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NEWS October 14 2020

‘Ultimate Beneficial Ownership’: New Registry Requirements

By Eimhéar O’Kane, Associate

 

Cabinet Decision No.58/2020 on the ‘Regulation of Procedures Relating to Real Beneficiaries’ (the “Decision”) was published on 27th August 2020 and aims to introduce international standards of transparency in respect of ultimate beneficial ownership of companies in the UAE.

As a result of the Decision, most companies in the UAE will now need to maintain a register of their ‘Real Beneficial Owner(s)’. The Decision applies to all companies established in the UAE, including within the free zones (with the exception of the financial free zones, DIFC & ADGM), but shall not apply to companies which are directly or indirectly wholly owned by the UAE federal or local governments.

Real Beneficial Ownership is defined as the “physical person to whom final ownership is devolved or who exercises final control over the legal person”.

Anyone who, directly or indirectly, controls the company by:

  • owning 25% or more of its share capital;
  • controlling 25% or more of its voting rights; or
  • having the right to appoint or dismiss a majority of a company’s managers,

shall be considered as a Real Beneficial Owner(s).

Companies to whom the Decision pertains shall create and maintain a register of their Real Beneficial Owners along with specific data about them. Any new companies established in the UAE after the date of the Decision will be required to provide this register upon incorporation, and all existing companies (to whom the Decision applies) are required to submit their registers to their relevant licensing authorities before 27th October 2020.

The register should include the following information relating to the Real Beneficial Owner(s):

  • full name, nationality, date and place of birth;
  • residential address to which notifications will be sent;
  • passport or national ID number, country of issuance, issuance & expiry date;
  • the grounds under which they are defined as a Real Beneficial Owner; and
  • date of cessation to be a Real Beneficial Owner (when applicable).

All entities are responsible and required to take reasonable measures to procure relevant, accurate & up-to-date information on their Real Beneficial Owners at all times and must update the register within 15 days of becoming aware of any changes.

The information submitted to the authorities will not be disclosed or made available to anyone without the prior written consent of the Real Beneficial Owner except for in special circumstances such as combatting crimes of money laundering or prevention of financing of unlawful organisations

 

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