Ultimate Beneficial Ownership

According to the Ministry of Economy (MoE), the imposition of fines on UBO violators has begun. In 2023 the amount of fines reached Dh100,000.

Since July 1, 2021, the MoE and the concerned licensing authorities in the country have announced that they have already begun implementing the first phase of administrative penalties, including written warnings to non-compliant establishments.

“The penalties begin with the issuance of a written warning. In case of the establishment's continued non-compliance a fine will be Dh100,000, as well as additional administrative penalties: the suspension of the license for a year or restrictions on the powers of the board of directors. The detection of violations will be carried out through a desk inspection – the examination of an establishment’s records with the licensing authority to ascertain the extent of its commitment and provide the ultimate beneficial owner data. In accordance with the decision, establishments can appeal against the punitive measures within the specified legal period of 30 days from the date of notification of the violation” - The ministry explained.

The ultimate beneficial owner procedures include

1. Creation of a record of the ultimate beneficial owner data and maintaining it within the establishment;
2. Verification of the accuracy and validity of the data and updating it on an ongoing basis;
3. Submission of the real beneficiary owner data to the licensing authorities through the designated channels.

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Key points about UBO:

• UAE Government issued resolutions by Cabinet of Ministers No. (58) of 2020 concerning Ultimate Beneficial Owner.
• UBO is aimed at enhancing the transparency of UAE-registered entities and ensuring international compliance.
• UBO is applicable to all companies in the UAE except for government
• Registers to be maintained:
• UBO Register
• Shareholder/Partner Register
• Nominee Directors Register

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Determination of UBO

1. Natural persons who ultimately own, control, or have the right to vote with minimum 25% shareholding of the company (through direct or indirect ownership) or who have the right to appoint or dismiss the majority of the Directors / Managers

2. If no natural person satisfies the condition above, then any natural person who exercises control over the company through other means shall be deemed the UBO

3. If no natural person satisfies both conditions above, then a natural person who is responsible for the senior management of the company will be deemed as the UBO

In case of any changes to the ultimate beneficial owner data of an establishment, it is required to notify the relevant licensing authority within 15 days of the changes in order to avoid the administrative penalties resulting from them. “The establishments shall also appoint a person residing in the country whom the licensing authority can communicate with, in relation to the establishment’s ultimate beneficial owner data or other information” - the MOE said.