How to Ensure Compliance with UBO Filing Requirements in the UAE?
Companies operate in a highly regulated business environment in the United Arab Emirates. For all companies in UAE, one of the important requirements is meeting the Ultimate Beneficial Ownership (UBO) requirements. Non-compliance will attract huge fines and penalties, affecting the business’s reputation and operations. Many business organisations face problems and are often at risk for non-compliance due to unmet requirements.
This guide simplifies steps to ensure compliance with filing requirements on UBOs in the UAE. To meet the legal obligations as well as avoid penalties for non-compliance, businesses can observe clear processes and stay organised with the steps.
Jitendra Chartered Accountants, JCA, is your best solution to compliance issues in the UAE, whether it’s UBO or any other business regulation.
What Is UBO and Why Is It Important?
A UBO is simply an individual who owns or exercises control over more than 25% of a corporation’s shares or has decisive influence over the company. All companies in the UAE are required to comply with UBO regulations.
Criminals often use complex ownership structures to hide their identities. Determination of UBOs protects businesses from any illegal dealings associated with their activities. It also increases transparency, thus building trust among various stakeholders.
What is the Legal Framework to Comply with UBO?
A number of laws have been implemented within the UAE to regulate UBO requirements, such as:
- Cabinet Decision No. 109 of 2023: It specifies UBO filing procedures and replaces older laws.
- Cabinet Resolution No. 132 of 2023:Detailing penalties for not following the UBO procedure.
These regulations oblige a business to identify their UBOs, record this information accurately, and update their filings in time to comply with the law.
Steps to Ensure UBO Compliance
Gather Legal Paperwork for your Company/Organization
Obtain the following necessary corporate documents
- Articles of incorporation
- Memorandum of association
- Trade licenses
- Shareholder lists
- This information helps identify individuals who own or control at least 25% of the company.
3. Verify UBO Information
Verify the UBO’s identity using reliable methods, such as:
- Shareholding
- Control
- Nominee
- Reviewing government-issued ID documents
Keep Correct Records
Business enterprises must maintain a UBO register and real beneficiary owner register that includes;
- Details and names of UBOs
- Ownership or control changes
- Verification documentation
- Latest contact details
Update Information Periodically
Keep monitoring and updating the UBO records anytime there is a change in ownership, management, control, or contact details. This ensures constant compliance and prevents fines.
Audit and Review
Regular reviews of your UBO records and processes ensure their completeness, accuracy, and conformity with the regulatory requirements.
Effective Management of UBO Records
UBO records must be clear and organised. This includes:
- Document Retention: Retaining records for the stipulated period under the UAE laws.
- Change Management: Tracking and documenting any changes to UBO information.
- Audit Preparation: Maintaining a comprehensive UBO register to aid in both internal and external audits.
Advantages of UBO Compliance
Compliance with UBO reduces risks on the following grounds:
- Reducing chances of penalty and lawsuits.
- Also, it improves stakeholder confidence and transparency.
- General corporate governance is powered.
Why Choose Jitendra Chartered Accountants?
It’s not complicated to meet UBO requirements (or any other law) for any sort of business if management, understanding of the law, and approach is correct. JCA helps businesses in updating their records, conducting regular audits and leveraging technology to smoothen the entire process. This not only ensures compliance but also positions your business as a trusted and responsible entity. Take the best advice from expert consultants at JCA.