September 8, 2021Dated: | Byadmin admin | The Ultimate Beneficiary Owner is an individual who, indirectly or directly, owns and controls a company. Individuals with an ownership of minimum 25% shares or voting rights of a company, or a person with an authority to dismiss and appoint a majority of a company’s directors is considered as an Ultimately Beneficiary Owner. In simpler terms, an ultimate beneficial owner (UBO) is a person who is the ultimate beneficiary of a company. In the last few years the battle against money laundering and terrorist financing has been vigorous and strict measures has been taken by the authorities to ensure financial transparency in business ownership. Some businesses takes advantage of sophisticated corporate arrangements to launder money, commit financial fraudulent activities ,finance terrorism, evade taxes or cover up their black income or wealth. Such corporate arrangements involves complex ownership structures to conceal the actual identity of politically exposed persons (or PEPs), sanctioned entities, terrorist outfits and other criminals. Such illegal malpractices ascended the need for UBO legislation across the world. The UAE followed the same practice by issuing the UBO Regulations, which will alleviate the risk of financial fraud by having companies identify the ultimate individual that will benefit from the activities of such companies. A new regulation of declaring Ultimate Beneficiary Owner has been announced by the UAE authorities to guarantee financial transparency in multiple layers of ownership in order to combat money laundering and terrorist financing. The Ultimate Beneficiary Owner Regulations applies to: Mainland (or onshore) companies (the Mainland Companies)Non-financial free zones incorporated companies The financial free zones of Dubai International Financial Centre (DIFC) and Abu Dhabi Global Markets (ADGM) have their own set of regulations on UBOs. Hence, such companies are not affected by the UBO Regulations. Under the UBO Regulations, a company must maintain the following: Register of UBOs Register of nominee directors/managers:Register of shareholders The administrative penalties will be imposed upon the Mainland Companies and Non-Financial Free Zone Companies who fails to comply with the UBO Regulations or do not submit their UBO information to corporate regulators. The Ministry of Economy will be imposing fines of upto AED100,000 from July 2021 onwards on those companies who do not present their UBO information by June 30, 2021. FlyingColour Group has the thorough compliance mechanism, forms and information to help you with gathering your company’s UBO information. We can also assist you to recognize and compile the information required to be disclosed along with the register. For further guidance in relation to the UBO resolution, please contact us at info@flyingcolour.com or contact us at +971 4 4542366.