Most directors of UAE free zone companies can tell you exactly where their trade licence and shareholder certificate are kept. Far fewer can say the same about their UBO register.
Since Cabinet Decision No. 109 of 2023 came into effect, every legal person licensed in the UAE mainland or a commercial free zone has been required to maintain a standalone Register of Real Beneficial Owners, in addition to its existing register of partners or shareholders. In our day-to-day work reviewing client files, this is one of the most consistently overlooked compliance obligations we come across — and the gap is rarely intentional. It is simply a register that many companies never knew they needed to create.
What the law actually requires
Cabinet Decision No. 109 of 2023, which replaced the earlier Cabinet Resolution No. 58 of 2020, requires in-scope companies to maintain three distinct registers:
- A Register of Real Beneficial Owners;
- A Register of Partners or Shareholders;
- Where applicable, a Register of Nominee Directors or Managers.
A beneficial owner is generally any natural person who owns or controls 25% or more of a company’s shares or voting rights, or who otherwise exercises ultimate control over its management.
The timing requirements are specific. Companies must prepare and file their UBO register with the relevant licensing authority within 60 days of incorporation or licensing, and must update it within 14 days of any change in ownership or control — for example, a post-incorporation share transfer or the appointment of a new shareholder.
Why free zone companies fall behind
In our experience, the gap usually comes down to timing and awareness rather than negligence.
Many free zone companies — including those registered under IFZA — are incorporated quickly through registration agents who focus on the trade licence and shareholder documentation, with the UBO register treated as a secondary or optional step. Ownership changes are another common blind spot: a share transfer or new investor is recorded with the free zone authority, but the company’s own UBO register is never updated to reflect it. Nominee arrangements, where they exist, are frequently undocumented altogether.
None of this is unique to one free zone. It is a pattern we see across jurisdictions — which is precisely why it is worth checking before it becomes a problem.
The cost of non-compliance
The consequences of an outdated or missing UBO register are not merely administrative. Cabinet Decision No. 132 of 2023 sets out an escalating penalty framework for violations, ranging from written warnings for a first offence to fines of up to AED 100,000 and potential licence suspension for repeated breaches.
Beyond the regulatory exposure, an incomplete UBO register increasingly surfaces during bank KYC refreshes and due diligence exercises — where its absence can delay account opening, financing, or a transaction at the worst possible time. The register that felt optional at incorporation becomes urgent the moment a bank or counterparty asks for it.
The practical takeaway
Directors should confirm, today, whether a standalone UBO register actually exists for their company — and should not assume that a shareholder certificate or trade licence satisfies the requirement.
Once confirmed, the register should be:
- Checked against current ownership;
- Updated for any changes within the 14-day window; and
- Reviewed annually alongside other corporate compliance matters — rather than only when a bank or authority asks for it.
References and source notes
- Cabinet Decision No. 109 of 2023 on the Regulation of Real Beneficiary Procedures (replacing Cabinet Resolution No. 58 of 2020).
- Cabinet Decision No. 132 of 2023 on Administrative Penalties for Violations.
This article is intended as general guidance for company directors, investors, and finance and compliance teams managing UAE entities. It is not a substitute for advice on a specific matter.
