Update on reporting for Ultimate Beneficial Owner (UBO) details
For companies of UAE mainland and free zones, the regulatory requirement became effective in 2020 for updating details relating to Ultimate Beneficial Owner (UBO) in the designated registers and portals in order to be made available for reference to the public. Notifications were being issued by several free zone authorities to guide their member companies on how and what to submit in this context. The recent announcement on this matter includes extension of some of the submission due dates as discussed here.
What are the recent updates on the reporting requirements relating to UBO in UAE?
After the introduction of UBO reporting regulation via cabinet resolution no. 58 of 2020, companies of UAE mainland and free zones were urged to update the details of their UBO as per the specific requirements of the respective regulatory authorities as applicable. The recent update is applicable to the companies registered under DMCC (Dubai Multi Commodities Center) and JAFZA (Jebel Ali Free Zone Authority). For the companies registered under DMCC, the due date for submission of UBO details has been extended till 28 June 2021 and for the companies registered under JAFZA, the extended due date is 15 April 2021. For JAFZA entities the previous due date for submission of UBO details was 31 March 2021. The details to be provided for updating the UBO information has to be based upon the instructions from the respective free zone authorities. For example, for companies regulated by JAFZA, the details to be provided comprises ownership details including that of UBO, business model, financial statements, general information on legal advisors, banks, auditors, clients and employees.
How the companies registered as DMCC members can declare the UBO details?
The companies registered under DMCC shall ideally update their UBO details in DMCC portal at their incorporation itself. If it is not already updated, the same has to be updated before the extended due date of 28 June 2021 to avoid any penalties due to late submissions. Once details are updated, any material changes in UBO details that happen in future have to be updated in the same DMCC portal immediately after such change. This calls for more alertness from the compliance function of entities to keep regular watch of the changes in the ownership structure and shareholding patterns.
What are the specific requirements for JAFZA registered companies on UBO declaration?
For the companies registered with JAFZA, UBO details are to be updated as per the extended due date of 15th April 2021 through UBO form available in Dubai Trade Portal. From there onwards if any material changes happen in the UBO status, the same has to be updated in the portal within 15 days of such change. It is always suggested to consult with compliance experts available in the region to assess the UBO structure of the business arrangements properly and to comply with the exclusive reporting requirements of JAFZA on time.
What is the significance of declaring the UBO details by the companies?
The main agenda behind the UBO related reporting requirements from the regulatory perspective is to bring more transparency in the conduct of business transactions by companies and also to curb the financial crimes including money laundering. Also building trust across the stakeholders that are involved in this business environment is another important matter, for which more and more regulatory controls are getting implemented. Such reporting exercises are being adapted from the global best practices to safeguard the interests of investors and other counter parties, ensuring a constructive platform for the overall growth of the economy. To know more about the definition of UBO and identification of UBO details, please refer our article: New UAE Cabinet Decision on Ultimate Beneficial Owner Procedures (UBO) 2020
CDA can assist you in complying with the UBO related reporting requirements
CDA provides assistance to companies for maintaining and timely updating the registers of shareholders and UBOs as per the applicable regulatory requirements, thereby ensuring compliance with the respective reporting guidelines. CDA helps its clients to be aware of the recent developments in the regulatory regime for proactively preparing and arranging the data for necessary submissions on time. CDA’s compliance team can take you through the notifications issued by the UAE authorities and clarify your concerns over the specific provisions as relevant to you based on your registration status. Feel free to contact us for further queries, if any, relating to UBO related database management and reporting requirements.