The UAE has implemented Ultimate Beneficial Ownership (UBO) regulations to enhance corporate transparency and combat financial crimes such as money laundering and tax evasion. Businesses operating in the UAE are required to maintain records of their beneficial owners and submit UBO declarations to comply with Cabinet Decision No. 58 of 2020.
In this guide, we’ll explain what UBO regulations are, who must comply, and how businesses can ensure full compliance with UAE laws.
What is Ultimate Beneficial Ownership (UBO)?
An Ultimate Beneficial Owner (UBO) is the individual who ultimately owns or controls a business, either directly or indirectly.
UBO Identification Criteria
A UBO is any individual who:
✅ Owns 25% or more of a company’s shares directly or indirectly
✅ Exercises significant control over the company’s decision-making
✅ Benefits from the business even if ownership is not direct
✅ Is a nominee shareholder acting on behalf of another party
Why Are UBO Regulations Important?
The UAE introduced UBO regulations to align with international anti-money laundering (AML) and counter-terrorism financing (CFT) standards.
✅ Prevents Money Laundering & Fraud – Ensures financial transactions are traceable
✅ Enhances Transparency – Helps authorities identify real company owners
✅ Ensures International Compliance – Aligns UAE with Financial Action Task Force (FATF) recommendations
✅ Avoids Penalties & Fines – Non-compliance with UBO regulations can lead to severe penalties
Who Must Comply with UBO Regulations?
UBO regulations apply to all UAE businesses, including:
✅ Mainland companies licensed by the Department of Economic Development (DED)
✅ Free Zone companies (except certain exempted zones)
✅ Partnerships and joint ventures
Exempted Entities
The following entities are not required to comply with UBO regulations:
❌ Companies listed on a recognized stock exchange
❌ UAE government-owned entities
❌ Entities regulated by financial authorities (e.g., DIFC, ADGM)
How to Determine & Declare UBO in the UAE
Businesses must identify and declare their UBOs by following these three key steps:
Step 1: Identify the UBO(s)
- Analyze shareholding structures to determine if any individual owns 25% or more
- If no single individual meets the criteria, senior management officials may be classified as UBOs
Step 2: Prepare the UBO Register
Companies must maintain a UBO Register that includes:
📌 Full name, nationality, and passport details of UBO(s)
📌 Ownership percentage and method of control
📌 Date of becoming a UBO
Step 3: Submit UBO Information to Authorities
- Businesses must submit UBO details to the relevant UAE licensing authority
- Any changes in ownership must be updated within 15 days
Penalties for Non-Compliance with UBO Regulations
Failure to comply with UBO regulations can lead to serious penalties, including:
❌ Fines up to AED 100,000 for inaccurate or missing records
❌ Company license suspension for non-compliance
❌ Legal action and further financial penalties for repeat violations
How to Ensure Full UBO Compliance in the UAE
To avoid penalties, businesses should:
✅ Conduct a UBO audit – Regularly update ownership records
✅ Appoint a compliance officer – To oversee UBO filings & legal compliance
✅ Use professional services – Partner with experts like NAM Accountants to ensure accurate documentation
How NAM Accountants Can Help with UBO Compliance
At NAM Accountants, we provide end-to-end UBO compliance services, ensuring your business meets UAE regulatory requirements.
✅ UBO Identification & Documentation – We analyze your company structure and identify UBOs
✅ Preparation & Submission of UBO Register – Ensuring timely & accurate reporting
✅ Regulatory Compliance Advisory – Keeping your business compliant with UAE corporate laws
✅ Ongoing UBO Updates & Reporting – Assisting with ownership changes & record maintenance
📞 Need Help with UBO Compliance? Contact NAM Accountants Today!
📧 Email: [email protected]
📞 Call/WhatsApp: +971 52 642 7554
🌐 Website: www.namaccountants.com
