Key Highlights on Ultimate Beneficial Ownership Regulations in UAE

UAE has been providing multiple opportunities to the businesses, enabling them to prosper and achieve their goals, but along with that comes the responsibility of the businesses to stay compliant with the regulations and to ensure transparency. For the businesses in the UAE, there might be many regulations that must be complied with in order to avoid any penalties or legal proceedings. One such regulation is UBO, which the businesses must comply with, as it enhances the credibility of the business and provides more transparency. In this blog, the key highlights related to the UBO regulations have been included, as there are many business entities that are still not compliant with the UBO regulations and not aware of the framework pertaining to it.

Who is a UBO in the UAE?

For the businesses operating in the UAE, an ultimate business owner might be a person who might be controlling or owning the business either directly or indirectly through any direct shareholder or any intermediaries or anyone who might be having significant influence and control over the company.

As per the UAE regulations, all businesses, irrespective of whether it is in the Mainland or in the Freezone must report its UBO and provide the report regarding such UBO to the concerned authorities in order to ensure transparency.

You can also read: Supply of Services Under UAE VAT by a Natural Person as a Board Member

Key Compliance Requirements Under the UBO Regulation

There are certain general compliance requirements that are to be followed in order to avoid any penalties and legal proceedings. These requirements include the following:

• The entities are mandatorily required to identify and report the UBOs
• All the details and information related to the UBO of the company are to be entered into a UBO register, which must be maintained with utmost confidentiality.
• The register must be submitted to the relevant authorities on demand.
• The register must contain all the relevant information of the UBO, including the name, address, volume of the shares held, the power and authority provided to the UBO, etc., along with available contact details.
• If there are any changes in the UBOs, then such changes must be updated in the UBO.
• The registers must be maintained till the liquidation of the business and an additional five years after any such liquidation.

What Types of Entities Are Considered UBOs?

The UBOs might include certain types of entities, the common ones of which are listed below.

1. Direct owners: The entities who might directly hold the shares of the company
2. Indirect owner: Those entities who might be owning the share through any intermediaries
3. Controllers: The entities who might have significant influence over the company and might control the company other than owning the shares.
4. Economic beneficiaries: It includes those entities who might not be having any direct ownership but may financially benefit from the operations.
5. Senior Management: If the senior managers have significant power and influence over the company, then they might be considered as UBOs.
6. Trustees and Nominees: If there are any individuals who hold the shares on behalf of any other entities, then they would be UBOs, and they must be reported to the authorities.

You can also read: What Are The Implications of VAT on Designated Charities in UAE?

Steps to Ensure Compliance

The companies can ensure compliance with the UBO Regulations by following the below-listed steps, whereby the penalties and fines could be avoided:

1. Identify the UBO: The primary step might include the identification of the UBO of the company and evaluating the type and nature of control that it has on the company.
2. Maintaining the registers: Creating and maintaining all the required UBO registers to ensure the documentation
3. Appointing a compliance officer: Appointment of a qualified and experienced officer in charge of the UBO would ensure the compliance and proper assessment of the shareholders and related entities.
4. Ensuring proper updates: If there are any changes in the ownership structure, then these must be reported to the registrar and updated in the registers on a timely basis.

How Can CDA Help You?

CDA, being one of the leading accounting and auditing firms, would enable your company to stay compliant with the regulations prevailing in the land. The veterans of CDA are well aware of the AML-CFT laws along with the UBO requirements, making them capable of assisting the companies to ensure compliance and meet all the requirements as per the rules. The CDA team would protect your business from any unforeseen penalties and fines related to UBO.

To know more about our compliance assistance, contact CDA now.