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Ultimate Beneficiary Owner (UBO)

In the ever-evolving landscape of corporate governance and transparency, the concept of Ultimate Beneficial Ownership (UBO) has gained significant importance. UBO refers to the natural person who, either directly or indirectly, owns and controls a company. In the United Arab Emirates (UAE), individuals with ownership of at least 25% of shares or voting rights in a company, or those with the power to appoint or dismiss a majority of a company’s directors, are considered UBOs.

  • Steps to Comply with UBO Regulations

For companies operating in the UAE, adhering to UBO regulations is not just a legal requirement but a vital step toward ensuring transparency and accountability. Here are the essential steps to file Beneficial Ownership Information with the Registrar of Companies:

  1. Notification to Beneficial Owners: The company is responsible for identifying individuals who qualify as beneficial owners and notifying them. Upon identification, the company must send a notice to the beneficial owner, requesting specific information. This notice should be issued within twenty-one (21) days from the date of identification and should include the following:
  • A copy of the beneficial owner’s National Identification Cards, Passports, or Birth Certificate.
  • A copy of the beneficial owner’s PIN Certificate.
  • Contact details, including the telephone number, email address, and occupation of the beneficial owner.
  • Details about the nature of ownership or control that the beneficial owner has in the company.
  • The name of any shareholder holding shares on behalf of the beneficial owner.
  • The name of the director appointed by the beneficial owner.

 

  1. Preparation and Submission of Form BOF1: The company must prepare Form BOF1, which includes the information gathered in step 1. This form should be lodged with the Registrar of Companies within thirty (30) days from the date of preparation.
  • Consequences of Non-Compliance by Beneficial Owners

In cases where a Beneficial Owner fails to provide the required information to the company to enable the preparation and submission of Form BOF1, the company must take specific actions. These actions are designed to enforce compliance and ensure transparency:

  1. The company should issue a warning notice to the Beneficial Owner, indicating its intention to restrict the relevant interest of the Beneficial Owner.
  2. The restriction-imposed results in several consequences, including the voidance of any transfer of the Beneficial Owner’s interest, the inability to exercise rights related to that interest, the prohibition of share issuance in the name of that interest, and the restriction of payments due from the company in respect to that interest.
  3. Once the warning notice is issued and the restriction imposed, the company must record this in its register and lodge it with the Registrar.
  • UBO Submission Deadlines

For companies registered in the UAE Mainland through the Dubai Economic Department (DED), the deadline for UBO submissions was June 15, 2021. For companies registered in the Dubai Multi Commodities Centre (DMCC) Free Zone, the deadline was June 28, 2021.

Penalties for Non-Compliance

Compliance with UBO regulations is not optional, and there are significant penalties for non-compliance. In case of failure to adhere to the regulations, authorities may issue a written warning, along with imposing a hefty fine of approximately AED100,000. Continued non-compliance can lead to the suspension of the company’s license.

  • Get Professional Assistance with UBO Compliance
  • Navigating the complexities of UBO (Ultimate Beneficial Owner) regulations and ensuring compliance can be a daunting task for businesses. That’s where professionals like “Elite Auditing” come into play ensuring that your business stays on the right side of the law and avoids any unforeseen penalties or implications. Our team is adept at the meticulous process of identifying the real beneficial owner of your company. In addition to our other services, we also undertake the responsibility of providing the necessary supplementary information and handle the UBO filing on your behalf. With our expertise, you can be assured of a thorough and compliant process.