What UAE Companies Need To Know About The New UAE Cabinet Decision No. 58 of 2020 On Regulating The Beneficial Owner Procedures

By: Diana Youssef

In brief: UAE Cabinet Decision No. 58/2020 is to be executed to regulate the minimum obligations of firms incorporated in the UAE mainland and in the non-financial free zones by requiring disclosure at the initial incorporation/registration stage, and maintenance after that, of a "Register of Real Beneficiaries" and "Register of Partners or Shareholders" (the Registers).

Essential takeaways

Most firms licensed to operate in the UAE will be required to generate and sustain a Register of Real Beneficial Owners and a Register of Partners (or Shareholders) by 27 October 2020.
Firms are obligated to submit their information from these registers to competent licensing authorities.
There are certain exceptions to the new legislation requirements that apply to many firms, including those which are ultimately listed on a regulated public exchange.

Who is exempt from the New Cabinet Decision?

Firms in financial free-zones (Abu Dhabi Global Markets and Dubai International Financial Centre).
Firms that are directly or indirectly wholly-owned by federal or Emirate government.
Companies licensed in the UAE, which are ultimately listed on a market that provides full transparency rules on Real Beneficial Owners, are exempt from specific requirements in the New Cabinet Decision.

What are firms in the UAE required to do?

The New Cabinet Decision mandates that firms licensed to carry on business in the UAE are required to maintain a Register of Partners (or Shareholders) and a Register of "Real Beneficial Owners." A Real Beneficial Owner is defined as the individual that ultimately controls the licensee, whether directly or indirectly, through at least 25% of the capital.

Licensees in the UAE are required to have created a Register of Partners (or Shareholders) and a Register of Real Beneficial Owners by 27 October 2020. The competent licensing authorities are obligated to maintain the confidentiality of information submitted to them to the relevant registrar and licensing authorities responsible for supervising the Register of commercial trade names registered in the UAE (the Registrant).

Every Entity must take reasonable measures to obtain appropriate, accurate, and up-to-date data for the Registers and preserve its records from damage, loss, or destruction. They must also appoint an individual point of contact (resident in the UAE) and provide the details of that contact to the Registrant.

What is the deadline?

The Registers' filing deadline is sixty (60) days from the date of publication of the Decision, i.e., 27 October 2020 or at the time of incorporation/registration of a new Entity. Any changes to the information contained therein must be updated within fifteen (15) days.

What happens if we fail to submit the Economic Sanctions Report under the provisions of this Decision?

Any case of a violation of the provisions of this Decision can result in the Minister of Economy or the Licensing Authority imposing one or more sanctions.

If the National Assessing Authority decides that the Licensee or the Exempt Licensee has committed a financial violation and has committed the same violation in the Fiscal Year following that of the violation, it shall impose an administrative fine amounting to four hundred thousand (400,000) dirhams.

What happens in case our company submits inaccurate information?

The Licensee or the Exempt Licensee shall be liable to an administrative fine amounting to fifty thousand (50,000) dirhams if it submits inaccurate information to the Regulatory Authority or the National Assessing Authority. Suppose the firm (Licensee or the Exempt License) was aware that the information was not accurate at the time of its submission if it fails to notify the Regulatory Authority once it discovers such information's inaccuracy after submitting it.

Need Help?

For more information about the right of appeal against the administrative fine, date of payment of the administrative fine, access to workplace and inspection of work documents and/or other information, please contact a Complyee Expert today.

Complyee Consulting can provide further advice on these developments, and our Compliance Experts can assist in maintaining and filing statutory registers. Please email Complyee or for more information.