (UBO) of UAE companies are making headlines once again as the deadline for submitting the UBO details of Jebel Ali Free zone (JAFZA)is nearing ( 5th June 2021). And another reason, the UAE government has tightened its UBO regime as part of its efforts to combat money laundering and financing of terrorism. Recently, the UAE Ministry of Economy approved an action plan to identify ultimate beneficial owners of more than 400,000 companies registered in the country.
Now the UAE entities that are yet to create the mandatory UBO registers such as Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) must be on alert. The newly approved action plan may expose their non-compliance leading to hefty penalties (govt is yet to announce the penalty amount). In this background, it seems worthwhile to educate the investors and entrepreneurs about the importance of UBO registers in the UAE. Read on.
Real Beneficiary Register
As per article 8 of Cabinet Decision No 58 of 2020, companies in the UAE are required to maintain the data of the Beneficial Owner in a register of the real beneficial owner. The real beneficiary or ultimate beneficiary is a person who owns or controls directly or indirectly 25% of the capital. Or a person who is entitled to voting rights for at least 25% of the shares, or who exercises ultimate control over a ‘legal person’.
The law says the register should be created within 60 days from the promulgation of the law or the date on which the Legal Person comes into existence. The entity should also update and record any changes to the data contained in the Register of Beneficial Owner within 15 fifteen days of becoming aware of such change.
The Real Beneficiary Register (RBR) should contain the following data,
Full name, nationality, date and place of birth of the Real Beneficial Owner
Residential address or the address to which Authorities can send notices as per the clauses of the law
Number of passport or identity card, the country of issuance, date of issuance and expiry
Basis and date on which the person became a Beneficial Owner of the UAE entity
The date on which the person ceased to be a Beneficial Owner of the UAE entity
Register of Partners or Shareholders
Apart from the RBR, the UAE entities are also required to update and maintain a Partners or Shareholders Register (PSR). The PSR contains the data of the entity’s partners or shareholders. The entity is required to update and record any change to the Register within 15 days of becoming aware of such change. The Register of Partners and Shareholders shall include:
1. Number of shares held by each shareholder, their categories and associated voting rights
2. Date on which the partners or shareholders achieved that capacity in the UAE entity
3. In case of natural partners or shareholders: the full name as provided in the identity card or the passport, nationality, address, place of birth, name and address of employer and a true copy of the valid passport or ID
4. In case of corporate partners or shareholders: the data required as per Clause (1) of Article (4) the Cabinet Decision, that is :
a. Name, legal form and memorandum of association.
b. Head office address or the principal address of the business and, in case of a foreign Legal Person, the name and address of its legal representative in the State, with adequate proof
c. Articles of Association or any other similar documents approved by the Relevant Entity in the State
d. Names of the relevant persons who are holding higher management positions in the Legal Person, providing their data from their passports or identity cards, including such documents’ numbers, issuance and expiry dates and issuing entity
Nominee Board Members
As per Article 9 of the Cabinet Decision, No 58 of 2020, a manager or board member who acts as a Nominee Board Member must inform the Legal Person that he is a nominee board member and need to provide all the required data within 15 days of becoming a nominee board member. A nominee board member who achieved such status prior to the promulgation of the Cabinet Decision must inform the Legal Person of this fact within 30 days of the promulgation date of the Cabinet Decision.
A Nominee Board Member shall inform the Legal Person of any change to the data referred to in PSR within 15 days of making such change. The Nominee Board Member must inform the Legal Person that he ceased to be a nominee Board Member within 15 days of such cessation. The assistance of the best UBO consultants in the UAE will ensure that the entities are in compliance with the UBO law.
Should Companies under Liquidation Maintain the UBO Registers?
A company under liquidation should notify the Regulatory Authority about its Ultimate Beneficial Owner (UBO). The legal person, administrator and the liquidator are required to maintain the Real Beneficiary Register and Partners or Shareholders registers for at least five years from the date of liquidation. Talk to top UBO consultants in the UAE for consultation on maintaining the UBO registers while closing down a company.
How Can Jitendra Business Consultants Help you?
The UAE government introduced the requirement to maintain UBO Registers to enhance transparency. UBO Registers act as a catalyst in preventing money laundering and financing of terrorism. It will lead to positive effects in the economy such as reduction of corruption, fraud and will empower a wide range of businesses in their effort to carry effective due diligence. Maintaining the UBO registers may appear to be a complicated process for the businesses but the assistance of UBO consultants in Dubai such as Jitendra Business Consultants (JBC) will come in handy. We will prepare the RBR and PSR in compliance with the law and will help you maintain them.