Ultimate Beneficial Ownership (UBO) UAE

April 12, 2022by admin0

An Ultimate Beneficial Owner (UBO) is an individual, who is benefitted from or positively impacted from a company even though he/she is not named as the owner of the business formally. It is a person within the parent company who owns or controls over 25% of the company’s share, owns the right to exercise significant control over the parent company and/or has the power to remove the majority of the board of directors. A UBO is formally defined as a person with significant control at the top management in a business. The companies are increasingly expected to understand, who they are doing business with. It is a move to combat fraud and is a part of Anti-Money Laundering (AML) and Know Your Customer (KYC) processes.  . UBO sscreening has been made mandatory for a few industries including the banks, solicitors, estate agents, accountants to name just a few. To know more about Ultimate Beneficial Ownership in UAE, partner with MBK Auditing. The UBO is quite important for a number of reasons.

In recent years, the fight against fraud has gained momentum worldwide. Recommendation from the Financial Action Task Force (FATF) states that financial institutions must identify the beneficial owner and initiate reasonable measures to identify their identity. While it is easy to identify the individual customer as the direct beneficiary of various transactions, UBOs may not be immediately identifiable, as they conceal their identity. Nowadays, many criminals or persons with dubious backgrounds conduct transactions using proxies or shell companies. While shell companies may be formed for legitimate reasons, they’re misused frequently to hide illegal or dubious funds. The anti-money laundering act bans anonymous shell companies and introduces needs for the companies to report their ultimate beneficiaries to the government. When the companies investigate the ultimate beneficiaries, they address the risk posed by the shell companies and other money laundering tactics. This ensures that the companies are not dealing with the criminals, who are exploiting the corporate infrastructure to get benefitted from the dubious transactions while concealing their real identity.

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