Notice on the Regulations of the Procedures of the Real Beneficiary

The UAE Ministry of Cabinet Affairs issued the Cabinet Resolution No. 34 of 2020 on the regulation of the Procedures of the Real Beneficiary (“Resolution”), which came into effect on 28 August 2020 (“Commencement Date”). The Resolution introduces the concept of a “Real Beneficiary” into the onshore business environment.

Who Does it Apply to?

The Resolution applies to all UAE entities, apart from those registered in the Abu Dhabi Global Market, Dubai International Financial Centre or those whose shares are listed on a stock exchange.

Who is the “Real Beneficiary”?

Under the Resolution, the Real Beneficiary is:

Level 1:

A natural person (“Owner/Controller”) who has the ultimate ownership/control/right to vote over a UAE business (“Company”), directly or indirectly (through a chain of ownership/control) concerning at least 25% of the Company; or

A natural person who has the right to appoint/dismiss the majority of the directors of the Company;

Level 2:

In absence of the above, a natural person who manages or administers the Company;

Level 3:

In absence of the above, a natural or a legal person who is the senior manager of the Company.

Who is a Board Nominal Member?

The member who acts in accordance with the guidelines, instructions or will of another person.

What do You Need to do Next?

Under the Regulation, by 27 October 2020, the Company shall produce, update and keep at its office premises (and share with relevant authorities when required) the register (“Registers”) of:

• Real Beneficiaries;
• partners/ shareholders;
• senior managers; and
• board nominal members (nominee directors).

Your business is required to:

• keep the Registers at the registered office and take reasonable measures to preserve them from damage, loss or perish, and to update the Registers within 15 days from the occurrence of a circumstance that requires the update to be made; and
• submit all the information in the Registers with their relevant corporate registrar office upon the request (e.g. incorporation, license renewal/amendment);

If you require assistance with the preparation of these Registers or any other related matters, please let us know and we will be happy to provide our support.