Under Cabinet Resolution No. (109) of 2023 on Regulating the Procedures of the Beneficial Owner, a beneficial owner in the UAE is any natural person who ultimately owns or controls, directly or indirectly, 25% or more of a legal person's capital or voting rights. A legal person must create a beneficial owner register within 60 days of the resolution's publication or of its own formation, and update that register within 15 days of any change.
The Ownership or Control Threshold That Makes a Person a Beneficial Owner
The resolution sets the core test for identifying a beneficial owner, providing that "the beneficial owner of a legal person is anyone who ultimately owns or controls a legal person, through direct or indirect ownership interests or shares of twenty-five percent (25%) or more of the legal person's capital, or who holds voting rights therein of twenty-five percent (25%) or more, including holding such ownership through a chain of ownership or control or through control by any other means such as the right to appoint or remove a majority of its directors." If no natural person can be identified under this test, the beneficial owner is the person who exercises actual control by other means, and failing that, the beneficial owner is the senior management official.
Deadline to Create and Update the Beneficial Owner Register
The resolution requires the legal person to keep the details of each of its beneficial owners in a register it creates "within sixty (60) days from the date of publication of this resolution or from the date of its existence," and to update that register and record any change "within fifteen (15) days from the date it becomes aware of it." The register must include the full name, nationality, date and place of birth, place of residence, passport or ID number, the basis on which the person became a beneficial owner, and the date that status was acquired.
The Register of Partners or Shareholders and Nominee Directors
In addition to the beneficial owner register, the resolution requires the legal person to keep a separate register of partners or shareholders, updated within 15 days of any change. Anyone acting as a nominee director must also notify the legal person of that status and provide their details within 15 days of acquiring that status, or within 30 days if they acquired it before the resolution's publication.
Providing Data to the Registrar and Administrative Penalties
The legal person must, within 60 days of the resolution's publication or of its own registration or licensing, submit the data of its beneficial owner register and its partner or shareholder register to the competent registrar, and provide any additional data the registrar requests within 14 days of the request. Where a violation of the resolution occurs, the registrar may impose one or more penalties from the schedule of administrative penalties issued by Cabinet decision, and any interested person has the right to grieve against the penalty before the registrar's grievances committee within 30 days of notification.
Legal References
- Cabinet Resolution No. (109) of 2023 on Regulating the Procedures of the Beneficial Owner — Article (5), Article (8), Article (9), Article (10), Article (11), Article (18), Article (19).
For questions about your specific situation, you can ask the UAE Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.