Complying with the Ultimate Beneficial Ownership (UBO) regulations is one of the critical requirements for companies registered in the UAE. The UBO is an individual who ultimately owns or controls the entity or any other indirect means on whose behalf the transactions are being conducted or who exercises ultimate control over a legal person.
The UBO regulations have been implemented in the UAE to control and prevent crimes related to money laundering and financing of terrorism (ML/FT). Failing to declare the UBO to the regulatory authority will attract hefty penalties.
UBO consultants in Dubai can help you identify the UBO and declare it to the authority as per the regulatory requirements. In this blog, you can learn why identifying UBO is necessary for running a business in Dubai:
Ensure Regulatory Compliance
As per Cabinet Decision, No. 58 of 2020, companies registered with offshore, free zone and mainland authorities in the UAE are required to disclose the details of their real beneficiary owner to the regulatory authorities.
The Cabinet Decision defines the UBO as “whoever person that ultimately owns or controls, whether directly through a chain of ownership or control or by other means of control such as the right to appoint or dismiss the majority of its Directors, 25% or more of the shares or 25% or more of the voting rights in the Legal Person.”
Providing accurate and up-to-date information on UBOs ensures compliance with reporting requirements and facilitates regulatory oversight. Meeting the UBO compliance requirement may appear complex, but you can hire providers of UBO compliance services in Dubai to navigate it.
UAE Economic Substance Regulations
The UAE has introduced Economic Substance Regulations (ESR), requiring entities conducting relevant activities to demonstrate economic substance in the country. Identifying the UBO is crucial for determining whether a business meets the substance requirements and complies with the regulations.
Corporate Governance
Identifying the UBO promotes corporate governance by ensuring transparency and accountability within companies. It helps prevent conflicts of interest, related-party transactions, and other governance issues that may arise when the true owners or controllers of a business are not disclosed.
Compliance with International Standards
The UAE is committed to aligning its regulatory framework with international standards and best practices, including those set by organizations like the Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development (OECD). Identifying UBOs is in line with these standards and demonstrates the UAE’s commitment to combating financial crimes on a global scale.
Enhanced Due Diligence
Identifying UBOs enables businesses to conduct enhanced due diligence on their customers, suppliers, and business partners. This is particularly important in sectors such as banking, finance, and real estate, where there is a higher risk of money laundering and illicit financial activities.
Investor Confidence
Transparency in ownership structures enhances investor confidence and attracts investment to the UAE. Investors, both domestic and international, prefer to invest in companies with transparent ownership structures and robust governance practices.
Prevention of Financial Crimes
Identifying UBOs helps prevent the misuse of businesses for illicit purposes, such as money laundering, terrorist financing, and corruption. By knowing who ultimately benefits from the business’s activities, authorities can better detect and disrupt criminal activities.
Hire the Best UBO Compliance Services in Dubai, UAE
As the UAE is stringently enforcing AML-related compliance requirements such as the UBO, companies should tread the waters carefully. Non-compliance may lead to hefty penalties, suspension of trade license and reputation damage. An efficient way to navigate the complex system of Uno compliance is to seek the advice of the best UBO consultants in Dubai such as Jitendra Business Consultants (JBC). We are one of the leading providers of UBO services in Dubai with a reputation for saving our clients from hefty penalties.
JBC has a team of UBO advisers in Dubai who have in-depth knowledge of the UBO compliance landscape. Our consultants can advise the companies on the creation of UBO registers, record-keeping, and maintenance of UBO registers. If any penalty is incurred, JBC can appeal on behalf of the clients. Business owners who are confused about UBO compliance requirements can consult with our UBO advisors in Dubai.
