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With ultimate beneficial ownership or UBO refers to the practice of identifying and disclosing the identities of the actual people who own and run a company. UBO rules in Dubai, United Arab Emirates, are meant to prevent and punish illegal actions like money laundering and the financing of terrorism. UBOs of a company or other legal entity are individuals who hold significant control or ownership stakes and must be disclosed in accordance with UBO requirements. These people have a significant way over the organisation’s management, decision making, and finances.
The firms are required by the UBO laws to maintain complete and current records of their ultimate beneficial owners. Personal information such as complete name, residential address, nationality, date of birth, and the extent to which they own or manage the entity are examples of this type of data. Since privacy and data protection are crucial concerns, organizations must keep this data in a safe and secure environment.
Companies operating in Dubai must take great care to adhere to UBO requirements, as failure to do so can result in significant financial penalties, damage to the company’s reputation, and even legal action. In order to retain their legal and ethical position inside the UAE’s regulatory framework, firms must comprehend and abide by the UBO criteria and Risiansaccounting is an accounting firm can assist you with it.
UBO is the natural person who ultimately owns controls or has the right to vote with a minimum 25% shareholding of the company, whether through direct or indirect ownership. The UBO also has the right to appoint or dismiss the maximum number of directors/managers in the company. If no natural person fits this profile in the company then any natural person who has control over the company through other means is fit to be the UBO and if no natural person satisfies this condition as well then a natural person who is responsible for the senior management of the company will be named the UBO.
The Resolution applies to all entities licensed in the UAE, excluding the following:
Register of Nominee Director / Manager
a) Details of Directors / Managers acting in accordance with the instructions of another person.
Register of Partner / Shareholder
b) The number of ownership interests held by each Partner or Shareholder and the voting rights attached to such ownership interests and the date of acquisition of ownership interests.
Entities will need to assess who constitutes a UBO and consider whether anyone is a nominee Director / Manager. The Register of Shareholders / Partners is not a new concept as this is a requirement outlined in the UAE Commercial Companies Law, as well as in respective Free Zone Companies Regulations. Although the Resolution requires additional information to be detailed (for example, voting rights).
Entities must notify the relevant authority of any change or amendment to the information provided within fifteen (15) days of such change or amendment.
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If entities do not comply with the Resolution, the UAE Ministry of Economy may impose sanctions on those entities. The list of administrative sanctions is yet to be issued.
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UBO is the natural person who ultimately owns controls or has the right to vote with a minimum 25% shareholding of the company, whether through direct or indirect ownership.
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