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).
- Legal practitioners engaged in certain consulting and transactional activities (regulated by
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)
- Access the SACM registration portal here:
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)
- Access the goAML Reporting Entity portal via:
Support and Assistance
If you encounter technical issues during registration, you may contact:
- Email: goaml@cbuae.gov.ae
- MOE Support Hotline: 800-1222
MOE
Compliance Inspections at SPC Free Zone
UBO & AML Inspection Process
Sharjah Publishing City Free Zone (SPC Free Zone) is committed to maintaining the highest standards of transparency, compliance, and regulatory integrity in line with the laws and regulations of the UAE.
As part of its role as a Company Registrar and Supervisory Authority, SPC Free Zone conducts regulatory inspections in accordance with Cabinet Decision No. 132 of 2023 and Cabinet Decision No. 109 of 2023. These inspections help ensure that registered companies comply with Ultimate Beneficial Owner (UBO) and Anti-Money Laundering / Counter-Terrorism Financing (AML/CFT) requirements.
SPC Free Zone conducts two main types of inspections, depending on the company’s activity and risk profile.
- UBO (Ultimate Beneficial Owner) Inspection
UBO inspections focus on ownership transparency and ensure that companies have accurately disclosed the individuals who ultimately own or control the business. The following details are reviewed during the UBO inspection:
- Shareholders and ownership structure
- Ultimate Beneficial Owners (UBOs)
- Accuracy of records in the Entity Register
- Business plan
- Document confirming business activity
- Proof of address of all stakeholders
- Company’s corporate bank statement
- Board of meeting minutes (if applicable)
Key Requirement
Any individual who owns or controls 25% or more of the company, or exercises effective control, must be declared.
- UBO inspections apply to all SPC Free Zone companies.
- AML / CFT Inspection
Purpose
AML inspections assess whether a company is complying with the UAE AML/CFT framework to prevent money laundering, terrorism financing, and related financial crimes.
Objectives
- Verifying compliance with AML/CFT obligations
- Evaluating internal controls and risk-management measures
- Ensuring transparency in business activities and customer relationships
- Supporting the UAE’s national financial security objectives
- Identifying gaps and guiding corrective measures
Scope
The scope of an AML inspection depends on the following details of the company:
- Business activity
- Risk classification
- Compliance history
- AML inspections mainly apply to higher-risk businesses, including DNFBPs.
Step-by-Step Inspection Process
Step 1: Inspection Notification
Companies will receive an official notification from SPC Free Zone outlining:
Type of inspection (UBO or AML)
- Inspection format (on-site or remote)
- Inspection date and timeframe
- Required documents and information
- Purpose and scope of the inspection
Step 2: Preparation Before the Inspection
To ensure a smooth inspection, companies should:
- Review company records and documentation.
- Ensure UBO information is accurate and up to date.
- Prepare AML/CFT policies and procedures (if applicable).
- Companies are required to share the requested information and documents within 14 days of receiving the inspection notification.
- Ensure relevant stakeholders attend the inspection meeting.
Timely preparation helps avoid delays, warnings, or penalties.
Step 3: Inspection Meeting
During the inspection, SPC Free Zone may:
- Review submitted documents
- Ask clarification questions
- Verify business activities and ownership details
- Assess AML controls (where applicable)
Inspections may be conducted remotely or on-site.
Step 4: After the Inspection
Following the inspection, companies may receive:
- A Remediation Plan, outlining required corrective actions and deadlines (if applicable), or
- A Completion Notification, confirming the inspection has been successfully closed
Depending on the type of inspection being conducted, SPC Free Zone may request the following documents:
- Entity Registry
- Board meeting minutes
- Financial statements or records of accounts
- Proof of business activity (invoices, website, brochures)
- Address verification documents
Additional Requirements for DNFBPs (AML Inspections)
Companies classified as Designated Non-Financial Businesses and Professions (DNFBPs) may be required to provide additional AML/CFT documentation, including:
- AML/CFT policies and procedures
- Risk assessment reports
- KYC and UBO records
- Compliance officer details
- AML reporting history
- Training and audit records
- Benefits of compliance
Companies that maintain timely and rigorous compliance measures benefit from:
- Smooth and efficient inspections
- No delays in licensing or renewals
Consequences of Non-Compliance
Failure to comply with the regulations may result in:
- Written warnings
- Delays in processing company services or license renewal
- Administrative or financial penalties
- Further regulatory action
Failure to respond to or submit requested information within 14 days, in accordance with Cabinet Decision No. 132 of 2023, may lead to enforcement measures.
Conclusion
SPC Free Zone is committed to ensuring a transparent, secure, and business-friendly environment.
By clearly distinguishing between UBO inspections (ownership transparency) and AML inspections (financial crime prevention), SPC Free Zone applies a proportionate, risk-based supervisory approach.
Early preparation, accurate records, and timely cooperation go a long way into ensuring a smooth inspection experience, supporting your long-term business success in the UAE.
