The Federal Cabinet issued the Cabinet Resolution No 58/2020 (the "UBO Regulations
") last year. The UBO Regulations applies to:
- mainland (or onshore) companies (the "Mainland Companies"); and
- companies incorporated in non-financial free zones such as Dubai Multi Commodities Centre, Jebel Ali Free Zone, etc. (the "Non-Financial Free Zone Companies").
There are separate set of regulations (other than the UBO Regulations) which apply to companies incorporated in financial free zones of Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC).
Under the UBO Regulations, the Mainland Companies and Non-Financial Free Zone Companies are required to submit to their respective corporate regulators the data regarding their ultimate beneficial owner (UBO). A UBO will be an individual who ultimately holds / owns / controls a Mainland Company or Non-Financial Free Zone Company. The criteria to determine a UBO is set out in the UBO Regulations.
Article 17 of UBO Regulations states that administrative penalties will be imposed upon such Mainland Companies and Non-Financial Free Zone Companies who are in breach of the UBO Regulations / do not submit their UBO information to corporate regulators. The Ministry of Economy will be imposing fines of up to AED 100,000 from July 2021 on those companies who do not submit their UBO information by 30 June 2021.
Authored by Musab Iftikhar