Beneficial Ownership Transparency in the UAE: What DNFBPs Must Know

Introduction

In the world of AML compliance, few areas attract as much regulatory attention as Beneficial Ownership.

Whether you're a real estate brokerage, law firm, gold trader, or corporate service provider in the UAE, identifying and declaring the Ultimate Beneficial Owner (UBO) is a legal obligation, not a formality.

But what exactly qualifies someone as a UBO? What do inspectors actually ask for during audits? And how do you manage UBOs when your client has dozens, or even thousands, of shareholders?

Let’s break it down.

What Is a UBO and Why It Matters

The Ultimate Beneficial Owner (UBO) is the real person who ultimately owns or controls a customer, even if that ownership is layered under companies, trusts, or nominee arrangements.

The UAE defines a UBO under Cabinet Resolution No. (58) of 2020, which requires all legal persons (except those fully government-owned) to identify, document, and declare their UBOs.

UBO transparency matters because:

• Criminals often hide behind complex ownership structures to obscure control.
• Regulators need to see who’s really benefiting from transactions.
• Failure to disclose UBOs can result in heavy fines or license suspension.

UBO Declaration Requirements in the UAE

All UAE-registered entities (excluding government-owned) must:

• Identify UBOs who directly or indirectly own ≥25% of shares, voting rights, or control.
• If no individual meets the 25% threshold, identify anyone with control or significant influence.
• Maintain a UBO Register and keep it updated.
• Submit UBO details to the Ministry of Economy via the goAML and ESR portals.

What AML Inspectors Typically Ask About UBOs

During inspections or audits, expect questions like:

• “Who is the UBO of this corporate client?”
• “Can you show the ownership chain down to the natural person?”
• “Do you have a UBO declaration form on file?”
• “Has this UBO been screened against sanctions and PEP lists?”
• “Has the UBO changed since onboarding?”
• “Where is the proof of shareholding or ownership?”

If your team hesitates or provides incomplete answers, that could trigger red flags, even if there’s no actual misconduct.

Handling Complex UBO Structures

Some clients are straightforward, a freelancer or single-owner company. Others have multiple layers of ownership, sometimes across borders.

To stay compliant:

• Request full ownership charts from clients.
• Follow the trail until you identify the real person(s), even if it goes through multiple companies.
• For large shareholder structures, apply the 25% rule first, then identify others with control (directors, board members, etc.).
• Always screen UBOs against sanctions and PEP lists, even if they’re not the customer.

Common Pitfalls to Avoid

• Listing the company itself as the UBO
• Accepting corporate shareholders without tracing ownership
• Skipping UBO review when ownership changes
• Assuming "low risk" clients don't require UBO checks
• Forgetting to document the UBO declaration and screening

Q&A: Real-Life UBO Clarifications

Q1: Is a UBO always a person, or can it be an entity?

A UBO must ultimately be a natural person. Even if ownership passes through multiple companies, the end of the chain should be an individual, not another entity.

Q2: If the end customer is a person, is there a separate UBO?

No. If the customer is an individual acting for themselves, they are their own UBO. UBO checks are more relevant when the customer is a company, trust, or partnership.

Q3: Can a company have more than one UBO?

Yes. If multiple individuals each own or control 25% or more, or share significant influence, they are all UBOs. You must identify and screen each of them.

Q4: What if a company has hundreds or thousands of shareholders?

You don't need to investigate every small shareholder. Focus on:

• Individuals with ≥25% ownership, or
• Those with effective control or management influence (e.g., directors, senior managers)
  If no one meets either condition, document the most senior controlling person as the UBO.

Bonus: How InfoAML Helps You Track and Manage UBOs

Managing UBOs across dozens or hundreds of clients can feel complex, unless your AML system is built to support it.

With InfoAML, you can already:

• Screen individual UBOs, even if they’re not the named customer
  Simply add UBOs as separate records and run PEP/sanctions screening as part of your case review.
• Include UBOs in risk assessments and SAR/STR reviews
  Screen matches, investigation notes, and final assessments can all incorporate UBO data, even if tracked separately.
• Attach ownership-related documents
  Corporate files can include CRs, shareholder lists, or any UBO-related docs to support compliance reviews.

Looking ahead: InfoAML is planning enhancements to make UBO tracking more streamlined, including:

• A dedicated UBO tab within company profiles
• The ability to link individuals or entities as UBOs, with defined ownership/control roles
• Connected screening and risk flags for each UBO
• Optional visual ownership summaries to simplify audits and regulator queries

With InfoAML, UBO transparency isn’t just a checkbox, it’s a growing part of our commitment to make AML compliance smarter, more structured, and audit-ready.

Final Thought

UBO declaration is no longer optional or passive. If you onboard corporate clients, you’re expected to dig deeper, and declare who’s really behind the entity.

By applying clear procedures, using the 25% rule intelligently, and documenting everything, you’ll not only meet regulatory standards but reduce your exposure to hidden risks.

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