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Main Points 

1. The New Decision shall apply to all licensed legal persons in the State including the free zones and shall not apply to: 

(a) Companies wholly owned by the Federal or Local Government, or their subsidiaries. 

(b) Financial Free Zones

(c) Governmental Partner

A Governmental Partner is defined as a federal or local government that contributes or owns shares in the company.

2. The New Cabinet Decision requires all companies or legal persons licensed or registered in the UAE to maintain a Register of Real Beneficial Owners, a Register of Partners or Shareholders and a Register of Nominee Management Members.  

3. The disclosure requirements for companies in the mainland and free zones remain the same as in the precious Cabinet Decision. 

4. The New Cabinet Decision introduces the term Nominal Board Member and defines this as a natural person acting in accordance with the directions or instructions will of another person and holds a position in the legal person and represents the shareholders or any other relevant entities. The register of Partners or Shareholders shall include the details of the Nominal Board Member.

5. The New Cabinet Decisions appoints a Registrar who is defined as the Authority having competence to supervise the trade names register for the various types of establishments registered in the State. To identify the Beneficial Owner, the Registrar is authorised to take into account a risk-based approach in the case of Complex Structures of a legal person.

6. The Registrar shall also ensure that the legal person within its jurisdiction is not misused for the purposes of money laundering and financing of terrorism crimes.

7. A Supreme Committee is set up to supervise the national strategy on anti-money laundering and combating the financing of terrorism.

8. The Ministry and the Registrar are prohibited from disclosing information about the Beneficial Owner or the register of partners or shareholders and making them available to any person, unless they obtain written approval from the Beneficial Owner or the nominal management member.

The Real Beneficial Owner

Similar to the previous one, the New Cabinet Decision defines the Beneficial Owner of a legal person as a natural person who owns or ultimately controls the company, directly or indirectly with at least 25% or more of the capital in the legal person. 

If there are no natural persons as stated above or in case of a doubt, the natural person exercising control over the legal person through other means is the Beneficial Owner.

And if all means have been exhausted and no natural person with ultimate control has been identified, the natural person holding the position of Senior Management officer shall be deemed to be the Beneficial Owner.

Administrative Penalties

Cabinet Decision No. 132/2023 On the Administrative Fines to be Imposed on the Offenders Violating Cabinet Decision No. 109/2023 Regulating the Real Beneficiary Procedures was issued on 15th December 2023 replacing Cabinet Decision No. 53/2021.

In the event of a violation of the provisions of the New Cabinet Decision, the Registrar may impose one or more penalties from the list of administrative penalties issued by this Decision. 

The Penalties vary from a Written Warning Notice to the legal person requiring to adjust their situation within 30 days of receiving the said notice to fines payable upto an amount of AED 100,000/-. 

A grievance with the Registrar to the Grievances Committee on the administrative penalties imposed may be filed by the person concerned and within (30) thirty days from the date of notification may submit a request to stop the implementation of administrative penalties. The Committee shall decide on this request within (45) forty-five working days in accordance with the procedures.

- Deepa Suresh| Senior Legal Consultant 

This article does not constitute legal advice and should not be relied upon as such. For any further information or any queries, please contact our Corporate Commercial Department by clicking here.