Ultimate Beneficial Owner (UBO) Declaration in the UAE

A UAE company may be owned on paper by individuals, holding companies or several corporate layers. Ultimate Beneficial Owner rules look beyond the immediate shareholder to identify the natural person who ultimately owns or controls the company.

Maintaining accurate beneficial ownership information is an ongoing corporate compliance responsibility. It is not a declaration that should be prepared once at incorporation and then forgotten. Ownership, voting rights, control arrangements and senior management can change, and the company's records must remain current.

What is an Ultimate Beneficial Owner?

Under Cabinet Decision No. 109 of 2023, the beneficial owner is the natural person who ultimately owns or controls a legal person, directly or indirectly, through ownership, voting rights, control or other means.

The analysis generally begins by identifying any natural person who:

• owns 25% or more of the shares or capital;
• controls 25% or more of the voting rights;
• has the right to appoint or dismiss the majority of directors or managers; or
• exercises ultimate control through another arrangement or means.

The Ministry of Economy and Tourism summarises the ownership and control tests in its official beneficial owner guidance.

The UBO must be a natural person

A company can appear as the direct shareholder of another company, but a corporate entity is not the final beneficial owner. The ownership chain must be traced through any number of legal persons or arrangements until the relevant natural person or persons are identified.

For example, if a UAE company is wholly owned by an overseas holding company, the analysis does not stop at the holding company. The company should examine who ultimately owns or controls that holding company.

How to identify the UBO

The fallback should not be used merely because the ownership structure is inconvenient to investigate. The company should take reasonable measures and retain evidence showing how it reached its conclusion.

Example: direct ownership

A UAE company has four individual shareholders holding 40%, 30%, 20% and 10%. The individuals holding 40% and 30% meet the ownership threshold. The other shareholders do not automatically qualify under that test, although control through voting agreements or other arrangements must still be considered.

Example: indirect ownership

A UAE company is owned 80% by Holding Company A and 20% by an individual. Holding Company A is owned equally by two natural persons. Each person indirectly holds 40% of the UAE company through the holding company. The company should trace the structure to those individuals rather than naming only Holding Company A.

Example: control without majority ownership

A founder holds less than 25% of the shares but has contractual rights to appoint most of the directors and determine the company's strategic decisions. The ownership percentage alone may not reflect the actual control position. The arrangement must be reviewed under the control tests.

Joint ownership and multiple UBOs

A company can have more than one beneficial owner. Where natural persons jointly own or control the relevant proportion, the law may treat them as joint owners or controllers. The register should not be limited to a single name merely because a form provides one prominent field.

Which companies must consider UBO requirements?

The rules apply broadly to legal persons licensed or registered in the UAE, subject to exclusions and special regimes in the legislation. Mainland and commercial Free Zone companies should not assume they are exempt merely because of their licensing jurisdiction.

Certain entities, including qualifying listed-company structures, may receive specific treatment. Financial free zones and regulated structures can also be governed by their own frameworks. A company should confirm the position with its licensing authority or registrar rather than relying on a general description.

Information maintained in the UBO register

The beneficial owner register should contain adequate, accurate and current information for every person identified, including:

• full name;
• nationality;
• date and place of birth;
• residential or notification address;
• passport or identity document number;
• country, issue date and expiry date of the identity document;
• the basis on which the person became a beneficial owner;
• the date beneficial ownership began; and
• the date the person ceased to be a beneficial owner, where applicable.

Copies of passports, identity documents, ownership evidence and control agreements should be organised so the conclusion can be supported if the registrar requests clarification.

Other corporate records

UBO compliance should be coordinated with the company's shareholder or partner register and records of directors, managers and nominee arrangements. These records serve different purposes but must not contradict one another.

The shareholder register generally records the legal owners shown in the company's constitutional and licensing documents. The UBO register records the natural persons who ultimately own or control the company. In a simple structure, the names may be the same. In a layered structure, they may differ.

Nominee directors and nominal management members

A person formally appointed as a director or manager but acting according to another person's instructions may fall within the nominee or nominal management provisions. Such arrangements require transparency and should not be used to conceal the true controller.

Relevant persons should disclose the required information to the company, and the company should maintain the appropriate record and notifications within the applicable periods.

When must UBO information be updated?

A legal person must update its beneficial owner register and record a change within 15 days of becoming aware of it. The same principle makes routine monitoring important.

Events that should trigger a UBO review include:

• share transfers or new share issues;
• changes to voting rights;
• changes in a parent or holding company;
• new shareholder or voting agreements;
• appointment or removal rights granted to another person;
• changes to directors, managers or nominees;
• mergers, reorganisations or inheritance events; and
• changes to a beneficial owner's identification or address.

The official text of Cabinet Decision No. 109 of 2023 sets out the register and update obligations.

How UBO details are submitted

The licensing authority or registrar determines the practical filing channel. Information may be collected during incorporation, licence renewal, amendment procedures or through a dedicated declaration service.

Submission to the authority does not remove the company's duty to maintain its own accurate records. Keep the filed declaration, acknowledgement and supporting ownership analysis with the corporate compliance file.

Documents to prepare

• current trade licence and incorporation documents;
• memorandum and articles of association;
• shareholder or partner register;
• group ownership chart showing percentages at every level;
• official extracts for corporate shareholders;
• passports or identity documents of identified natural persons;
• proof of residential address where requested;
• shareholder, voting, nominee or control agreements;
• board and management appointment documents; and
• the reasoning used to identify each beneficial owner.

Common UBO mistakes

• naming the immediate corporate shareholder instead of tracing to natural persons;
• listing every shareholder without analysing the legal tests;
• considering ownership percentages but ignoring voting and appointment rights;
• recording only one UBO where several persons qualify;
• using the senior-manager fallback without reasonable investigation;
• failing to document indirect ownership calculations;
• allowing the register to conflict with licence or shareholder information;
• forgetting to update identification documents or addresses;
• missing the 15-day update period after a known change; and
• assuming a Free Zone company is automatically outside the rules.

Why accurate UBO records matter

Beneficial ownership information supports corporate transparency and UAE anti-money laundering controls. Licensing authorities can request records, inspect compliance and apply the administrative measures provided by law.

Accurate UBO data also supports bank onboarding, tax registrations, audits and corporate transactions. Inconsistent ownership information supplied to different institutions often results in additional questions and delays.

Review your company's beneficial ownership position

Al Shamil Zone Business Men Services can help map the ownership chain, organise supporting records and prepare the information required for a UBO declaration or update. Complex structures or disputed control arrangements may require separate legal advice.

Need assistance reviewing your company records? Call +971 4 408 1900, contact us through WhatsApp at +971 50 777 5554, or email info@shamilservices.ae.

This article provides general information and is not legal advice. Beneficial ownership treatment depends on the company's structure, control arrangements, licensing jurisdiction and current legislation. Confirm the applicable requirements with the relevant registrar or a qualified adviser.