The Government of the United Arab Emirates has recently brought forth the resolution which will help in defining the procedure for maintaining a real beneficiary. This resolution will be in effect from the 27th of October 2020 and according to this resolution, it will be required that a businessman or any business entity will reveal all its business information about the owners benefiting form it during the incorporation stage of the business.
This blog will help understand the New Cabinet Decision and will also answer various questions which will come into the mind.
Q1. Who will be Regarded as a Real Beneficiary?
According to the Cabinet Decision, there are three different requirements that can be allotted to a real beneficiary. The three requirements are given below:
- If any a person or body controls or owns an entity either directly or indirectly or has a minimum of 25% of the share capital of the company or its voting rights or has the ownership powers via any other means such as the right of appointment or dismissal of the managers will be regarded as a Real Beneficiary.
- If the above criteria are not fulfilled by any person or in case of doubt about the controlling party, the body then the person who has the power of control over the entity via other means is considered as the real beneficiary.
- If still, no real beneficiary is being able to be determined, then the person who holds the position of the senior in charge of the entire management is considered to be the real beneficiary of the business.
Q2. What is the Register of Partners and Shareholders?
A register of partners and shareholders is a compilation where the names of all the respective Partners, Shareholders and Nominal Partners is provided by the Entity. If there is any change in the Partners, Nominal Managers or shareholders, the said change should be mentioned and notified in the Registers of partners within Fifteen (15) Days of the date of the change made.
Q3. Who is a Nominal Manager?
A Nominal Manager is defined as any physical person which is acting on the instructions of any other person.
Q4. Where is this new Cabinet Decision applicable?
This new Cabinet Decision will be applicable to all the companies which have been licensed in the United Arab Emirates but are not in any financial free zone such as Abu Dhabi Global Markets ADGM) and Dubai International Financial Centre (DIFC). The cabinet decision will also be applicable to companies that are in any way owned by the Emirate or the Federal Government.
Q5. What are the Penalties in case of Violation of the provisions?
If it is found that there are any violations regarding the provisions given according to the Cabinet Decision, the Licensing Authority in the jurisdiction of the Minister of Economy has the power to impose one or multiple sanctions on the entity depending upon the severances of the situation.
The deadline for filing the Registers is decided at sixty (60) days and any changes which are made should be updated within fifteen (15) days of the said change.
If even after reading these questions and answers you have more questions of your own, then you can contact the advisors at JAXA Chartered Accountants to find out more about the Cabinet Decision no 58 of 2020.
JAXA Chartered Accountants is an ISO 9001:2015 certified financial firm that will provide you with financial advice to manage your company properly. It will also help the management in understanding how the change in cabinet decision will affect the company.
It also provides a number of financial services such as Accounting Services, Audit Services, Tax related Services, etc. The implementation of these services in your business will help increase the profitability of your company and will guarantee the success of your company in the long term. For more details on the various services provided by JAXA Chartered Accountants, Contact Us. We will be happy to help you.