Commerce Ministry clarifies actual beneficiary need not be company owner

The corridors of the Ministry of Commerce and Industry have seen a significant influx of visitors eager to determine who benefits from companies with expired or revoked licenses from years ago, and whether they are eligible for re-registration. Many company owners have also struggled to locate their old records due to the lack of visibility.

Several license holders have requested additional time to register the actual beneficiary, citing technical and procedural obstacles that prevent registration during the current period. These issues include the absence of the authorized manager, who may be abroad, outdated company data, or the death of the manager. Another group of license holders seeks to dissolve and liquidate the companies listed under their records, noting that this process can take anywhere from three weeks to a month or more.

The Ministry of Commerce clarified that the beneficial owner does not necessarily have to hold capital shares or voting rights in the company. The beneficial owner may exert actual or legal control or influence through any means, whether direct or indirect, or may act as the company’s legal representative.

The purpose of declaring the beneficial owner is to promote transparency in economic and financial transactions. This initiative aims to ensure that such information is accessible to law enforcement agencies, judicial authorities, and regulatory bodies, in line with the recommendations of the Financial Action Task Force (FATF).

The Ministry has opened its centers to respond to inquiries from visitors, addressing citizens’ questions about the actual beneficiary. It also provides answers regarding the actual beneficiary of industrial licenses at the Public Authority for Industry Center and the Small and Medium Enterprises Center in Al-Siddiq District, which is specifically designated for owners of small and medium enterprises.

A source told Al Jarida that the Ministry has been receiving inquiries regarding licenses and records dating back to the 1960s and 1970s, as well as companies that obtained commercial records but never issued licenses.

The source clarified that registration is mandatory, even if a commercial license has not been issued. Additionally, Gulf citizens and foreigners can register using their passport number through the legal entity registration service on the portal, and then complete their registration as the actual beneficiary after obtaining the identification number.

The source stated that by registering the actual beneficiary, the Ministry of Commerce will be able to track the flow of funds in accordance with FATF recommendations. This process will also help identify the economic strength, the number of actual owners and market operators, the nature of active and suspended activities, and the sources of funds, particularly considering that some licenses have been revoked and others are no longer in use.

Several reviewers inquired about the situation where the company’s current manager is unavailable due to being abroad. In response, the Ministry of Commerce clarified that if the manager is out of the country, another individual can be authorized to access the system through an official power of attorney or proof from the manager via the competent department.

In cases where the manager has passed away, authorization can be granted through the competent department via a power of attorney from the heirs to the designated person who will be registering. Additionally, heirs of the owner can be authorized to open permissions in the actual beneficiary system.

The Ministry also addressed inquiries regarding how students residing abroad can register, noting that the system currently does not approve applications from them.

Regarding the legal age for the beneficial owner, the Ministry of Commerce clarified that there is no specific age requirement outlined in the decision. However, it is essential to identify the natural person who actually owns, controls, or exercises ultimate control over the company.

The Ministry of Commerce emphasized several key points regarding the procedures for identifying the actual beneficiary. The decision was issued to safeguard company and institution data from exploitation or abuse and to assist the state’s oversight agencies, financial institutions, and designated non-financial businesses in verifying, identifying, and obtaining accurate information about the legal entities involved in financial or commercial transactions. By compiling and establishing a comprehensive database, the ministry aims to strengthen oversight systems and help reduce suspicious activities.

The beneficial owner is a legal requirement for companies and commercial institutions to identify the natural person who holds actual and ultimate control over the company. This person could be the company’s director, key decision-maker, largest shareholder, or even all of its partners.