Ultimate Beneficial Ownership (UBO)
Cabinet Decision No. (58) of 2020 Regulating the Beneficial Owner Procedures
Licensing authorities should begin issuing warnings to entities violating Ultimate Beneficial Owner Procedures.
According to the Ministry of Economy, the last date to provide data on ultimate beneficial owners is the 30th of June 2021. However, registrations are still being accepted by the licensing authority
About UBO
UBO's objectives are to enhance the transparency of the UAE-registered entities.
Deadline for the UBO
The deadline specified by your licensing authority was on the 30th of June, 2021.
Administrative Fines
In accordance with Cabinet 16 of 2021, anyone found in violation of the law could be fined up to AED10,000.
What is UBO?
Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures (the “Resolution”) took effect on August 28, 2020, and replaced Cabinet Resolution No. 34 of 2020 issued earlier. The Resolution covers the most updated requirements for the entities in UAE to disclose their Ultimate Beneficial Owners, which intends to enhance the transparency of the UAE registered entities. It also plans to develop effective and sustainable executive and regulatory mechanisms and procedures for beneficial owner data and improve implementation to ensure International Compliance and global confidence.
Deadline for the Ultimate Beneficial Owner UAE
According to the Ministry of Economy (MoE), about 513000 targeted establishments regulated by 38 licensing authorities all over the UAE are required to provide data on ultimate beneficial owners. All licensed by local licensing authorities as well as non-financial free zones are included. All entities in the UAE must comply with the preparation of the UBO Declaration until earlier than the deadline specified by their licensing authority or the 30th of June 2021.
For Other Authorities:
As per the advice from the other authorities, they are still waiting for the ministry's approval regarding the extension request.
| # | Violation | Legal Ref., Cabinet Resolution No. (58) of 2020 | Administrative Penalties | ||
|---|---|---|---|---|---|
| First Time | Second Time | Third Time | |||
| 1 | Failure of the legal person to create Register of Beneficial Owner and maintain its data. | Article (8) | Written Warning | AED 50,000 and warning the legal person to rectify its situation within Thirty (30) Days as of the violation issue. | AED 100,000 and suspension of the trade license for at least Twelve (12) Months. |
| 2 | Failure to include the data mentioned in Clause (2) of Article (8) of the mentioned Cabinet Resolution No. (58) of 2020. | Article (8) | Written Warning | AED 20,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 40,000 and suspension of the trade license for at least Six (6) Months. |
| 3 | Failure of the legal person to maintain adequate, accurate, specific and updated data of Beneficial Owner or Failure of the legal person to correctly record down the Beneficial Ownership. | Article (6) and Article (7) | Written Warning | AED 10,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 20,000 and suspension of the trade license for at least One (1) Month |
| 4 | Failure of the legal person to provide the Registrar with the data referred to in Article (10) of the mentioned Cabinet Resolution No. (58) of 2020 regarding the details of the director or nominal board member. | Article (9) | Written Warning | AED 20,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue | AED 40,000 and restriction of the powers of the board members or directors, who are proved liable for the violation. |
| 5 | Failure of the legal person to create the Register of Partners or Shareholders. | Article (10) | - | AED 50,000 and warning the legal person to rectify its situation within Sixty (60) Days as of the violation issue. | AED 100,000 and suspension of the trade license for at least Twelve (12) Months. |
| 6 | Failure of the legal person to maintain the information of all partners or shareholders in the Register of Partners or Shareholders. | Article (10) | Written Warning | AED 30,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 60,000 and suspension of the trade license for at least Six (6) Months. |
| 7 | Failure of the legal person to provide the Registrar with the information of beneficial owner and the Register of Partners or Shareholders and maintain such registers from damage, loss or destruction | Article (11.1) | Written Warning | AED 15,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue | AED 30,000 and suspension of the trade license for Three (3) months. |
| 8 | Failure of the legal person to provide any additional information required by the Registrar | Article (11.2) | Written Warning | AED 5,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 10,000 and suspension of the trade license for at least One (1) Month |
| 9 | Failure of the legal person to provide the Registrar with the name of a natural person residing in the UAE and authorized to disclose to the Registrar all data and information required by the mentioned Federal Decree-Law or Executive Regulations thereof. | Article (11.4) | Written Warning | AED 1,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 2,000 and suspension of the trade license for at least One (1) Month |
| 10 | legal person to issue shareholder's share guarantees. | Article (11.5) | Written Warning | AED 5,000 | AED 10,000 |
| 11 | Failure of the legal person, on the issuance of shares or stocks in the name of persons or board members, to disclose to the Registrar the information in respect of such shares or stocks and the identity of such persons or board members within Fifteen (15) Days as of such issuance. | Article (11.6) | Written Warning | AED 5,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 10,000 and restriction of the powers of the board members, directors or owners, who are proved liable for the violation. |
| 12 | Failure of the legal person to hand over to the liquidator the Register of Beneficial Owner and Register of Partners or Shareholders within Thirty (30) Days as of appointing the said liquidator | Article (11.7) | Written Warning | AED 5,000 and warning the legal person to rectify its situation within Fifteen (15) Days as of the violation issue. | AED 10,000 and suspension of the trade license for at least One (1) Month. |
| 13 | Failure of the legal person or the liquidator to maintain the records and all information referred to herein for at least Five (5) Years as of the date of dissolution, liquidation or de-registration. | Article (11.8) | Written Warning | AED 20,000 | AED 40,000 |
Deadline for the Ultimate Beneficial Owner UAE
According to the Ministry of Economy (MoE), about 513000 targeted establishments, regulated by 38 licensing authorities all over the UAE are required to provide data on ultimate beneficial owners. All licensed by local licensing authorities as well as non-financial free zones are included. All entities in the UAE must comply with the preparation of the UBO Declaration until the earlier of, the deadline specified by their licensing authority or 30th of June 2021.
