Made under Article 46 of the Operating Law, the Regulations require DIFC companies, partnerships, non-profits and foundations to identify, record and file their ultimate beneficial owners at a 25% ownership or control threshold, oblige nominee directors to disclose their status and set deadlines for updating the register and notifying the Registrar.
The DIFC Ultimate Beneficial Ownership Regulations are made by the Board of Directors of the DIFCA under Article 46 of the Operating Law, DIFC Law No. 7 of 2018, and give effect to the Article 61 duty of every Registered Person to identify and disclose its beneficial owners and nominee directors. The current text is Consolidated Version No. 2, in force on 8 March 2024. They apply to DIFC companies, partnerships, NPIOs and foundations and their officers and owners (Regulation 1.1.1).
An Ultimate Beneficial Owner is a natural person, other than a professional adviser or manager, who directly or indirectly owns or controls at least the Relevant Percentage of 25% of the shares, ownership interests or voting rights of a company, or the right to appoint or remove a majority of its directors; for a partnership, foundation or NPIO it is anyone who has the legal right to exercise, or actually exercises, significant control or influence over its activities or governing body (Regulation 3.1.1). Ownership is traced through any number of persons, and if no one qualifies the test falls to anyone whose instructions the entity follows and then to the governing body (Regulations 3.1.2 to 3.1.5). Listed, regulated, recognised foreign, non-fundraising NPIO and government-owned entities are exempt, and chains running through them need not be traced further (Regulation 2).
Every Registered Person must hold adequate, accurate and current UBO Particulars (Regulation 3.2.1), may not register a share transfer unless the transferee states whether it changes beneficial ownership and supplies the new owner's particulars (Regulation 3.2.3), and must serve a notice on anyone it reasonably believes to be an unrecorded owner, who has 30 days to respond (Regulation 3.3). The Beneficial Ownership Register, holding each owner's name, addresses, date and place of birth, nationality and identity-document details, must be set up within 30 days of incorporation and updated within 30 days of a change (Regulation 4.1). A director obliged to act on another person's directions is a Nominee Director and must disclose that status and the principal's particulars to the company within 30 days, and the company keeps a Register of Nominee Directors (Regulation 5).
The registers are confidential (Regulation 6.1.1). New entities are deemed to have filed their UBO Particulars with the incorporation application, and every change to either register must be notified to the Registrar within 30 days (Regulations 6.1.3 and 6.2.1). The Registrar may demand information and documents (Regulation 6.3), uses the data only for anti-money-laundering and sanctions purposes and keeps records of dissolved entities for six years (Regulation 7). Where an owner is sanctioned or involved in criminal, regulatory or tax proceedings, the Registrar may require the entity to remove that owner (Regulation 8.1) and may strike off any entity that fails to comply (Regulation 8.2). Every failure is fined under Article 61(4) of the Operating Law. The Regulations are in force.
Every company, partnership, Non Profit Incorporated Organisation and foundation incorporated, registered or continued in the DIFC, together with their directors, governing-body members, shareholders and beneficial owners, nominee directors and the persons they act for, liquidators, and the Registrar of Companies; listed, regulated, recognised foreign and government-owned entities are exempt from Regulations 3 to 6.
