New regulation requiring entities to maintain Beneficial Ownership details including Register

The Cabinet Decision No. 58 of 2020 on the Regulation of Procedures related to Real Beneficiaries (“Law”) mandates UAE companies established in Mainland and non-financial free zones to prepare, maintain Beneficiary Ownership details including Register (hereinafter referred to as BOR) and submit details of the same to its Relevant Authority. A real beneficiary is a person who holds ownership or through a series of ownership, directly or indirectly exercises effective control of the company, and transactions are carried out on behalf of that person. The effective control could include the right to vote in the company with a minimum of 25% shareholding or equivalent contribution to the capital of the company and the right to appoint or dismiss the Managers of the company. The Company is required to obtain appropriate, accurate and up-to-date information of the Real Beneficiary which should include the name, nationality, place of birth, legal documents such as Passports, Emirates ID card and the basis on which the person became the Real Beneficiary and the date of expiration of Real Beneficiary of the company. If no person who exercises such control over the company is found during the assessment, the company could register a person who holds the position in charge of the senior management.

However, a company listed in the regulated market subject to the disclosure requirement imposing sufficient transparency requirements of the Real Beneficiary or a subsidiary company owned by the majority of such listed companies is excluded. The existing companies have sixty (60) days i.e. the time up to 27th October 2020 from 27th August 2020 to create the BOR and submit to its relevant Regulatory Authorities. Any amendments and/ or updates with regard to Real Beneficiary must be done within fifteen (15) days from the date of being aware of the change. The Law further mandates the nominal management members to notify companies. Regulatory Authorities have the right to exchange information with foreign competent authorities and the right to administrative sanctions for failure to maintain the BOR, Partners/Shareholders Registers as appropriate.