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 Business and Professions”(DNFBP). Certain types of “non-financial” businesses have been identified as being susceptible to money laundering and terrorist financing due to the nature of their business and the transactions with activity that they may conduct. The following class of persons whose business or profession is carried on in or from within UAE is a DNFBP:
- Real estate developers and agents that carry out transactions with a customer involving the buying or selling of real property;
- Dealers in precious metals and dealers in precious stones;
- Law firms, notary firms and other independent legal businesses;
- Accounting firms, audit firms or insolvency firms;
- Company service providers that carry out any of the following activities for a customer:
- acting as a formation agent of legal persons;
- acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons
- providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement
- acting as (or arranging for another person to act as) a nominee shareholder for another person
These include identifying and assessing ML/FT risks :
- Establishing, documenting, and updating policies and procedures to mitigate the identified ML/FT risks
- Maintaining adequate risk-based Client Due Diligence (CDD) and ongoing monitoring procedures
- Identifying and reporting suspicious transactions
- Putting in place an adequate governance framework for AML/CFT, including appointing an AML/CFT Compliance Officer, and ensuring adequate staff screening and training
- Maintaining adequate records related to all of the above and
- Complying with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions under Chapter VII of the Charter of the United Nations, as well as in relation to Cabinet Decision No. (20) of 2019 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions On the Suppression and Combating of Terrorism, Terrorists Financing & Proliferation of Weapons of Mass Destruction, and Related Resolutions
- Cooperate with the Executive Office and the relevant Supervisory Authority in verifying the accuracy of the submitted information.
- Implement the freezing cancellation or lifting decision, when appropriate, without delay, pursuant to Related UNSCR or decisions of the Cabinet regarding issuance of Local Terrorist List.
- Set and implement: Internal controls and procedures to ensure compliance with the obligations arising from Cabinet Resolution No. 74 of 2020.
Policies and procedures that prohibit staff from, directly or indirectly, informing the Client or any third party that freezing action or any Other Measures are going to be implemented as per provisions of Cabinet Resolution No. 74 of 2020.
The Ministry of Economy, as the supervisory authority, is entrusted with the supervision of the ‘Designated Non-financial Businesses and Professions’ (DNFBPs) sector at the state level and commercial free zones in order to combat money laundering and financing of terrorism.
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MOE
guidance on DNBFP
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MOE
guidance for Real estate sector
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MOE
guidance for Precious Metals & Stones dealers
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MOE
guidance for Accounting & Auditors
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MOE guidance for Service Providers
Registration of Designated Non-Financial Companies on goAML Portal is Mandatory
All Designated Non Financial Businesses and Professions are required to register on the goAML portal. The goAML portal is an integrated platform used to file Suspicious Transaction Reports (and/or Suspicious Activity Reports). Under Federal Decree-Law No 20 of 2018 and Article 20 (2) of Cabinet Decision No 10 of 2019, it is obligatory to have procedures in place to report suspicious transactions to manage anti-money laundering. This system allows companies to help authorities identify criminal and suspicious activity. Failure to register on goAML may result in severe penalties invoked by the Ministry of Economy. If you have not completed your application, please do so at the earliest to gain access to the goAML system.Does your company fall under DNFBP legislation?
- Are you involved in the production of precious metals or precious stones? Are you an intermediate buyer or broker, precious stone cutter and polisher, precious metal refiner, and/or a jewellery manufacturer who uses precious metals and precious stones to retail sellers to the public or buyers and sellers in the secondary and scrap markets, which include gold, silver, platinum, diamonds etc..?
- Are you involved in providing company establishment and / or business administration services to third parties? For example, company or legal person set up / formation, providing third party services, business administration, providing registered business address services etc.
- Does your company conduct legal consulting activities?
Required documents:
- Authorisation letter from the institution you represent
- A copy of your passport, resident visa, and Emirates ID
- A copy of the commercial trade license (for companies)
- Download the ‘Google Authenticator’ application on your phone. (This application contains the password for the SACM protection system, which will change every minute)
Process of registrations:
First Step: Register in the protection system (SACM) of the goAML portal using the
following link:
https://eservices.centralbank.ae/sacm/
Watch the “How to register in SACM system” video for a visual walkthrough of the registration process:
https://www.youtube.com/watch?v=nH3IJa-wYhU
Second Step: Register in the goAML system as a Reporting Entity using the following
link:
CBUAE Services Portal – Central Bank of the UAE
Watch the “How to register on goAML as a Reporting Entity” video for a visual walkthrough of the
registration process: https://www.youtube.com/watch?v=GbDVfFxmbkk
If you have any technical issue while registering through goAML portal, please contact the following email ID: goaml@cbuae.gov.ae , or you can contact MOE support team number 8001222.
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
