The law will require entities to send copies of their registers off to the relevant registrars and licensing authorities and keep them updated to accommodate changes as and when necessary. The consequences for the holdings of HNW investors in the UAE are obvious.

The reporting deadline for all registers is 60 days from the date on which the Government published its decision, that is by 27 October, or at the time of the incorporation/registration of a new entity. Firms must report changes (by updating their registers and telling the authorities) within 15 days.

For the purposes of these "registers of real beneficiaries," a real beneficiary shall be the following.

• Whoever owns or ultimately controls (through direct or indirect ownership) at least 25% of the share capital of the entity in question, whoever holds 25% or more of the voting rights, or whoever has "ownership powers" through any other means (i.e. the right to appoint or dismiss most of the managers).
• If no real beneficiary fits these criteria, or if there is any doubt over who has final controlling say, the human being who exercises control over the entity through other means shall qualify.
• If no human being can be found, the real beneficiary shall be whoever holds the position of the person in charge of senior management.

There can be more than one real beneficiary in an entity, so if several people participate in the ownership or control, they shall all be dealt with as owners and controllers.

In its Register of Partners and Shareholders, an entity will be obliged to keep the details of the respective partners and shareholders (and "nominal managers"), as set out in the decision, and update the register with any change in 15 days.

Nominee directors to be registered - a new departure

A nominal manager, being “any physical person acting on the instructions of another person,” must notify the entity of his nominal status and submit all the necessary data required in respect of the Register of Partners and Shareholders within 15 days of his appointment, or 30 days from the date of the Cabinet decision. He must similarly inform the entity of any change to his information or status within 15 days of the occurrence.

Entities in a regulated market, in a state of dissolution or liquidation are subject to adjusted reporting requirements under the decision.

Any case of a violation of the provisions of the decision can result in the Minister of the Economy or the licensing authority in question imposing sanctions.

* Rima Mrad can be reached on +971 4 368 5555 or at Rima.mrad@bsabh.com; Bradley Moran can be reached on the same number or at Bradley.moran@bsabh.com