For Other Authorities:As per the advice from the other authorities, they are still waiting for the ministry approval regarding the extension request. |
| Authority Name | Notification required | Notification deadline |
|---|---|---|
| Dubai Media City (DMC) | Yes | 30th of June 2021 |
| International Freezone Authority (IFZA) | Yes | Registrations are still being accepted |
| Dubai Studio City (DSC) | Yes | 30th of June 2021 |
| Ras Al Khaimah Economic Zone (RAKEZ) | Yes | Before 8th of July 2021 |
| Fujairah Creative City (FCC) | Yes | Before 8th of July 2021 |
| Sharjah Media City Free Zone (SHAMS) | Yes | 30th of June 2021 |
| Ajman Free Zone Authority (AFZA) | Yes | 7th of July 2021 |
| Dubai Multi Commodities Centre (DMCC) | Yes | 30th of June 2021 |
| Dubai Outsource Zone (DOZ) | Yes | 30th of June 2021 |
| Dubai Airport Free Zone (DAFZA) | Yes | 30th of June 2021 |
| Dubai South (DWC) | Yes | Before 8th of July 2021 |
| Dubai Internet City (DIC) | Yes | 30th of June 2021 |
| Jebel Ali Free Zone (JAFZA) | Yes | 30th of June 2021 |
| Dubai Silicon Oasis (DSO) | Yes | 30th of June 2021 |
| Dubai Department of Economic Development (Dubai DED) | Yes | 15th of July 2021 |
| Sharjah Airport International Free Zone (SAIF) | Yes | 30th of June 2021 |
| Dubai Science Park | Yes | 30th of June 2021 |
| Dubai Development Authority (DDA) | Yes | 30th of June 2021 |
| Hamriya Free Zone | Yes | 30th of June 2021 |
| Abu Dhabi Department of Economic Development | Yes | 30th of June 2021 |
| Sharjah Department of Economic Development | Yes | 30th of June 2021 |
| Umm Al Quwain Free Trade Zone Authority (UAQ) | Yes | 30th June 2021 |
Violations and Administrative Fines for Ultimate Beneficial Ownership
All companies registered and licensed in the UAE, including commercial-free zones, must submit authentic details (Data) of their (Real) beneficiaries to avoid penalties; administrative fines ranging from AED 50,000 to AED 1,000,000.
Cabinet Decision No. (16) of 2021 Regarding the Unified List of the Violations and Administrative Fines for the Said Violations of Measures to Combat Money Laundering and Terrorism Financing Subject to the Supervision of the Ministry of Justice and the Ministry of Economy.
How to Identify Ultimate Beneficial Owner?
Ultimate Beneficial Owner Rule
According to Cabinet Resolution No. (58) of 2020, the Ultimate Beneficial Owner can be defined as the following:
- Natural Person who controls/owns the establishment definitively, through direct/indirect ownership of 25 % or more shares.
- Or: someone who holds the right to vote by 25% or more or the right to appoint/dismiss the majority of the establishment’s managers or any other means by which he exercises ultimate control over the establishment.
- Suppose the UBO cannot be identified using the two criteria listed above. In that case, a natural person who holds the position of Senior Management Official in the company may be deemed the UBO.
The Ultimate Beneficial Owner Procedures are the critical element in the UAE’s approach to combating money laundering and financing of terrorism and illegal organizations, and financing the spread of weapons of mass destruction under the Financial Action Task Force’s requirements and the National AML strategy’s determinants. These will help fulfill the objectives of Federal Decree-Law No. 20 of 2018 on Anti Money Laundering and Financing of Illegal Organizations and Countering Financing of Terrorism, and as per the Cabinet Resolution No. 58 of 2020 controlling the ultimate beneficial owner procedures.
How to submit Real Beneficial Owner data
In relation to the Ultimate Beneficial Ownership, we will Perform a Preliminary Assessment of your business in fulfilling and complying with the process, procedures, and submission UBO Declaration. We are here to help you and your business comply with Ultimate Beneficial Ownership requirements efficiently and professionally.