UAE Updates Economic Substance Regulations
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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 applies to all companies licensed in the UAE, other than:
Companies licensed in the UAE which are ultimately listed on a market that provides for robust transparency rules on Real Beneficial Owners are exempt from certain of the requirements in the New Cabinet Decision.
The New Cabinet Decision mandates that companies licensed to carry on business in the UAE 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 controls the licensee, whether directly or indirectly, through at least 25% of the capital.
Licensees in the UAE are required to have created a Register of Partners (or Shareholders) and a Register of Real Beneficial Owners by 27 October 2020. The New Cabinet Resolution also requires that each licensee submits the information from its Register of Partners (or Shareholders) and Register of Real Beneficial Owners to its competent licensing authority by 27 October 2020, although at the time of writing it is not clear whether that will be possible to do in practice. The competent licensing authorities are under an obligation to maintain the confidentiality of information submitted to them under the New Cabinet Decision.
Companies licensed in the UAE which are ultimately listed on a market that provides for robust transparency rules on Real Beneficial Owners are exempt from certain of the requirements in the New Cabinet Decision.
The New Cabinet Decision reflects a continued drive towards more transparency and cooperation both within the UAE and internationally by introducing provisions allowing for the exchange of information on Real Beneficial Owners.
Clyde & Co's Corporate Group can provide further advice on these developments, and our Company Secretarial team can assist in maintaining and filing statutory registers. Please email Ben Smith or your usual Clyde & Co contacts for more information.
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