Beneficial Ownership and Control

Background

Identification of corporate beneficial ownership and control is an important tool in the fight against money laundering and other financial crime. Beneficial ownership identification forms an integral part of ADGM’s application review process in registering a legal entity in ADGM. An applicant must provide such information at the time of incorporation and this information must be kept up to date during the life cycle of the legal entity.

In particular, applicable ADGM entities must keep a record of the required particulars of their beneficial owners in a ‘record of beneficial owners’ and notify the Registrar of any changes in beneficial ownership.

Applicability

ADGM’s Beneficial Ownership and Control Regulations 2018 (the "Regulations") apply to all legal entities in ADGM, except for:

• branches of foreign companies or foreign partnerships;
• public listed companies; or
• UAE Government entities.

Identification of beneficial owners and controllers

The definition of a beneficial owner, in relation to a company or limited liability partnership (LLP), provides for a three-fold test for identifying a beneficial owner, which is as follows:

1. Any person who has 25% or more direct or indirect ownership or voting rights in the company or LLP;
2. Any person who controls the company or LLP; or
3. Any person who holds the position of officer of the company or LLP (only applies if no beneficial owner is identified under tests 1 or 2).

The Regulations also provide for a definition of beneficial owner in relation to partnerships (other than an LLP), trusts and foundations.

Registry filing obligations

• All applicable entities are required to maintain up to date beneficial ownership records and report changes to the Registrar within 15 days of a change.

Sanctions

• Failure to comply with respective provisions of the regulations is subject to maximum of a Level 7 fine ($25,000).

Accessibility

• The Record of Beneficial Owners is not published publicly for privacy reasons.
• Access to the Record of Beneficial Owners is limited to designated personnel of ADGM Registration Authority only.
• The Registrar may only disclose beneficial ownership information to third parties in accordance with the requirements of section 967 of the Companies Regulations or on the consent of the legal entity to whom the information relates.