News Flash: UAE introduces Beneficial Ownership regulations
The UAE has announced the formal roll-out of uniformized minimum disclosure requirements for corporate entities incorporated in the UAE and the introduction of a beneficial ownership register.
The new regulations – Cabinet Resolution No. 58 of 2020 on the Regulation of the Procedures of the Real Beneficiary (the Resolution) – came into effect on 28 August 2020.
- Compliance obligations: All UAE-registered companies must maintain
- A shareholders’ register
- A beneficial owners’ (the BO(s)) register, and
- A nominee directors’ register.
While the BOs’ and nominee directors’ registers are new concepts, the shareholders’ register is not [it is set out in the UAE Commercial Companies Law]. The Resolution details the data that must be maintained in relation to each shareholder, incl. details of senior managers of corporate shareholders.
- Broad scope: the obligations are all-encompassing, applying to all legal persons registered in the UAE (aside from governmental owned entities). This includes UAE mainland entities and entities – whether ‘free zone’ or ‘offshore’ – in all non-financial free zones. [ADGM & DIFC have their own, similar regulations already in place]
- Deadline for filing just around the corner! BO information must be filed with the relevant registrar and licensing authorities responsible by 23 October 2020. Nominee Directors serving in such capacity (as defined below) must notify the company by 23 September 2020 [!].
- Ongoing obligations: beyond the initial deadline, all registries must be maintained on an ongoing basis and companies must notify the registrar of any change or amendment to the information provided within 15 days of such change or amendment. Each company must also take reasonable steps to ensure transparency and to obtain accurate information regarding the beneficial ownership.
- New concepts. The resolution introduces two new concepts:
Beneficial owner of a company:
- any natural person who ultimately owns/controls or has right to vote over at least 25% of company’s share capital, whether through direct or indirect chain of ownership or control, or any natural person who has right to appoint or dismiss majority of directors of the company;
- if no natural person meets the criteria under point (a) or if there are doubts as to the identity of the BO, BO shall be any natural person who manages or administers the company; or
- if the company is unable to identify any natural person that meets the criteria under points (a) and (b), BO shall be the natural or a legal person who is the senior manager of the company.
Nominee Director: A natural person serving in a director capacity, and acting in accordance with guidelines, instructions, or will of another person.
- Confidentiality: Consistent with the UAE policy as to protect privacy and limit data available in the public domain, the registry to which the information is provided is not public.
What We Say
There is no doubt that the UAE is taking AML/CFT very seriously. Substantial resources have been put towards the topic which is at the top of the policy agenda. In a short time, the country has taken significant steps in strengthening its framework.
But outside of the DIFC and ADGM, two global financial centres, there was a pressing need to uniformize ongoing compliance requirements across a vastly fragmented system of registries (39 different company registries) spread between non-financial free zones and the UAE mainland. This is what the Resolution tackles.
Operators, be aware – compliance with ongoing regulatory requirements should no longer be an after-thought, but become a priority!
How Can We Assist
Re/think can assist you comply with the Resolution by maintaining your entity’s statutory registers and minute books, which comprise the (i) shareholders’ register; (ii) beneficial owners’ (the BO(s)) register, and (iii) nominee directors’ register.
The above assistance is part of our corporate secretarial services, which can be tailored as per your entities’ specific needs.
We have designed two (2) different corporate secretarial services packages, ready to go. Whether start-up, high growth company or blue-chip company, we have the right offering at the right value point for your organisation:
We would be happy to discuss your company secretarial needs in depth, helping you comply with the Resolution and find the most cost and time effective solution to meet your administrative and statutory compliance responsibilities.
Who We Are
Re/think is a boutique outsource and advisory company providing client-focused services in tax advisory, accounting, human resources and business advisory.
We specialize in assisting clients with cost-effective, high-quality services and solutions. We create value by investing in highly qualified and motivated people and working closely with leading industry partners to provide our clients with a one-stop-shop for all their business support needs which is tailored to suit your individual requirements.