On 24 August 2020, the UAE Cabinet published Cabinet Decision no. 58/2020 on the Regulation of Procedures related to Real Beneficiaries (the “New Cabinet Decision”). The New Cabinet Decision requires companies licensed to carry on business in the UAE to maintain a Register of Partners (or Shareholders) and a Register of “Real Beneficial Owners”. 

A “Real Beneficial Owner” is defined as the individual that ultimately owns and or controls the licensed UAE company, whether directly or indirectly, through at least 25% of its capital.  

What does this mean? 

• Most companies licensed to operate in the UAE will be required to create and maintain a Register of Real Beneficial Owners and a Register of Partners (or Shareholders) by 26 October 2020.
• According to the New Cabinet Decision, new and existing companies are required to submit these registers to the Department of Economic Development of the relevant Emirate (“DED”).
• Under the New Cabinet Decision, the competent licensing authorities are under an obligation to maintain the confidentiality of information submitted to them.

The  New Cabinet Decision applies to all companies licensed in the UAE, except for the following: 

• companies in financial free zones (Abu Dhabi Global Markets and Dubai International Financial Centre), which have their own rules in this regard. For example, Abu Dhabi Global Markets has issued requirements in this regard and which are aligned with the New Cabinet Decision.  
• companies which are wholly owned, directly or indirectly, by federal or Emirate government; and 
• companies licensed in the UAE which are ultimately listed on a market/exchange are exempt from certain of the requirements in the New Cabinet Decision, as they are subject to robust transparency rules on Real Beneficial Owners. 

Although the New Cabinet Decision specifies that penalties may be applicable for failure to comply, such penalties have not been confirmed by the authorities yet.  However, the MOE has confirmed that the Cabinet of Ministers may upon the recommendation of the Minister of Economy issue a new cabinet decision with the various penalties in this regard.  As of today, this has yet to be issued. 

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