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Ultimate Beneficial Owner (UBO)

Cabinet Resolution No. (58) of 2020

This blog explains few major points in the Cabinet Resolution of Ultimate Beneficial Owner in the UAE.

Who is this law applicable to?

The new regulation passed by the cabinet is applicable to all the companies in Mainland and Free Zones, however this provision shall not apply to companies-

  1. which are wholly owned by the Local or Federal Government, or
  2. any-other companies wholly – owned by such companies, and
  3. the Financial Free Zones.

Registration of Legal Persons

All companies must submit the Real Beneficiary Register and the Partners & Shareholders Register to the company’s respective regulatory authorities before 27th October,2020.

How do we identify a beneficial owner? –

  1. Owns or has ultimate control, whether directly through a chain of ownership or control or by other means of control such as the right to appoint or dismiss the majority of its Directors, 25% or more of the shares or 25% or more of the voting rights in the Legal Person.
  • The Beneficial Owner may be traced through any number of Legal Persons or arrangements of whatsoever kind.
  • If two or more natural persons jointly own or control a ratio of capital in the Legal Person, all of them shall be deemed as jointly owners or controllers of such ratio.
  • If no natural person is identified as an ultimate Beneficial Owner, or there is reasonable doubt that any natural person identified as an ultimate Beneficial Owner is the true Beneficial Owner in the Legal Person; then the natural person who controls the Legal Person by other means of control shall be deemed as the Beneficial Owner.
  • Where no natural person is identified in accordance with point – 4 then the natural person who holds the position of a higher management official shall be deemed as the Beneficial Owner.

The Registrar should include the following information of the Real Beneficiary:

  1. Full name, nationality, date, and place of birth.
  2. Residential address or the address which the notices shall be sent on it, by virtue of this Decision.
  3. Number of passport or identity card, the country of issuance, date of issuance and expiry.
  4. Basis and date on which the person became a Beneficial Owner of the Legal Person.
  5. Date on which the person ceased to be a Beneficial Owner of the Legal Person.

The Register of Partners and Shareholders shall include:  

1) Number of shares held by each of them along with their categories and associated voting rights.

2) Date on which such partner or shareholder acquire that capacity in the Legal Person.

3) In case of natural partners or shareholders: the full name as it appears on the identity card or the passport, nationality, address, place of birth, name and address of employer and a true copy of the valid passport or ID.

4) In case of corporate partners or shareholders: the data stated in Clause (1) of Article hereof.

  • The Legal Person must update and record any change to the Register within (15) fifteen days of becoming aware of such change.
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Audit Balance Confirmations

Auditing is an independent examination of the financial statements of an entity, irrespective of its size or legal form, for the auditor to express an opinion thereon. An auditor would acquire sufficient and appropriate audit evidence in order to draw a reasonable opinion on the financial statements. An Audit Balance confirmation is audit evidence received by the auditor by a written or an electronic response from the entity or a third party verifying the accuracy of the information in the books of accounts.

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Fraud can be found early in the history of our world as men have made use of tricks, manipulation, and treachery in order to acquire money, land, goods, or trust, with the overall objective of making a profit. The fraud negatively affects an economy by causing huge financial losses, weakening social stability, threatening democratic structures, leading to a corrupting, and compromising economic and social institutions. Fraud represents the sum of irregularities and illegal actions committed with the intention of deceiving or presenting false, incorrect, or incomplete declarations and documents.

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100% Foreign ownership Law

100% Foreign ownership Law

We have now received more information about the long-awaited 100% Foreign ownership law which is to come into effect in the UAE. According to legal sources, the “Negative List” has been issued where it contains 14 industries which cannot be permitted for full foreign ownership.

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