Ultimate Beneficial Owner and Shareholder Registers

In Brief

1. Federal Cabinet Resolution No 58 of 2020 on the Regulation of the Procedures of the Real Beneficiary (“Cabinet Resolution”) came into effect on 28 August 2020 and applies to all entities incorporated in onshore UAE and in the non-financial free zones (“UAE Companies”).
2. The Cabinet Resolution introduces new requirements for UAE Companies to disclose their ultimate beneficial owners to ensure transparency of entities registered in the UAE.
3. The objective of the Cabinet Resolution is to require UAE Companies to maintain registers listing:
    
   1. the ultimate beneficial owners;
   2. the partners or shareholders of a company; and
   3. nominee directors, if any.

Filing Obligations

The Cabinet Resolution requires UAE Companies to disclose at the initial incorporation and registration stage, and maintain thereafter, the following registers:

1. Register of Ultimate Beneficial Owners;
2. Register of Partners or Shareholders; and
3. Register of Nominee Directors

(together, the “Registers”).

The Register of Ultimate Beneficial Owners and the Register of Partners or Shareholders are required to be filed (and updated when necessary) by 27 October 2020 with the relevant registrar and licensing authorities responsible for supervising the relevant UAE company registered in the UAE (the “Registrars”).

UAE Companies must also notify the Registrar of any change or amendment to the information provided within fifteen (15) days of such change or amendment.

All UAE Companies are also required to maintain copies of all the Registers at their offices, and take reasonable measures to obtain appropriate, accurate and up-to-date data for the Registers.

UAE Companies which are listed on well regulated stock exchanges or UAE Companies which are owned by these listed companies may rely on the disclosures made to the relevant stock exchange rather than making independent inquiries as to the Ultimate Beneficial Owners.

Registers of Ultimate Beneficial Owners

For the purposes of the Cabinet Resolution, the UAE Company’s Ultimate Beneficial Owner would be the natural person(s) who:

1. owns or finally controls twenty-five percent (25%) or more of the UAE Company, through direct or indirect shares or equity;
2. has twenty-five percent (25%) or more voting rights in the UAE Company directly or indirectly; or
3. retains ownership in the UAE Company through a chain of ownership or control, or through control through any other means, such as the right to appoint or dismiss the majority of its directors.

The Ultimate Beneficial Owners are required to be tracked through any number of corporate bodies or arrangements of any kind.

Sanctions

Administrative sanctions could be levied by the Ministry of Economy against UAE Companies that fail to provide the necessary information to the relevant Registrar.  The list of administrative sanctions is yet to be issued.

Recommendation

Hadef & Partners’ Corporate team is able to assist with:

• Preparing the Registers of the Ultimate Beneficial Owners, Partners or Shareholders and Nominee Directors, in accordance with the Cabinet Resolution.
• Arranging filing of the Registers with the relevant Registrars
• Informing the Registrars of any amendments or changes to the Registers.

If you would like more information, or have any questions, please email Ahmad Sergieh, Head of Corporate a.sergieh@hadefpartners.com and Sundus Khan, Associate, Corporate s.khan@hadefpartners.com in Dubai, and we would be pleased to discuss the most relevant strategy for your needs.