SPC Free Zone rules and regulations
Compliance Rules and Regulations
Regulatory framework to help you operate with confidence
Beneficial Owner
Ultimate Beneficial Owner, or UBO (as it is commonly known), refers to the identification of a company’s beneficial owners. Verification is an integral component of the SPC Free Zone review process during the onboarding procedure.
What is an Ultimate Beneficial Owner?
Cabinet Decision No. (109) Of 2023 On Regulating The Beneficial Owner Procedures
Cabinet Resolution No. (132) of 2023 Concerning the
Administrative Penalties against Violators of The Provisions of the Cabinet Resolution No. (109) of 2023
Concerning the Regulation of Beneficial Owner Procedures
Nominee Shareholder/Director – formal or informal
Know Your Client (KYC)
KYC (Know Your Client) is a core requirement under UAE AML/CFT regulations. It ensures that businesses identify and verify the identity of their customers, whether individuals or legal entities, to mitigate the risks of money laundering (ML), terrorist financing (TF), and other illicit activities.
1. KYC for Natural Persons
When onboarding an individual (natural person), the following information and documents must be collected and verified:
- Full Legal Name – including first name, last name, and any other names used (e.g., maiden name, previous legal name, or alias).
- Residential Address – complete permanent resident address.
- Contact Details – landline/mobile phone numbers and email address.
- Personal Information – date and place of birth, gender, nationality, and residency status.
- Identification Documents – valid Emirates ID, passport, visa, and any other relevant documents.
- Beneficial Ownership Information – where applicable, details on the date the person became a beneficial owner and the total number of shares/equity held.
2. KYC for Legal Persons
Legal Persons (e.g., companies, partnerships, or other legal entities) licensed or registered in the UAE must provide the following information at the time of registration or onboarding:
Basic Corporate Information
- Registered name and legal form.
- Memorandum and Articles of Association (or similar constitutive documents).
- Trade license or certificate of incorporation.
- Head office address and principal business address in the UAE.
- For foreign entities: name and address of the legal representative in the UAE (with proof of authorization).
Governance & Management
- Names of individuals holding higher management positions.
- Identification details of directors, partners, or authorized signatories (passport, Emirates ID, issuance/expiry dates, issuing authority).
Beneficial Ownership
- Identity of the ultimate beneficial owners (UBOs).
- Details of shareholding structure, including total shares/equity held.
- The date on which individuals became beneficial owners.
Legal Name & Trade Name Requirements
- A legal person cannot be registered under a name that is already taken in the UAE or that may cause confusion.
- The registered legal name, along with its legal form (e.g., LLC, PJSC, FZE), must appear on all official documents, correspondence, and records.
- Applications for trade name changes must be formally submitted to the Registrar, and the cancelled name must not be used after approval.
Registered Address
- The legal person must have a clear, detailed, and registered address , which must be kept up to date with the Registrar.
- This address will be used for official correspondence and service of notices.
3. Additional Information for Legal Entities (Non-Natural Persons / Legal Arrangements)
For other legal entities (e.g., trusts, foundations, holding companies), the following information must also be obtained:
- Name, legal form, and proof of incorporation.
- Permanent address of principal place of activities.
- Mailing and registered address.
- Legal Entity Identifier (LEI), if applicable.
- Contact telephone numbers.
- Identity of beneficial owners and controlling parties.
- Shareholding and equity distribution.
4. Keeping KYC Information Updated
KYC is not a one-time requirement. To ensure compliance, clients must keep their KYC information accurate and current:
- License Renewal – KYC details must be confirmed or updated at the time of renewal.
- Amendments – Any changes to shareholders, directors, or business activities require updated KYC.
- Ongoing Updates – Clients may be asked to refresh KYC information if circumstances change or as required by regulations.
Keeping KYC information up to date helps protect the business and ensures full compliance with UAE laws.
Designated Non Financial Businesses and Professions (DNFBP)
What is a DNFBP?
DNFBP stands for Designated Non-Financial Businesses and Professions. In the UAE, certain non-financial businesses and professions are considered at risk of money laundering (ML) and terrorist financing (TF) due to the nature of their services and the types of transactions they conduct.
Who is classified as a DNFBP in the UAE?
The following categories of businesses and professions operating in or from the UAE fall under the DNFBP definition:
- Real estate agents and brokers engaged in property sales and purchases.
- Dealers in precious metals and precious stones.
- Law firms, notary firms, and independent legal professionals.
- Accounting, audit, and insolvency firms.
- Company service providers, including those engaged in:
- Acting as formation agents of legal entities.
- Acting (or arranging for others to act) as company directors, secretaries, or partners.
- Providing registered offices, business addresses, or administrative services for companies or partnerships.
- Acting (or arranging for others to act) as nominee shareholders.
