31st May 2021

Please ensure to submit the Ultimate Beneficial Owner Declarations for your companies in UAE to your respective Licensing Authorities before the due date of 30 June 2021 or such earlier date as prescribed by your respective licensing authority. Should you require our assistance in filing the UBO declaration for your Company, please feel free to contact us.

Ultimate Beneficial Owner
Ultimate Beneficial Owner

Who is a beneficial owner

Beneficial ownership is a term in domestic and international commercial law. It refers to the natural person or persons “who ultimately own or control a legal entity or arrangement. Natural persons are a company, a trust, or a foundation”. The legal owner is the owner on record. The legal owner may be described as the “registered owner”. If the legal owner is described as the beneficial owner. If they are not the legal owner, they may be described as a “nominee”.

Definitions

According to a March 2019 Inter-American Development Bank (IADB) report, beneficial owners are “always natural persons who ultimately own or control a legal entity or arrangement, such as a company, a trust, a foundation”.

According to the United States Securities Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, has or shares voting or investment power.

The terms ‘ultimately owns or controls’ and ‘ultimate effective control’ refer to situations in which ownership/control is exercised through a chain of ownership or by means of control other than direct control. The FATF recommendations are recognized as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.

According to the Vancouver, BC-based Trulioo, the process of identifying UBOs (Ultimate Beneficial Ownership)’s includes acquiring and verifying a company’s “accurate company “information regarding register number, company name, address, status, and key management personnel”; analyzing “ownership structure and percentages”, “determining the “entities or natural persons who have an ownership stake, either through direct ownership or through another party”; identifying beneficial owners: and calculating the “total ownership stake, or management control, of any natural-person and determine if it crosses the threshold for UBO reporting” and “perform AML (anti-money laundering)/ KYC (know your customer) checks for all individuals determined to be a UBO”.

Beneficial Ownership in the U.A.E

After international pressure to practice financial transparency increased, the UAE government announced the introduction of the Ultimate Beneficial Ownership or UBO law. Under the law, the UBO holding 25% of the company’s ownership and voting rights at the firm with the permission to appoint or dismiss directors is reported in case of violation of rules.

Under the law, the UBO holding 25% of the company’s ownership and voting rights at the firm with the permission to appoint or dismiss directors is reported in case of violation of rules. Since then the emirates’ lack of a central register for all its financial activities and a weak regulation has, according to critics, made the Gulf nation turn into a safe haven for illicit financial activities. The UAE has been named in several investigative reports such as FinCEN Files and Luanda Leaks by ICIJ or the International Consortium of Investigative Journalists. Advocates consider UBO to not be enough a parameter to monitor and curb money laundering in the UAE. However not complying with the law, could charge the responsible company with a penalty and a fine worth 100,000 dirhams.

https://m.khaleejtimes.com/news/uae-dh100000-fine-for-firms-not-submitting-authentic-beneficiary-data

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