Ultimate Beneficial Ownership (UBO) is a natural person who owns or controls a company, trust, or legal entity, and benefits from its assets and profits. It is the real person behind a legal entity, who ultimately exercises control over the entity, whether directly or indirectly.

Objective of Ultimate Beneficial Ownership

In the UAE, companies are required to disclose their ultimate beneficial ownership information to relevant authorities as part of the government's efforts to combat money laundering, terrorist financing, and other illicit activities. The Regulations require companies licensed or registered in mainland UAE or one of the commercial-free zones to create and maintain a register of their ultimate beneficial owners and to submit UBO information to the Registrar.

The objective of the Regulations is to regulate the requirement for corporate entities to maintain registers listing

• the UBOs
• the partners or shareholders of a company
• where applicable, nominee directors.

The regulatory authorities require companies to maintain accurate and up-to-date records of their UBOs, which should include details such as the individual's name, nationality, address, and percentage of ownership. The disclosure of UBO information is important for transparency and accountability and helps prevent the misuse of companies for illegal activities. It also helps financial institutions and other businesses to assess the potential risks associated with their clients and business partners, and take appropriate measures to mitigate those risks.

What are the Exceptions of Ultimate Beneficial Ownership?

The Regulations do not apply to companies that are directly or indirectly wholly owned by the federal or local government or their subsidiaries, as well as companies that are registered in the financial free zones in the UAE, namely the Abu Dhabi Global Market and the Dubai International Financial Centre.

Ultimate Beneficial Owner (UBO) Declaration

The Regulations define UBOs as:

• Whoever owns or controls, through direct or indirect ownership, at least 25% of the entity’s shares or whoever has a voting right of at least 25 percent of the shares.
• If no UBO is identified in accordance with the above, or there is any doubt that any natural person identified as a UBO is the true UBO, the natural person who exercises control over the entity through other means will be considered as the UBO.
• If none of the conditions above are met, then a natural person who is responsible for the senior management of the entity will be considered as the UBO.

The requirement to maintain a register of UBOs does not apply to entities that are owned by:

• Company listed on a recognized stock exchange that is subject to disclosure requirements that ensure sufficient transparency of its beneficial owners;
• Company wholly owned by such a listed company. The Regulations do not provide further information on recognized stock exchanges.