AML/CFT Obligations of DNFBPs
Under Federal Decree-Law No. (20) of 2018 on AML/CFT and related Cabinet Decisions, DNFBPs are legally required to comply with the following core obligations:
- AML/CFT Policy & Procedures – Establish and update internal AML/CFT policies and procedures.
- Appointment of Compliance Officer – Assign a Compliance Officer responsible for implementation and liaison with authorities
- Risk-Based Customer Due Diligence (CDD) – Apply appropriate due diligence measures, with enhanced checks for higher-risk customers.
- ML/TF Risk Assessment – Identify, assess, and document ML/TF risks related to business activities
- Suspicious Transaction/Activity Reporting – Detect and report suspicious activities to the UAE Financial Intelligence Unit (FIU) via the GoAML system.
- Record Keeping – Maintain records of CDD, transactions, and compliance measures for at least five years.
- Record Keeping –
- Targeted Financial Sanctions (TFS) Regime – Implement measures to comply with UN Security Council resolutions and UAE Cabinet decisions, including freezing orders without delay.
- Independent Audit & Training – Conduct regular independent audits of AML/CFT frameworks and ensure ongoing staff training.
Supervisory Authorities for DNFBPs in the UAE
- Ministry of Economy (MOE): Supervises DNFBPs such as real estate agents/brokers, dealers in precious metals and stones, accounting and audit firms, insolvency practitioners, and company service providers.
- Ministry of Justice (MOJ): Supervises law firms, notary firms, and independent legal professionals.
Registration of DNFBPs on the goAML Portal
All Designated Non-Financial Businesses and Professions (DNFBPs) in
the UAE are required to register on the goAML portal.
The goAML portal, developed by the United
Nations Office on Drugs and Crime (UNODC) and implemented by the Central Bank of the UAE
(CBUAE), is the official reporting platform for filing Suspicious Transaction
Reports (STRs) and Suspicious Activity Reports (SARs).
Legal Requirement
Under Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and
Combating the Financing of Terrorism (AML/CFT) and Article 20(2)
of Cabinet Decision No. (10) of 2019, DNFBPs must establish procedures to detect and report
suspicious transactions through the goAML system.
Failure to register or comply with reporting obligations may result in severe
penalties imposed by the Ministry of Economy (for most
DNFBPs) or the Ministry of Justice (for legal professionals).
Does Your Company Fall Under DNFBP Legislation?
You are required to register on the goAML portal if your business falls into any of the following categories:
- Dealers in Precious Metals and Stones
- Producers, intermediate buyers, or brokers.
- Precious stone cutters and polishers.
- Precious metal refiners.
- Jewellery manufacturers using gold, silver, platinum, diamonds, or other precious materials.
- Buyers and sellers in retail, wholesale, or secondary scrap markets.
- Company Service Providers
- Company formation and business establishment services.
- Provision of registered business addresses.
- Third-party business administration services.
- Law Firms and Legal Consultants
- Legal practitioners engaged in certain consulting and transactional activities (regulated by the Ministry of Justice).
Required Documents for goAML Registration
To complete your registration, prepare the following:
- Authorization letter from the institution you represent.
- Copy of passport, residence visa, and Emirates ID.
- Copy of the company’s valid commercial trade license.
- Installation of the Google Authenticator app (for SACM system password protection).
Step-by-Step Registration Process
-
Step 1: Register in the SACM Protection System
- Access the SACM registration portal here: SACM Registration Portal
- Watch the official guide: How to register in SACM system (YouTube)
-
Step 2: Register in the GoAML System
- Access the goAML Reporting Entity portal via: CBUAE Services Portal
- Watch the official guide: How to register on goAML as a Reporting Entity (YouTube)
Support and Assistance
If you encounter technical issues during registration, you may contact:
- Email: goaml@cbuae.gov.ae
- MOE Support Hotline: 800-1222
MOE
guidance on DNBFP
Economic Substance Regulations (ESR)
As part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an
assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the
UAE issued Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the
“Regulations”) on 30 April 2019.
Guidance on the application of the Regulations was issued on 11 September 2019 (Ministerial Decision No. 215
of 2019), and Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies lists the
Regulatory Authorities tasked with the administration and enforcement of the Regulations.
Amendments to the Regulations were made by Cabinet of Ministers Resolution No. (57) of 2020 on 10 August
2020, and updated Guidance was issued on 19 August 2020 (Ministerial Decision No. (100) of 2020.
The Regulations require UAE onshore and free zone companies and certain other business forms that carry out
any of the defined “Relevant Activities” listed below to maintain and demonstrate an adequate “economic
presence” in the UAE relative to the activities they undertake (“Economic Substance Test”).
Relevant Activities:
- Banking Business
- Insurance Business
- Investment Fund management Business
- Lease -Finance Business
- Headquarters Business
- Shipping Business
- Holding Company Business
- Intellectual Property Business (“IP”)
- Distribution and Service Centre Business
New
Cabinet Resolution No 57 of 2020 revoking Cabinet Resolution No 31
of 2019
