Ultimate Beneficial Owner (UBO) in the UAE: Global Compliance Guide

Ultimate Beneficial Owner (UBO) in the UAE: Global Compliance Guide

Introduction 

In recent years, the UAE has taken significant steps to enhance transparency and align with international compliance standards. One of the most important regulations in this regard is the Ultimate Beneficial Owner (UBO) declaration. Whether you are a new investor or already running a company in the UAE, understanding the UBO framework is essential to stay compliant and avoid penalties.

This guide will walk you through what UBO means, why it is mandatory, and how businesses in the UAE can ensure proper compliance.

What is an Ultimate Beneficial Owner (UBO)?

An Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns or controls a company, directly or indirectly. In simple terms, it is the person who benefits the most from the company’s operations or holds significant ownership rights.

According to UAE Cabinet Resolution No. (58) of 2020:

• A UBO is any individual who owns or controls at least 25% of the company’s shareholding.
• If no person meets the 25% threshold, the UBO is the individual who exercises control through other means (e.g., voting rights, decision-making power).
• In the absence of both, the UBO will be considered as the senior management official of the company.

Importance of UBO in the UAE

The UBO framework was introduced to strengthen the UAE’s commitment to combating money laundering, terrorist financing, and tax evasion, while improving corporate governance.

Key reasons:

• Regulatory compliance - Ensures companies meet international and UAE-specific anti-money laundering (AML) obligations.
• Transparency - Builds trust with regulators, banks, and international partners.
• Avoiding penalties - Non-compliance with UBO requirements can result in significant fines and administrative sanctions.
• Global credibility - Aligns UAE businesses with international financial standards, making cross-border transactions smoother.

Who needs to file a UBO declaration?

Almost all onshore and free zone companies in the UAE must submit UBO information to their respective licensing authorities. All UAE Companies must submit and maintain accurate UBO details in line with Cabinet Resolution 109 and Decision 132.

Exceptions include:

• Companies in UAE financial free zones (e.g., DIFC, ADGM) – as they have separate regulations.
• Companies owned directly by the UAE federal or local government.

What is required to file a UBO?

To comply with UBO regulations, businesses must maintain and submit a Register of UBOs containing:

• Full name, nationality, and date of birth of the UBO
• Residential address and contact details
• Passport/Emirates ID copy
• Date on which the individual became a UBO
• Reason why the individual qualifies as a UBO

How to Maintain UBO Compliance in the UAE?

Complying with UBO requirements is not a one-time activity, it is an ongoing responsibility for all UAE-registered companies. Here are the key steps to ensure continuous compliance:

• Keep records updated: Always update UBO details whenever there are changes in ownership, shareholding, or management.
• File timely notifications: Any changes in beneficial ownership must be reported to the relevant authority within the prescribed timelines.
• Maintain proper documentations: Ensure all UBO information, supporting IDs, share certificates, and agreements are stored securely and readily available for inspection.
• Annual review: Conduct regular internal audit of your company’s ownership structure.
• Internal policies: Implement robust corporate governance and compliance policies to avoid oversight.

Consequences of Non-Compliance

Failure to submit or maintain accurate UBO details can result in:

• Administrative fines (depending on the violation)
• Restrictions on business activities
• Reputational damage, making it harder to work with banks and regulators

Conclusion

The Ultimate Beneficial Owner regulations are a critical part of doing business in the UAE today. For investors and companies, proper UBO compliance not only avoids penalties but also strengthens corporate credibility and transparency. By partnering with experts like CLA Emirates, businesses can confidently navigate compliance requirements and focus on building long-term success.

How CLA Emirates Can Support You?

At CLA Emirates, we understand the complexities of compliance regulations like UBO and AML. Our experts assist businesses in:

• Identifying and verifying the Ultimate Beneficial Owner(s).
• Preparing and maintaining UBO registers in line with UAE law.
• Filing UBO declarations with the relevant licensing authority.
• Offering ongoing AML and compliance support to reduce risk exposure.

With our guidance, you can ensure your company remains compliant while focusing on growth.