Confidence That Keeps You Moving Forward
At Shams Free Zone, compliance is a cornerstone of sustainable business. Below, you’ll find essential policy and regulation documents that outline the legal and operational framework we follow.
Please note all information is subject to updates based on UAE government directives.
These documents are regularly updated to reflect the latest directives issued by the UAE Government.
As part of the UAE government’s efforts to prevent money-laundering, a series of guidelines for designated non-financial businesses and professions (“DNFBPs”) have been recently issued.
Such DNFBPs provide coverage amidst various high-risk industries, including:
In light of the above, alongside supplemental guidance, the Ministry of Economy has issued circulars providing in-depth details of anti-money laundering practices in connection with the DNFBPs.
For more details about the circulars, please refer to the below links.
The UAE has demonstrated a strong commitment to executing UN Security Council Resolutions (UNSCRs) and complying with UN sanctions regimes. As a result, through Cabinet Resolution No. 74 of 2020, the UAE is enforcing the UNSCRs on the suppression and combating terrorism, countering terrorist financing, and countering the financing of the proliferation of weapons of mass destruction, specifically targeted financial sanctions (TFS) regimes, as defined by the UN.
Consistent with the UAE government’s ongoing efforts to minimize risk exposure, the Ministry of Economy has issued a list of high-risk jurisdictions and jurisdictions subject to increased monitoring.
Designated non-financial business and professions are required to, on a regular basis, review the lists and implement necessary actions. For further details regarding the Ministry of Economy’s circulars, please refer to the circular below.
A cabinet decision number (10) of 2019 concerning the Implementing Regulation of Decree Law No (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations has been issued, which specifies DNFBP obligations, some of which were later amended via The Cabinet Resolution No. (24) of 2022 Amending some provisions of Cabinet Resolution No. (10) of 2019 On the Executive Regulations of Federal decree-Law No. (20) of 2018 on Combating Money Laundering and the Financing of Terrorism and illegal Organisations.
The Cabinet Decision No. (10) of 2019
Concerning the Implementing Regulation of Decree Law No (20) of 2018 on Anti-Money Laundering and Combatting the Financing of Terrorism and Illegal Organisations.
To know more about how to register in the goAML platform please check the following guides:
The UAE, as an economic hub for investment and growth, has implemented numerous compliances measures to combat money laundering and terrorism financing.
One such measure, in line with the UAE government’s objectives, is beneficial ownership. It is paramount to establish a concise ownership structure of companies incorporated within the UAE.
The directive requires companies to maintain information regarding beneficial ownership, shareholders, and other relevant members. Article (4) of UAE Cabinet Resolution No. (109) of 2023 (“Resolution”) mandates that the legal person should be licensed and provide the following basic data:
Moreover, Article (11) of the Resolution mandates the following:
As prescribed under Cabinet Resolution No. (132) of 2023, administrative penalties shall be enforced against violators of the provisions of Cabinet Resolution No. (109) of 2023 regulating Beneficial Owner Procedures.
The UAE Ministry of Economy has issued Cabinet Decision Number 114 of 2021, which outlines the procedure for appealing against the administrative penalties if a legal person wishes to contest them. The legal person is required to initiate the appeal process within 30 days of receiving notification of the administrative fine. The decision regarding the appeal will depend on the provision of sufficient evidence to support the contested matter.
The UAE Ministry of Economy has provided clarity and guidance regarding the risks and vulnerabilities of Nominee Shareholders and Directors.
Although a common phenomenon, nominee arrangements pose risks, that must be mitigated to ensure transparency.
For further information related to such nominee arrangements, please refer to the circular issued by the UAE Ministry of Economy.
An amended set of Economic Substance Regulations (‘ESR’) in the United Arab Emirates (‘UAE’) was issued on 10 August 2020, by way of Cabinet Resolution No. 57 of 2020, thereby revoking the original Cabinet Decision No. 31 of 2019. This was followed by the release of Ministerial Decision No. 100 of 2020, dated 19 August 2020 serving as supplementary guidance with an updated Relevant Activities Guide attached as appendix (collectively referred to as ‘New UAE ESR’). The frequently asked questions (‘FAQs’) on the Ministry of Finance (‘MoF’) website have also been updated to factor in the provisions of the New UAE ESR.
Please refer to the New UAE ESR-related documents available on the following links:
Please note that the New UAE ESR is effective from 1 January 2019 and apply to financial years starting on or after 1 January 2019 to all licensees operating within Shams. Accordingly, Shams licensees are required to re-assess their business activities in light of the New UAE ESR.
The New UAE ESR mandates licensees to file a notification through the MoF’s dedicated ESR portal (‘MoFPortal’), within six (6) months of the licensee’s financial year-end, only if a Relevant Activity has been undertaken during the Reportable Period. The portal has gone live in December 2020. Accordingly, all Shams licensees which undertake the relevant activity(ies) will be required to file a notification on the MoF Portal by the 31st January 2021 (even where they have previously filed such notifications with Shams through email).
Licensees and/or Exempted Licensees that fail to submit their Notification along with the required supporting documents by 31st January 2021 will be issued a penalty of AED 20,000 under Article 13 of Decision 57 for failure to provide a Notification.
ES reports
The ES reports will also need to be uploaded onto the MoF Portal within 12 months, following the end of the licensee’s financial year-end or by 31st January 2021.
Licensees and/or Exempted Licensees (where applicable) that fail to submit their Economic Substance Report within the aforementioned period shall be subject to a penalty of AED 50,000 under Article 14 of Decision 57 for failure to provide an Economic Substance Report.
MoF Portal has been launched and can be accessed using the below-mentioned link:
Economic Substance Regulations
Click here to view the Ministry of Finance Webinar on ‘Economic Substance Regulation Filing Portal’
Click here to view Shams Economic Substance Regulation webinar
Please be advised that Shams member entities are responsible in ensuring full compliance with the New UAE ESR. For any uncertainty regarding the application of the New UAE ESR, Shams recommends consulting a professional advisor.
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