The UAE mandates a transparent ownership structures in line with national compliance standards. UBO compliance in UAE free zones is a core requirement designed to support regulatory oversight, anti-money laundering efforts, and responsible corporate governance.
This article outlines the obligations applicable to free zone entities, the information they must maintain, and practical measures for effective Ultimate Beneficial Owner reporting.
Understanding UBO Requirements in Free Zones
A UBO is the natural person who ultimately owns or controls a company. In most cases, this is an individual who:
- Holds 25% or more of shares or voting rights, or
- Exercises effective control through other means
Free zone authorities require all registered entities to identify such individuals, document their details, and provide information when requested. This ensures regulators maintain visibility over the true ownership of licensed entities. If no natural person meets the ownership or control thresholds, senior management individuals exercising control may be treated as the beneficial owner.
Regulatory Basis for UBO Reporting
UBO obligations are derived from UAE Cabinet regulations governing real beneficiary procedures. These rules apply to all commercial free zone entities unless they operate within financial free zones with independent disclosure frameworks.
Entities must establish and maintain the following formal registers:
- Real Beneficiary Register
- Partners or Shareholders Register
- Nominee Management Members Register (where applicable)
These registers must be complete, accurate, and updated whenever changes occur. Entities are required to establish the Real Beneficiary Register within 60 days from the effective date of the regulation or from the date of company formation.
Information Free Zone Companies Must Maintain
Once UBOs are identified, entities must maintain a structured record of relevant details. Required information includes:
- Full legal name
- Nationality
- Date and place of birth
- Residential address
- Passport or Emirates ID details
- Basis for classification as a UBO (ownership percentage or control rights)
- Date the individual becomes a UBO
- Date the individual ceases to qualify
These records must remain accessible for review by the free zone authority at any time. Entities must also retain historical records of changes and updates for regulatory inspection.
In certain free zones, such as Sharjah Airport International Free Zone (SAIF), entities are required to notify a person within 15 days if they are added to the UBO register without their prior knowledge. Companies should verify specific free zone regulations to ensure compliance.
Submission and Ongoing Reporting Responsibilities
Free zone companies must submit UBO information through the channels prescribed by their authority typically through online portals. Beyond the initial submission, entities must meet ongoing responsibilities, including:
- Updating UBO details within 15 days of any change
- Maintaining accurate internal registers at all times
- Providing supporting documentation upon request
- Appointing an authorised resident representative if required
These obligations ensure the regulator has reliable, up-to-date ownership information.
Entities Exempt from Standard UBO Procedures
Certain entities are exempt from the federal UBO framework, including:
- Companies licensed in financial free zones with separate reporting rules
- Entities wholly owned by UAE federal or local government bodies
- Publicly listed companies subject to market disclosure requirements
Even where exemptions apply, authorities may request evidence confirming the entity’s eligibility.
Administrative Consequences of Non-Compliance
Failure to meet UBO reporting obligations can result in administrative measures, such as:
- Warnings or financial penalties, which may range from AED 20,000 upwards depending on severity and repetition
- Restrictions or suspension of licence renewals and free zone services
- Delays or denials in processing corporate actions or modifications
- Potential closure of commercial establishments for repeated noncompliance
Maintaining complete and accurate records helps mitigate these risks and supports uninterrupted operations.
Best Practices for Free Zone Businesses
A structured compliance approach helps entities manage UBO responsibilities efficiently. As an FTA-approved Tax Agency with ISO 9001, ISO 27001, and ISO 42001 certifications, SimplySolved recommends the following steps:
- Mapping ownership structures to identify all individuals meeting the UBO criteria
- Maintaining updated registers for UBOs, shareholders, and nominee management members
- Establishing internal controls to capture ownership or control changes promptly
- Safeguarding all supporting documents and ensuring availability for inspection
- Assigning responsibility to a designated compliance or administrative lead
These measures support ongoing compliance and strengthen the organisation’s governance framework.
Conclusion
UBO reporting is a mandatory and ongoing requirement for free zone companies in the UAE. By maintaining accurate registers, meeting UBO filing deadlines, and adhering to disclosure procedures, businesses can avoid UBO non-compliance penalties and meet regulatory expectations. A disciplined approach to UBO compliance reinforces accountability and ensures a resilient operating environment.
About SimplySolved
SimplySolved is an ISO 9001, 27001, and 42001 certified firm providing full spectrum support with inhouse teams to supporting local or internationally resident entities, startups, and subsidiaries entering the UAE market. From jurisdictional selection, company formation to visa processing, licensing, and compliance, our advisory team ensures complete alignment with UAE commercial laws, governance frameworks, labour law and tax regulations. We operate across multiple lines of business including Company Formation, Finance & Tax (FTA Tax Agents) and HR & Payroll to offer our clients full support from planning to operational support.
Partner with SimplySolved to build a compliant and reliable foundation for your UAE business and support to manage key Finance, Tax and HR/Payroll operations.
While this guide provides high-level guidance, it is not a substitute for tax or legal advice, and we encourage you to seek advice regarding the specific matters that concern you. If you wish to speak to us, you may contact us directly.
