Who is an Ultimate Beneficial Owner in Dubai?

An Ultimate Beneficial Owner is a person that is the leading beneficiary when an establishment originates a transaction. Who comprises a UBO will vary from jurisdiction to jurisdiction, but it is usually defined as a specific person that has capital or voting privileges in the base entity.

Generally, this is the person that owns or manages their own company.

To identify UBOs, a bank will:

• Obtain and review the organisation’s credentials
• Look at the chain of ownership
• Determine who falls under the definition of UBO
• Perform an AML or KYC check

To stay compliant with UBO regulations, you must register your UBOs. Article five of the UBO Regulations provides an outline for how you can determine who your UBO is (before the bank does).

Your UBO needs to have the right to vote, own, or control with a minimum of 25% shareholding in the company. This is through direct or indirect means of ownership. They also may have the right to dismiss or appoint directors and managers within the company.

If no one satisfies these requirements from your company, then the UBO is anyone else that exercises the main control over the company. If there is still no sure answer, the UBO would be the person in charge of senior management.

Next, the company must have a register of nominee directors and managers. This register needs to be detailed about the individuals nominated and must contain information about acting on behalf of a third party’s instructions.

The company must also have a register of shareholders. This will include the number of ownership interests that each shareholder in the company owns. It will also explain the voting rights of each party and the date that these rights were acquired.

This information will help ensure that you’re selecting the correct UBO before you register. It also helps you stay compliant with the new laws, as well as the Commercial Companies Law.

Regulators have been targeting money laundering and terrorism financing in the past couple of decades. Some defrauding groups use off-shore accounts to conceal their financial activity.

Investigators trace any transactions that seem suspicious. They often lead to fake addresses, fictional PO boxes, or the addresses of people that have no involvement. Due to this, UBO regulations have started to appear across the world, including in the UAE.

Every company has a specific risk with these issues, so it’s crucial to take measures that mitigate the risk! The UAE requires that Ultimate Beneficial Owners are registered so that transactions are transparent across all free zone and mainland operating companies.

These regulations are in place to ensure that you know who you are doing business with, avoid criminal transactions, and stay within the confines of UAE law.