On 18 April 2021, the Ministry of Commerce and Industry (MoCI) reported the requirement of specific arrangements of Law number (1) of the year 2020 and its leader guidelines given by the Council of Ministers' choice number (12) of 2020 (altogether, the Regulations).
The Regulations concern the Unified Economic Register and the need to reveal data about a definitive gainful proprietor (UBO) of the element. The MoCI has expressed that it's anything but an obligatory prerequisite for candidates who present a solicitation for another, recharged or corrected business enrolment (CR) to give subtleties of the UBO to the significant substance.
Considering the MoCI's declaration, exposure of the UBO should be submitted along with the CR application structure within ten days of the date of utilization. In any case, the application will be dismissed. Candidates are likewise needed to keep a register of its UBO, keep all subtleties of the UBO consistently refreshed and unveil any alteration to such subtleties to the skillful office inside the MoCI.
The production of a Unified Economic Register will help advance a much more straightforward business climate, make the data regarding a definitive recipient all the more promptly available to outsiders and guarantee consistency with best worldwide practice regarding know-your-customer, hostile to illegal tax avoidance and against defilement guidelines.
It is crucial that you know about this update before commencing company formation in Qatar.
The identity of the UBO is determined based on the constitutional documents of a legal entity or arrangements entered into concerning that entity.
A UBO is defined under the Regulations as:
- a natural person or natural persons who, whether directly or indirectly, owns or controls not less than (20 percent) of the share capital of a legal entity or the voting rights therein;
- a natural person who, whether directly or indirectly, exercises legal or actual supervisory or controlling powers over the executive bodies or the general assembly of a legal entity or the performance of such entity; or
- In accordance with the applicable laws, a natural person holds a legal representation authority to act on behalf of a legal entity.
What must information be contained in the register?
The register, which each entity must maintain, should include, among other information, the following:
- name of each UBO as provided in their official identification documents (i.e. Qatari identification or passport);
- date and place of birth;
- address as provided in the official documents;
- the expiry date of the identification or passport;
- the date on which they became a UBO; and
- the shareholding percentage.
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Which legal entities are required to comply?
Under regulations, all forms of legal entities are required to disclose details of any UBO. This includes the following:
- individual establishments;
- commercial companies;
- natural or legal persons who carry out commercial agency businesses;
- branches of companies or agencies provided that such branches hold the same commercial registration number of the unified economic register of such company or agency; and
- legal arrangements such as:
- charity organizations;
- non-profitable organizations; and
- free professions (i.e. professions governed by their own regulations such as engineering offices, security services and health services).
- a listed public company or any of its subsidiaries in which the listed company owns a controlling share
- a company owned by the state or a governmental entity;
- foreign branches; and
- a joint venture company (pursuant to article 53 under the Commercial Companies Law).
Sanctions imposed for failing to make disclosure
The competent department within the MoCI may impose any or all of the following sanctions against those who violate the Regulations:
- order the violating company to submit regular reports on the remedial action taken;
- order the violating company to comply with certain instructions;
- suspend the managers, the board directors, the secretaries of the legal arrangement, the executive officers or administrators for a period not exceeding one year;
- suspend the business of the violating company for a period not exceeding one year; or
- revoke the commercial registration of the violating company.
In lieu of these latest developments, it is essential that everyone doing business or looking to do business in Qatar to take advice regarding the new law and comply with the same, failing to do so may attract the application of penalty.
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