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UAE Regulations Relating to Beneficial Owner Procedures

UAE Regulations Relating To Beneficial Owner Procedures

The UAE government issued the Beneficial Owner Procedures (BOP) on 24 August 2020. The bill was passed as a cabinet decision and mainly deals with:

  • licensing and registration of legal persons (legal structures and companies), 
  • registration of ultimate beneficial owners (UBOs), 
  • Registration of nominee board members (NBMs), 
  • registration of partners/shareholders and confidentiality.

These rules apply to all the companies (even offshore companies) established in the UAE and those formed in the commercial free zones, except for companies established in financial Free Zones and wholly owned by the local or federal government. The rules are also not applicable to wholly-owned subsidiaries of these companies.

Changes made to licensing and registration of companies according to Beneficial Owner Procedures (BOP)

BOP declares that:

  • a company may not be licensed or registered under a trade name that is previously registered,
  • a company may not be licensed or registered under a trade name similar to an already existing name (to avoid confusion between the two registered commercial names).

While registering for the company or trade names, the owners are obliged to provide the following basic documents for the government authorities:

  • Name, legal form and memorandum of association (MoA) and articles of association,
  • The principal address of the company, 
  • In the case of a foreign company, the name and address of the company’s legal representative in the UAE,
  • Credible IDs of the persons holding higher authorities in the company.

 

 

There are also persons in charge of companies (UBOs) subject to the changes put into force by BOP. UBOs who are both directly or indirectly involved in the management of a company can be categorized as follows: 

  • persons managing the chain of ownership,
  • persons in charge of appointing or dismissing directors of the company,
  • persons holding at least more than 20% to 25% of the company shares and/or voting rights of the company,
  • companies conducting transactions on behalf of the UBOs.

Also, suppose there are no particular persons declared as being in charge of a company or business, then the highest authority in a business or company is regarded as a UBO. In this case, the documents that should be provided for the authorities are:

  • Name, nationality, date, and place of birth provided by a credible ID,
  • Address,
  • Number on the identity card, the country of issuance, date of issuance, and date of expiry proved by a valid ID,
  • Date of being appointed as the UBO,
  • Qualifications based on a which the UBO position was granted to the appointed person,
  • If applicable, the date on which a person ceased to be the UBO.

The registration of a company must be issued within 60 days of incorporation. A company established in the UAE on a recognized stock exchange does not require to go through the traditional registration procedure. The changes imposed by the company can be put into force within 15 days of becoming aware of the relevant changes. In the case of companies, the registrar, the name, and other particulars of the UAE resident is expected from authorities. 

Documents expected to be provided by Nominee Board Members (NBM) for their registration 

Higher authorities appoint a Nominee Board Member (NBM) in a company. An NBM is expected to inform the company managers of their capacities within 15 days upon the request. Those appointed before 24 August 2020 must notify the company of their capacity within 30 days upon the request. The following data and documents are expected to be provided:

  • Details of shares held and voting rights,
  • Date on which the NBM is appointed and was qualified of making the declared decisions in the company,
  • Full name, nationality, address, place of birth, and other details of employer, provided and validated by a copy of the ID.

If the NBM is a corporate partner or shareholder, all the above data is provided at the time of registration and licensing of a company. The NBM should declare any changes in the above data provided within 15 days to the company. In the case that the NBM resigns, the company should announce within 15 days of withdrawing the post. 

Registration of company partners and shareholders 

Similar to the previous posts, company shareholders and partners are required to provide the companies with the following documents to be registered legally: 

  • Details of shares held and voting rights by the company shareholder/partner, 
  • The date on which the partner or shareholder acquired the declared position, 
  • Full name, nationality, address, place of birth, and details of employer validated through a copy of a credible ID, 
  • the time of registration and licensing of a company, if the appointed position is assigned naturally, 
  • Data of partners or shareholders (if applicable) declaring their position as trustor or NBM of the company, 
  • Data of persons represented by any trustee or NBM.

If there are relevant changes, the company can proceed with the modifications within 15 days. The registrar should be provided with the data contained in the register of partners and shareholders and additional relevant information if applicable.

How Can Choose UAE Help

As an official partner of UAE Government Authorities, our clients benefit from fast, efficient, and seamless processes. With our wide range of business support services including PRO services, you can benefit from our Government relations officer that will cater to your needs and provide A-Z documentation for your business. Contact us for more information.

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