On August 24, 2020, the Resolution of Cabinet Decision No. (58) was issued, which states that all companies with a business license in the UAE must maintain a registry of all partners, shareholders and UBOs.
UBO is an individual or group of individuals who directly or indirectly has an influence on a legal entity within an organization. The beneficiary owns at least 25% of the company shares directly or indirectly. Transactions can be carried out on his/her behalf and ultimate control over the legal entity can be made.
Such a decision was adopted because in international practice, the beneficiary has the right not to disclose his/her identity which can lead to problems with the transparency of the activities conducted. Therefore, on the territory of the UAE, in order to maintain the transparency of the corporate world, the beneficial owner must provide complete and truthful information about himself/herself to local authorities.
The beneficiary declaration must be submitted no later than 6 months from the end of the financial year. Otherwise, the regulatory authorities may impose liability on the UBO.
One or another authority, depending on the jurisdiction where the company is registered, can have control over the procedure for verifying the UBO. Each jurisdiction is authorized to independently determine the requirements, procedure for submitting documents and conditions for passing electronic registration, which the free economic zones offer to enterprise owners.