Update Regarding UBO Declaration – Cabinet Resolution Number 58
July 07, 2021
Update Regarding UBO Declaration
The United Arab Emirates Government-issued Cabinet Resolution Number 58 (the Resolution) replaced the Cabinet Resolution 34 on 28 August 2020. The reason behind this Resolution is for the regulation of the Ultimate Beneficial Owner (UBO) procedures to increment corporate transparency. Therefore, corporates should keep this register accessible at their office at all times.
Procedure for Filing UBO:
The UBO Regulations that were implemented in August 2020, mandates all eligible companies under the Resolution to submit and register their UBO before the applicable deadlines to avoid any penalties.
The UBO Procedures include:
- Creation of a record of the concerned data;
- Maintenance of the record;
- Verification of the accuracy and validity of the data;
- Updating the records on a timely and regular basis;
- Submission of the actual beneficiary owner data to the authorities via the designated channels.
Penalties:
The UAE Ministry of Economy (the MoE) warned companies that there would be an imposition of fines up to AED 100,000 and other penalties should the companies not comply with the UBO procedures. This levy of this imposition is to begin from 8 July 2021 onwards.
The MoE, hand in hand with the other concerned authorities responsible for licensing, shall implement that first phase (Phase 1), wherein they shall issue administrative penalties in written warnings to the establishments who are not complying. Phase 1 is to begin on 1 July 2021.
In its second phase (Phase 2), the MoE shall directly impose strict administrative penalties on the non-complying establishments that fail to adopt the required and mandatory measures to correct their status for this period. Phase 2 shall commence on 8 July 2021. During Phase 2, the establishments shall be imposed with heavy fines under the Resolution.
The Resolution:
The MoE, time and by, has reiterated that the submission of the UBO data by the registered and licensed establishments is a mandatory and obligatory legal requirement, and non-compliance will impose administrative penalties. This is an infringement of the guidelines of the Resolution.
What is MoE’s Plan of Action for Such Violators?
- Detecting the violators through desk inspection wherein the establishment’s records will be examined;
- Imposing administrative penalties, if a violation is detected, with a written warning under Phase 1;
- Conducting field inspections wherein the MoE will visit the establishments under the framework of the inspection operations of the concerned authorities.
The MoE further mentioned that the establishments that have not yet adopted the required UBO procedures must immediately undertake the data preparation and maintain it to avoid infringements and violations. The ultimate aim of such measures is to boost the confidence of the national economy and create a stable and safe environment for investments and businesses.
How MBG Could Help:
We at MBG Corporate Services can assist you to prepare the UBO data and submit the same with the relevant authorities. With the extension of the deadline and to comply with the regulations, MBG can guide you to avoid penalties and any infringements. We shall carefully understand the company's structure to identify the real beneficial owner and provide other information necessary for the completion of the Filing for avoiding administrative penalties or any insinuations.
For more information and any Corporate Services requirements, please connect with us:Email: [email protected] Call / WhatsApp: +971 52 640 6240
