Contents of a UBO register of a Company

The government of the United Arab Emirates passed a resolution which was enacted on the 29th of August 2020, which was titled Cabinet Resolution no 58 concerning the Ultimate beneficial Owner (UBO Law). This cabinet resolution was passed with the intention to tackle the avoidance of taxes by the businesses so that the country will start to follow the international best practices.

In this blog, we will understand the meaning of an Ultimate Beneficial Owner (UBO) and how will it affect a business in the United Arab Emirates.

What is an Ultimate Beneficial Owner (UBO)?

A UBO or an Ultimate beneficial owner can be defined as a person who controls a minimum of 25% of the total issued share capital. This person has the right to employ or discharge the services of the major directors of the company.

In simple terms, the person who manages the company or takes any major decisions for the company will be considered an Ultimate Beneficial Owner.

According to the UBO Law, all the companies which are registered in the country are now required to maintain a register that will consist of all the information about the Ultimate Beneficial owner (UBO), shareholders and the nominee of the companies. This register of information needs to be submitted within the Registrar inside of 60 days of the date of the Decision or within 60 days of the issuance of the company licence, whichever is considered as the deadline.

The three different types of registers should provide various details about the person. These important details to be considered are as follows:

1. The Real Beneficiaries Register (UBO Register)

As per the law, there are certain details that need to be fulfilled by a person or entity (namely, three criteria)

• The Real Beneficiary should be a person who can control 25% of the voting rights of the company or control 25% of the share capital or has the right to appoint or dismiss the directors or managers.
• In case the first criteria are not fulfilled, a real beneficiary is a person who can exercise over the company by various other means.
• If still, the conditions are not fulfilling, then the natural person will be the person who is responsible for the senior management of the company.
• Each of the UBO Register should include the following details:
  • Complete name, date of birth, nationality, residential address as well as the address of notice, identification number, country and the date of issuance of the passport or identification number.
  • The UBO register should mention what criteria are fulfilled, and the person is termed as a beneficiary.
  • The date on which a person became a beneficiary as well as the date on which the person will not have the title of a beneficiary.

2. Shareholder or Partner Register

The details which are required to be provided in the shareholder or Partner Register are as follows:

• The total amount of shares held by the business and also the voting rights which are available to the entity holding the shares
• The date of the acquisition of the shares by the partners or shareholders
• Information for Shareholders which are considered as legal entities
  • Name, memorandum and article of association as well as the legal form
  • Address of the headquarters of the legal entity. If the said partner or shareholder is a foreigner, then the name of the legal representative should be added
  • Name and other details of the people holding senior management positions (details include an Identification number, Passport, date, country of issue, expiry date etc.)

3. Register of Nominee Managers and Trustees

If a business or company comprises of a shareholder, trustee or nominee manager, then it is required that the shareholder or partner register must include information about the nominee manager or the trustee of the business. This information required to be detailed in the register will be the same as the real beneficiary of the company.

The UBO law was introduced to promote transparency of business and to discourage improper and deceitful business practices. With the recent influx of businesses into the country, there is a huge need for such firms which will understand the financial situation of the business and will take decisions accordingly. These firms will also provide various financial services, which will enhance the profitability of the company.

One such financial firm in the United Arab Emirates is JAXA Chartered Accountants, which will analyse the financial position of the business and provide services that will enhance the profitability of the organisation. For more details on the various services provided by JAXA, Contact us. We will be happy to help.