RAKEZ CSP Regulations 2020

Regulations issued 16 September 2020 under Law No. 2 of 2017 for the registration and certification of entities providing corporate services in the Zone, their duties, appointment of directors and managers, anti-money-laundering obligations, inspection, investigation, cancellation, fines and the Registrar's enforcement powers.

Summary

The RAKEZ Corporate Service Provider Regulations of 2020 decide who may act for companies before the RAK Economic Zone Authority and how they must behave. They were issued on 16 September 2020 (Issue No. 02, reference COMP/PLCY-003) by the Board of Directors under Law No. 2 of 2017 and came into force on issuance (Regulations 1 and 2). They apply to every registered corporate service provider holding a Certificate (Regulation 3).

Regulation 6 is the gateway: no entity may provide CSP Services, or purport to do so, unless it is a Registered CSP. Schedule 1 lists those services, including representation before the Authority, company formation advice, appointment of directors and managers, due diligence, document witnessing and renewals. Breach carries a fine of up to level 5 (Regulation 7). Registration is applied for on the standard form (Regulation 8) and requires a valid licence, a qualifying professional activity, three years' existence in the UAE, a physical office, qualified staff, solvency and ethical standards (Regulation 9), payment of fees (Regulation 10) and results in a Certificate valid for one year that must be renewed before expiry, which the Registrar may refuse in the Authority's interest (Regulation 11).

Part IV sets the conduct duties. The Registered CSP must notify changes, keep filings accurate, maintain controls and identification records and comply with anti-money-laundering and data protection law and the AML requirements in Schedule 2, with a fine of up to level 5 for contravention (Regulation 12); it must carry out due diligence before providing services and keep a register of ultimate beneficial owners with identity documents (Regulation 14); and it must hold insurance including professional indemnity cover (Regulation 15). The CSP is the company's sole representative before the Authority and must file a service agreement before acting (Regulation 16). A company may change its CSP with consent by no-objection certificate, without consent on listed grounds through mediation, or where the CSP has closed or abandoned it (Regulation 17). Directors and managers the CSP appoints are subject to disqualification for age, criminal record, sanctions or bankruptcy (Regulations 19 to 21), and only senior, full-time, Registrar-approved Authorised Personnel may perform the services (Regulation 22).

The Registrar may inspect, audit and investigate (Regulations 24 to 27) and may cancel the Certificate, restrict electronic system access, impose fines up to level 5, issue notices or refer the CSP to other authorities (Regulation 28). Cancellation follows a warning notice, a chance to rectify and a decision notice, after which services stop and records transfer to the successor (Regulations 29 to 32); a former CSP stays under the Authority's jurisdiction for two years (Regulation 33). Fines follow the Schedule 3 scale of AED 1,000 to AED 20,000 (Regulation 35), falsified information carries a level 5 fine (Regulation 41), and only the CSP or its Authorised Personnel may file for the company (Regulation 43). The Regulations are in force.

Who it applies to

Entities registered with the RAK Economic Zone Authority as corporate service providers and holding a Certificate, their directors, managers and Authorised Personnel, the directors and managers they appoint to client companies, and the RAKEZ companies that must act through a Registered CSP; the Registrar supervises, inspects, fines and cancels registrations.

Contents

English official text in 45 provisions. Open the full text or jump to a provision:

1. 1 — Title and Commencement
2. 2 — These Regulations came into force upon issuance by the Authority
3. 3 — The Authority has the right to repeal, revise, amend or modify from time to time any
4. 4 — Definitions
5. 5 — General Interpretation
6. 6 — Prohibition
7. 7 — Contravention of the Prohibition
8. 8 — Application for Registration and Certificate
9. 9 — Qualifications and Conditions
10. 10 — Fees for Registration
11. 11 — Issuance of a Certificate
12. 12 — Duties of Registered CSP
13. 13 — Registered CSP’s Undertaking
14. 14 — Compliance with Anti-Money Laundering Regulations
15. 15 — Insurance
16. 16 — Relationship
17. 17 — Change of Registered CSP by the Company
18. 18 — Resignation of the Registered CSP
19. 19 — Appointment of Directors
20. 20 — Appointment of Managers
21. 21 — Affairs of the Director and Manager
22. 22 — Appointment of Authorized Personnel
23. 23 — Provision of CSP Services by Authorized Personnel of Registered CSP
24. 24 — Right to Inspect
25. 25 — Audit and Reports
26. 26 — Registrar’s Power to Require Information
27. 27 — Investigative Power
28. 28 — Disciplinary Actions
29. 29 — Cancellation by Registrar at the Request of Registered CSP
30. 30 — Cancellation on Initiative of Registrar
31. 31 — Cancellation of Certificate: Procedure
32. 32 — Transfer of Records
33. 33 — Jurisdiction of the Authority after Cancellation
34. 34 — Dispute Resolution involving Registered CSP
35. 35 — Fines
36. 36 — Statement of Policy
37. 37 — Obligation to Indemnify
38. 38 — Registrar
39. 39 — Registers
40. 40 — Power of the Registrar to Give Guidance
41. 41 — Incomplete, Inaccurate or Falsified Information
42. 42 — Right to Request Additional Information
43. 43 — Filing of Documents
44. 44 — Inspection of Register and Documents Filed
45. 45 — Registered CSP continues to be liable for fees, etc

Key provisions

Obligations and deadlines

• Hold a current Certificate before providing any CSP Service and renew it before its one-year term expires (Regulations 6 and 11).
• File a service agreement with the Registrar before starting work for a company (Regulation 16).
• Perform due diligence before onboarding and keep a register of ultimate beneficial owners with identity documents (Regulation 14).
• Maintain professional indemnity and other insurance appropriate to the business (Regulation 15).
• Use only Registrar-approved Authorised Personnel and replace a departing one within seven days (Regulation 22).
• Notify changes and keep all filings accurate and complete (Regulations 12 and 41).
• Allow inspection and audit of records and premises and provide activity reports on request (Regulations 24 to 26).
• Hand over company records and cooperate with the successor when ceasing to act (Regulation 32).

Penalties

Providing CSP Services without registration (Regulation 7), breaching the Regulation 12 duties and submitting incomplete, inaccurate or falsified information (Regulation 41) each carry a fine of up to level 5, which Schedule 3 sets at AED 20,000, with lower levels of AED 1,000, AED 2,000, AED 5,000 and AED 10,000. The Registrar may also cancel the Certificate, restrict use of the electronic system, issue notices or refer the CSP to other authorities (Regulation 28), cancel on its own initiative for twelve months' inactivity, loss of licence, insolvency or violations after a warning and decision notice (Regulations 30 and 31), and a former CSP remains liable for fees and penalties and under the Authority's jurisdiction for two years (Regulations 33 and 45).

History and citations

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