Setting up a company in the UAE involves several regulatory steps designed to ensure transparency, investor protection, and strong corporate governance. One of the most important of these steps is declaring the UBO, a requirement that has become central to business compliance in the region. Knowing what a UBO is, why it matters, and how it affects business formation helps entrepreneurs avoid penalties and build credibility right from the start.
In this article, we break down every essential detail related to UBO, its importance, and why the UAE government requires this information from new and existing companies. Whether you’re forming a mainland LLC, a free zone entity, or an offshore structure, understanding the UBO is key to staying compliant and ensuring a smooth business setup journey.
The term UBO, or Ultimate Beneficial Owner, refers to the natural person who ultimately owns, controls, or benefits from a company, even if the ownership structure includes multiple layers, parent companies, or intermediaries. The concept is used globally in efforts to fight money laundering, tax evasion, and financial crimes.
In simple terms, a UBO is the individual who holds the real power or financial benefit within a company. The UBO isn’t always the shareholder or director on paper—sometimes, the real influence comes from someone behind the scenes who has controlling rights or receives the most benefit.
A shareholder owns shares.
A director manages daily operations.
But a UBO is the ultimate natural person controlling or benefiting from the entity, regardless of formal job titles.
A UBO can be a shareholder but not always. For instance, a nominee shareholder does not qualify as UBO if someone else controls the company.
The UAE has strengthened its compliance framework over recent years to align with global transparency standards. Declaring the UBO is now an essential legal obligation for every licensed entity.
The UAE introduced UBO requirements as part of its Anti-Money Laundering (AML) reforms and its partnership with the Financial Action Task Force (FATF). These steps help:
Combat money laundering
Prevent terrorism financing
Enhance international cooperation
Improve regulatory oversight
Accurate UBO reporting reassures investors that the business environment is transparent, ethical, and protected from misuse. This builds trust for foreign businesses entering the UAE.
The UAE government uses UBO disclosures to monitor ownership control, ensuring that companies follow local laws and maintain strong governance systems.
The UAE uses a clear set of rules to identify the UBO. A person qualifies if they meet any of these conditions:
A person is the UBO if they:
Own or control 25% or more of the shares
Hold 25% or more of the voting rights
Directly or indirectly own 25% or more through another entity
If a corporate shareholder exists, you must trace ownership until a natural person is identified.
A person is also considered a UBO if they:
Hold the right to appoint or remove a majority of directors
Exercise significant influence over company decisions
Have ultimate control over the company’s management
Control the corporate body through agreements or decision-making authority
This ensures all types of corporate control—not just share ownership—are captured.
In layered ownership structures (e.g., offshore + holding company), the UBO is the final natural person behind the entire chain.
When incorporating a company in Meydan Free Zone, the following UBO details are mandatory:
You must gather only these five items from the client:
Passport copy -Used to verify the individual’s identity and complete mandatory anti–money laundering (AML) checks.
Proposed number of shares -Confirms the UBO’s percentage of ownership and helps determine whether they meet the 25% ownership threshold.
Email address -Needed for official Meydan communication, verification, and important notifications throughout the application process.
Primary mobile number -Required for authentication, verification codes, and direct contact during onboarding.
Residential address -A regulatory requirement to complete the UBO profile and maintain accurate, legally compliant records.
These are the only personal and ownership details Meydan requires for UBO registration.
The UAE enforces UBO regulations under Cabinet Resolution No. 58 of 2020, which strengthens financial transparency and combats illegal activities. Every free zone, including Meydan, follows the same national framework.
Disclosing the UBO:
Speeds up bank account opening
Prevents compliance delays
Helps authorities verify the legitimacy of the business
Supports faster licensing and visa processing
UBO details protect businesses as much as they protect regulators.
Avoid these errors to prevent delays:
Using an unclear or expired passport copy
Inconsistent share allocation information
Providing a non-working email or mobile number
Listing a corporate entity as the UBO
Not identifying indirect ownership
Submitting clean, accurate data ensures your client gets their license quickly.
Yes. At least one UBO is mandatory for all entities.
No. The UBO must always be a natural person.
No. A UBO can live anywhere globally.
The person who exercises management control becomes the UBO.
Yes—within 15 days of any change in ownership, shares, or contact information.
Yes. It depends on who holds control or significant influence.
Understanding UBO requirements is essential for smooth company formation in Meydan Free Zone. With only five key details needed—passport copy, proposed shares, email, mobile number, and residential address—the process is straightforward. By applying the official UBO identification criteria and submitting accurate information, you ensure faster approvals, fewer compliance issues, and a smoother setup experience for your clients.
Understanding what information is required for UBO compliance can be challenging, but the Theta 7 Team is here to make it simple. We provide clear guidance, explain every requirement, and ensure your submission is complete and compliant from the start. Reach out to us today and get the reliable support you deserve.
