UAE on the Regulation of the Procedures of Real Beneficiaries
The UAE Cabinet is all set to implement Cabinet Decision No. 58 / 2020 for the Regulation of the Procedures of Real Beneficiaries in order to regulate obligations of corporate entities that fall outside the ambit of financial free zones i.e. the UAE Mainland. This law requires entities to disclose their real beneficiaries, partners or shareholder during the time of incorporation, through registration.
The entities are required to maintain registers of beneficial owners and registers of partners or shareholders, effective from 27th October, 2020, i.e. 60 days from publication of this Cabinet Decision. All such information as recorded in the said registers shall be submitted to the relevant licensing authority.
The Cabinet Decision has further specified that a real beneficiary shall be a person that owns at least 25% or more of the company’s share capital, directly or indirectly. It goes on to state that a real beneficiary is not limited to just one person, but can be more than one individual that owns and/or controls the entity.
There are certain requirements that have been set out with respect to the Register of Partner and Shareholders, subject to amendment in case of any changes within 30 days from the date of the Cabinet Decision. Any further changes should also be brought to the attention of the company within 15 days of such change. Every such company has a responsibility to maintain the Register as per the criteria prescribed by the Cabinet Decision failure of which, may attract penalties.
The Cabinet Decision therefore, is a stride in the right direction in terms of transparency of operations and cooperation between domestic and international provisions.