Ultimate Beneficial Ownership in the UAE: New Compliance Requirements for 2024–2025

As part of its broader strategy to increase corporate transparency and align with international anti-money laundering standards, the UAE introduced new Ultimate Beneficial Ownership (UBO) regulations under Cabinet Resolution No. 109 of 2023 and Cabinet Decision No. 132 of 2023. These regulations impose detailed disclosure and compliance obligations on mainland and non-financial free zone companies operating in the UAE.

What Is a UBO and Who Must Comply?

An Ultimate Beneficial Owner is a natural person who ultimately owns or controls 25% or more of a company’s capital or voting rights. Companies must identify and disclose their UBO to the licensing authority through:

• A Real Beneficiary Register (RBR)

• A Partners or Shareholders Register (PSR)

Entities must report changes within 15 days, and failure to comply may lead to penalties, license suspension, or blacklisting. Exemptions apply to:

• Government-owned companies

• Financial free zones such as DIFC and ADGM

Risk-Based Approach and Registrar's Authority

The Registrar may apply a risk-based evaluation if ownership structures involve:

• Offshore holding entities

• Nominee shareholders

• Family-owned trusts

In such cases, the Registrar can demand further disclosure, ensuring enhanced regulatory oversight in complex corporate setups.

Confidentiality and Data Protection

UBO information remains confidential and cannot be shared without the UBO’s consent, unless legally required by a judicial or regulatory authority.

Consequences of Non-Compliance

Administrative penalties may include:

• Written warnings

• Monetary fines

• Temporary suspension or cancellation of trade licenses

Conclusion

With these enhanced UBO obligations, the UAE demonstrates its commitment to financial transparency and responsible governance. Businesses must ensure timely and accurate reporting to avoid disruption and maintain credibility with stakeholders.