Ultimate Beneficial Owner Guidelines for New Companies
The UAE’s latest regulations regarding Ultimate Beneficial Owner (UBO) identification are quite stringent. They require companies to provide detailed information about their UBOs, along with information about the company’s shareholders/partners and their nominee board members. Furthermore, companies are required to constantly monitor the relevant data and inform the authorities of any changes that may occur in the data.
All of this sounds like a lot to take in. Fortunately, the resolution provides detailed information on how to comply with it. Companies also have the option to enlist the services of third parties that can help them prepare all the information required in the resolution. Even if compliance with Cabinet Decision No.58 of 2020 is a handful, it’s for the betterment of the business environment of the UAE and it will fulfill the objective of the resolution no. 58 of 2020. By collecting data on UBOs, the government will be able to increase corporate transparency in the region.
If you are planning on establishing a business in the UAE, should you worry about UBO identification and declaration? Yes, you should. The resolution clearly states that its regulations apply to all legal entities registered and licensed in the UAE. This includes all businesses in the mainland and in the free zones. The only entities that are exempted are government or federal owned entities and legal entities licensed in free zones such as DIFC.
New Companies and UBO Declaration
When you establish a new company in the Emirates, you will have 60 days to identify and declare your UBO to the authorities. The declaration process involves collecting data on your UBO and entering it in the Register of Ultimate Beneficial Owner. This register must be filed with the authorities and a copy of it should be present at your company’s official address at all times.
The 60 days’ time period is counted from the date on which your company was licensed and registered. The resolution outlines the information that a company must provide during its registration:
- The name, memorandum of association (MOA), and legal form of the company.
- The address of the company’s head office. If the company being formed is foreign, the address and name of its legal representative in the state, along with proof of the legal representative’s authority.
- Documents, such as the Articles of Association, that have been approved by the relevant state entities.
- The names of the company’s higher management personnel and information on their ID cards and passports.
You should keep in mind that your company cannot have a trading name that is similar to trade names that are already registered with the authorities. Once trade name registration has been completed and approved by the authorities, a company must operate under that name only. It must not use any other name while conducting business. Companies wishing to change their trade name will have to apply for the trade name amendment with the relevant authorities. Also, registered companies need to have a clearly stated registered address within the state.
Once a company has provided all the information mentioned above, it can be registered and licensed. All the other regulations of the resolution apply to new companies as they are.
Bear in mind that if you register a new company and you don’t declare your UBO within the given time limit, your company can face sanctions placed by the Ministry of Economy.