The UAE is always looking for ways to open its borders to the best investors, entrepreneurs, and business people from around the world. To this end, it promotes a low tax environment, minimal bureaucracy, a transparent visa process, and straightforward company incorporation.
In recent years, it has gone further to set the Emirates apart from others in the region and beyond. Such measures have included long term visa schemes, changes to foreign ownership regulations, and relaxation of many company and criminal laws.
Its latest move has been the introduction of Ultimate Beneficial Ownership (UBO) regulations for UAE businesses. Aimed at further increasing transparency in the country, the new rules require certain companies to disclose information regarding their owners.
With the right support, the new rules are simple to adhere to. Here’s how they may impact your business.
What is UBO in UAE?
Put simply, UBO is a Cabinet Resolution introducing the requirement for UAE businesses to disclose details of its beneficial owners. Beneficial owners include all significant shareholders and nominee directors.
Unless exempt, UAE businesses must prepare a register of beneficial owners and file it with the relevant authority.
Why is UBO important?
Ultimate Beneficial Ownership regulations in the UAE are of huge importance. Designed to enhance transparency, they will help a country clamp down on tax avoidance, money laundering, and other criminal activity.
Details collected under the scheme can also be used to develop a sustainable and effective regulatory mechanism and can only serve to attract more reputable businesses to the nation. UBO regulation also further aligns the UAE’s business environment with that in many other respected nations across Europe and Asia.
UBO Regulation UAE – in detail
UBO regulation applies to all UAE businesses other than those in financial free zones such as Abu Dhabi Global Markets and Dubai International Financial Centre, or those owned by the Federal or Emirate government.
The Ultimate Beneficial Ownership regulations for the UAE officially came into force on 27 October 2020. However, companies were given 60 days from this date by which to implement a process to file UBO data.
It is up to businesses to decide who within their organisation constitutes a UBO, nominee director or manager. Authorities have released the following information for guidance.
UBOs are individuals who own, have control, or have voting rights with at least a 25% shareholding in the company. It also includes anyone with the right to dismiss the majority of directors and managers. If such a person does not exist, the UBO is any person who exercises significant control over the company.
Nominee directors and managers
Directors and managers are senior individuals within an organisation but are acting in accordance with the instructions of another person.
Partners and shareholders
Partners and shareholders are classified as per the current UAE Commercial Companies Law. However, UBO requires more information, such as each shareholder’s voting rights.
It is not clear as yet whether UBO information will be made public. It is thought that the database will be held and maintained for official use only.
Any businesses wishing to amend records must notify all relevant authorities with detailed information of the change within 15 days of it coming into force. Companies failing to comply with the new UBO regulations may be fined or sanctioned in another way seen fit by the UAE Ministry of Economy.
Stay compliant with Business Incorporation Zone
The introduction of UBO regulation in the UAE should be welcomed with open arms. A more open and transparent environment can only bring more investment and opportunity to the nation.
However, it does present another administrative task for established UAE business owners – many of whom may be unfamiliar with the country’s other company regulations. That’s why, when starting or running a business in this part of the world, it’s always a good idea to work with an expert.
With the help of a local expert, adhering to the new regulation can be quick and easy. Business Incorporation Zone (BIZ) can help you prepare your information, file it with the local authorities, maintain accurate records, and inform government bodies of any potential amendments.
And that’s not all. We also offer a range of other UAE company support services. We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with what you do best, running your business.
To find out more about the recent changes to regulations, or to start your trade license application, get in touch with the expert team at BIZ today. Call toll-free on 800 BIZ (249) or email [email protected].