| Regulation 2 | Registered Persons listed on a Recognised Exchange, regulated by a Recognised Financial Services Regulator, recognised foreign entities under equivalent standards, non-fundraising NPIOs and wholly government-owned or governmental entities are exempt from Regulations 3 to 6; an ownership chain passing through such an entity holding at least 25% need not be traced beyond it, but the entity's name, address and category are recorded. |
| Regulation 3.1 | An Ultimate Beneficial Owner is a natural person, other than a professional adviser or manager, owning or controlling directly or indirectly at least 25% of a company's shares, ownership interests or voting rights or the right to appoint or remove a majority of its directors, or exercising significant control over a partnership, foundation or NPIO; failing that, anyone whose instructions the entity follows, and failing that, the governing body. |
| Regulation 3.2 | A Registered Person must take reasonable steps to obtain and hold adequate, accurate and current UBO Particulars, and must not register or give effect to a share transfer unless the transferee states whether it changes beneficial ownership and supplies the particulars of each new owner. |
| Regulation 3.3 | A Registered Person must give a written notice to anyone it reasonably believes is an unrecorded Ultimate Beneficial Owner, asking them to confirm, correct or supply particulars; if they do not respond within 30 days the notified particulars are entered, and the entity may rely in good faith on the response. |
| Regulation 4.1 | A Beneficial Ownership Register recording each owner's full legal name, residential and service addresses, date and place of birth, nationality, identity-document number, country and dates, and the dates of becoming and ceasing to be an owner, must be established within 30 days of incorporation and changes recorded within 30 days of the entity becoming aware of them. |
| Regulation 4.2 | A person aggrieved, any member, owner or named owner may apply to the Court to rectify the Beneficial Ownership Register, and the Court may order rectification and compensation for loss. |
| Regulation 5.1 | A director under an obligation to act in accordance with another person's directions, instructions or wishes is a Nominee Director and must inform the company and provide the principal's particulars within 30 days of appointment or becoming a nominee, and notify changes and cessation within 30 days. |
| Regulation 5.2 | A company with one or more Nominee Directors must keep a Register of Nominee Directors recording the name, addresses, date of birth, nationality and identity-document details of each person a nominee acts for, and the dates the nominee's status began and ended. |
| Regulation 6.1 | The Beneficial Ownership Register and Register of Nominee Directors may not be disclosed or made available for inspection except as the Regulations or applicable law require or with the owner's or nominee's consent; a new entity is deemed to have filed its UBO Particulars with its incorporation application. |
| Regulation 6.2 | Any change made to the Beneficial Ownership Register or Register of Nominee Directors must be notified to the Registrar within 30 days, and the Registrar may require further information on any owner or nominee. |
| Regulation 6.3 | The Registrar may by written notice require any person to provide, produce or explain information and documents on beneficial owners and nominees, including attending the registered office without notice in urgent cases; a liquidator or, on strike-off, the governing body must deliver the registers to the Registrar within 30 days. |
| Regulation 8 | Where an Ultimate Beneficial Owner is subject to sanctions or involved in criminal, regulatory, tax or other proceedings and the Registrar considers it contrary to law or prejudicial to the DIFC, the Registrar may require the Registered Person to remove that owner by a set date, and may strike off any entity that fails to comply with the Regulations or a notice. |
Each failure to serve a UBO notice, keep the Beneficial Ownership Register, disclose nominee status, keep the Register of Nominee Directors, file particulars or changes with the Registrar, answer a Registrar's notice, deliver the registers on winding-up or strike-off, or remove a sanctioned owner on demand is a contravention fined under Article 61(4) of the Operating Law, where Schedule 2 sets a maximum of USD 25,000 per contravention. The Registrar may also order removal of an Ultimate Beneficial Owner who is sanctioned or under investigation (Regulation 8.1) and, after the Decision Making Procedures, strike the entity off the Public Register for any non-compliance (Regulation 8.2).
UBO registers are a standing item for every DIFC company and foundation we administer, and they feed directly into our own KYC files as a licensed corporate service provider and goAML-registered DNFBP. At incorporation we complete the UBO Particulars in the application, which Regulation 6.1.3 treats as the first filing, and open the Beneficial Ownership Register within the 30-day window. Thereafter the 30-day clocks drive our work: every share transfer we process carries the Regulation 3.2.3 transferee statement before the company registers it, and every change reaches the Registrar within 30 days under Regulation 6.2.1. Where we provide a nominee director, that director discloses the arrangement and the principal's details to the company under Regulation 5.1 and the company keeps the Register of Nominee Directors, so the arrangement is transparent to the Registrar while remaining confidential to third parties under Regulation 6.1.1. We screen owners against sanctions lists because Regulation 8.1 lets the Registrar demand their removal.
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