Ultimate Beneficial Ownership disclosures
Corporate Structuring / Qatar
Qatari authorities have each made it mandatory pursuant to the Unified Economic Register Law No. 1 of 2020 and its Executive Regulations.
Law Update: Issue 359 - Real Estate & Construction and Hotels & Leisure
Samiya F. MithaSenior Associate,Corporate Structuring
In line with Qatar’s Anti-Money Laundering and Counter Financing of Terrorism efforts and to comply with the relevant Financial Action Task Force (FATF) Recommendations, Qatari authorities within Qatar have each made it mandatory pursuant to the Unified Economic Register Law No. 1 of 2020 (UBO Law) and its Executive Regulations under Cabinet Decision No. 12 of 2020 (UBO Executive Regulations), for entities established under them to provide information regarding their ultimate beneficial owners (UBOs).
This article provides an overview of the requirements to be considered by entities established under the Ministry of Commerce and Industry (MOCI), the Qatar Free Zone Authority (QFZA) and the Qatar Science and Technology Park (QSTP) while submitting UBO information. The above authorities act under the UBO Law, while entities established under the Qatar Financial Centre are subject to their specific own bespoke regime.
Under the UBO Law, the real beneficiary is defined as “the natural person who possesses or actually controls a legal person or arrangement permanently or the natural person who performs operations on his behalf, also includes the person who exercises effective and final control over a legal person or arrangement.”
The UBO Executive Regulations have further elaborated on real beneficiaries as follows:
A natural person or natural persons who directly or indirectly owns an effective controlling ownership interest of not less than (20%) of the company's capital or of the voting rights in it.
In cases where the identification of the true beneficiary has not been reached or when there is suspicion that the natural person who owns a controlling ownership interest is the true beneficiary according to the provisions of the previous clause, or when no natural person exercises control through ownership shares or voting rights, the identity of a natural person (or natural persons) who exercises actual or legal control or control by any means, directly or indirectly, over the executive bodies or the general assembly of the company or the conduct of its work, is verified by determining the content of the decisions taken by the general assembly due to the rights of voting in which he acts or for his being a partner or a shareholder with the power to appoint or dismiss the majority of the members of the management, management or control bodies of the company or any other means of control or control.
In the event that the real beneficiary is not identified according to the two previous clauses, the real beneficiary is the natural person who has the capacity of legal representation for the company according to the legislation governing it.
In order to submit the details of the UBO, as a first step companies should prepare a structure chart showing all companies/individuals who own directly or indirectly more than 20% of the share capital of the Qatar company (indicating the percentage ownership by individuals and companies and also indicating whether such company is listed or unlisted).
The notification is done through certain filings at the MOCI. The MOCI has issued a template UBO form in both English and Arabic; however, for the purposes of the filing, the MOCI accepts only the Arabic version of the form.
Along with the UBO form the following documents are required to be submitted:
a) a copy of the latest valid passport of the UBO(s); and
b) the Qatari residency permit/ID (QID) of the manager of the entity signing the form.
Qatar Free Zone AuthoritySimilar to the filings under the MOCI, entities established under QFZA are also required to submit their UBO information to the QFZA. The thresholds for determining the UBO are in accordance with the UBO Law.
The UBO form may be filed in English along with the following documents which are to be certified by the manager of the entity stablished under QFZA:
a) ownership structure;
b) all documents evidencing ownership structure and UBO / de facto controller (e.g. shareholders list/ registry extract, constitutional documents);
c) a copy of the latest passport of the UBO(s);
d) copy of the QID of the UBO(s) (if applicable);
e) copy of the Special Register (which is maintained by the entity and identifies the entities UBO).
Similar to the filings under the MOCI, entities established under QSTP are also required to submit their UBO information with the QSTP. The thresholds for determining the UBO are in accordance with the UBO Law.
The UBO form may be filed in English along with the following documents:
a) an overview of the ownership structure; and
b) copy of the valid identification document (QID / passport) of each of the UBOs and all documents evidencing the ownership structure and UBOs.
Whether incorporated in under the MOCI, QFZA or QSTP, the submission of the UBO (whether at the time of incorporation, or when the corporate licences are being renewed or amended) is a compulsory requirement which should be complied with to avoid application of fines, imprisonment and/or suspension of license to operate in Qatar.
For further information, please contact Ahmed Jaafir or Samiya F. Mitha.
Published in June 2023
