Bahrain-based companies are now required to identify their Ultimate Beneficial Owners (UBOs)
The Kingdom of Bahrain has recently joined the ranks of numerous other jurisdictions around the world that requires companies incorporated in the country to provide details of their Ultimate Beneficial Owners (UBOs) – i.e. the natural person or persons who satisfy the UBO criteria.
Resolution Number 83 of 2020 regarding the Criteria, Conditions and Rules Governing the Disclosure of Ultimate Beneficial Owner; which came into force earlier this year (the Resolution) sets out the rules and guidance for companies in Bahrain to register those who fall within the definition contained within the legislation with the Ministry of Industry, Commerce and Tourism (MOICT).
The Resolution applies to all companies incorporated in the Kingdom of Bahrain and branches of foreign companies who have a Commercial Registration (CR) number (the Registered Person(s)); with the exception of those licensed by the Central Bank of Bahrain (the CBB).
Identifying the UBO
Article 3 of the Resolution provides that where a natural person satisfies all or some of the following conditions, they are required to register as an UBO:
- owning or controlling, directly or indirectly, 10% or more of the capital or voting rights of the Registered Person;
- where the Registered Person is a legal entity owned by another legal entity, the UBO is the natural person who is the ultimate owner of the ownership chain or the person who has effective control over it;
- having the ability to influence decisions in the Registered Person either directly though means such as personal communications or through participation in the financing of the project, family relations or through any kind of contract, arrangement, understanding, relationship or through a hierarchical entity (in the ownership chain of legal entities);
- contributing to the financing of the business of the Registered Person or its assets, or benefiting from transactions made in its favour;
- having direct or indirect control of the operations of the Registered Person by way of a management agreement, power of attorney or similar instrument;
- having ultimate effective control, including through a series of ownerships of other means of control other than direct control of the Registered Person;
- exercising control by way of occupying a management position within the Registered Person in such a way that affects the strategic decisions of influences the general direction of the Registered Person; or
- any other conditions, criteria and rules as determined by the Minister of the MOICT from time to time.
The Resolution makes clear that where multiple people satisfy the above criteria, then the relevant information and documents should be submitted to the MOICT in relation to each UBO.
The accompanying guidance to the Resolution also confirms that a single person may be a UBO for multiple Registered Persons.