How does UAE AML law regulate nominee shareholders and nominee directors?
Cabinet Resolution No. 134 of 2025 introduces express definitions and compliance obligations relating to nominee arrangements, a significant change from the previous Executive Regulations. A nominee shareholder is defined in Article 1 as a natural or legal person who exercises voting rights or receives dividends in accordance with the instructions of a nominator but who is explicitly not treated as the beneficial owner by virtue of holding shares in a nominee capacity. A nominee director is similarly defined as a person who performs management functions in a company on behalf of a nominator, again without being regarded as the beneficial owner.
The regulation of nominees matters because they create a layer of opacity between the formal corporate record and the true controller of an entity. Under Article 19(2)(c) of Federal Decree-Law No. 10 of 2025, the Executive Regulations specifically govern obligations relating to companies, nominee directors, and nominee shareholders. Regulated entities encountering nominee arrangements must look through the nominee to identify the nominator as the actual beneficial owner and apply CDD accordingly. Article 35(1) of FDL 10/2025 makes it a criminal offence to provide false or misleading information about the beneficial owner to any competent authority or regulated entity, this directly applies to nominees who obscure the true nominator. Entities must document the nominee relationship and update this information within 15 working days of any change under the beneficial owner procedures framework.
Legal Reference (UAE):
- Cabinet Resolution No. 134 of 2025, Article 1 — definitions of Nominee Shareholder, Nominee Director, and Nominator
- Federal Decree-Law No. 10 of 2025, Article 19(2)(c) — obligations for companies, nominees, and nominators; Article 35(1) — offence for providing false beneficial owner information
For more details, consult the full text of Cabinet Resolution No. 134 of 2025 or seek guidance from your AML compliance officer.