Compliance Requirements and Enforcement

The introduction of the Ultimate Beneficial Owner (UBO) regulations represents a pivotal move by the UAE to strengthen its compliance with international standards aimed at preventing money laundering, terrorist financing, and tax evasion. Under this framework, a UBO is defined as any individual who ultimately owns or controls a company. This control can be exercised through direct or indirect ownership of more than 25% of the company’s shares or voting rights, or by possessing significant influence or authority over the company’s operations and management.

Businesses are required to establish and maintain a detailed register of their UBOs, capturing key information such as full names, nationalities, dates of birth, residential addresses, and the scope of their beneficial ownership. This register must be kept up-to-date, and any changes in the beneficial ownership must be reported to the relevant UAE authorities within 15 days.

The enforcement of UBO compliance is rigorous, with entities failing to meet the requirements facing severe penalties. These can include substantial fines, suspension of business licenses, and other regulatory actions. These measures highlight the UAE’s commitment to fostering a transparent, secure, and trustworthy business environment.

Significance and Implications of UBO Regulations

Cabinet Resolution No. 58 of 2020 underscores the UAE’s commitment to preventing the misuse of corporate structures for illicit activities. By mandating companies to disclose their ultimate beneficial owners (UBOs), the UAE aims to strengthen its financial system and safeguard against global financial crimes. This regulation enhances the UAE’s standing as a reputable financial hub, reinforcing its efforts to promote corporate transparency and integrity. Furthermore, it ensures that the UAE remains in full alignment with international financial regulatory standards, bolstering trust and confidence in its business environment.

Legal Compliance and Disclaimer

Our guidance on Ultimate Beneficial Owner (UBO) declarations is firmly based on the UAE’s regulatory framework, particularly Cabinet Resolution No. 58 of 2020, which governs the Regulation of the Procedures of the Real Beneficiary. In addition, our advice is supported by relevant circulars and guidelines issued by the UAE Ministry of Economy and other regulatory bodies. By strictly adhering to these legal directives, we ensure that our services are precise, compliant with the UAE’s transparency objectives, and aligned with international standards on beneficial ownership disclosure. Our goal is to provide clients with reliable support to meet their UBO declaration obligations.

The information provided herein is for informational purposes only and does not constitute specific tax, legal, or professional advice. Clients are advised to consult with appropriate tax, legal, or professional advisors to determine the relevance and application of the information to their specific circumstances. Growth Partners disclaims any responsibility for errors, omissions, or any loss or damage arising from reliance on this information. Use of and reliance on the information is at the user’s own risk.