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Uganda Introduces Beneficial Ownership Determination Requirements
Kampala, Uganda - In a move aimed at enhancing transparency and combating money laundering, the Ugandan government has introduced requirements for beneficial ownership determination for companies registered under the Companies Act 2012.
Background
The introduction of these regulations comes after the recent amendment to the Companies (Amendment) Act 2022, which requires all companies to maintain a register of beneficial owners. The Uganda Registration Services Bureau (URSB), responsible for enforcing this requirement, has given companies until February 8th to comply with the new rules.
Key Requirements
According to the Beneficial Ownership Regulations 2023, all private and public companies, including those registered as foreign companies or branches, are required to maintain a register of beneficial owners. The register must contain detailed information about each beneficial owner, including:
- Name
- National identification number
- Occupation
- Postal address
- Mobile telephone number
- Tax identification number
- Email address
- Immigration status
Penalties for Non-Compliance
Companies that fail to comply with the new regulations risk facing penalties, including:
- Daily default fines of approximately USD 135 for failure to keep a register of beneficial owners or notify the registrar of changes in beneficial ownership.
- Companies are also required to notify the registrar of companies using a prescribed form within 14 days of creating the register and any subsequent changes.
International Standards
The introduction of these regulations is part of Uganda’s efforts to meet international standards on combating money laundering and terrorist financing. The country has committed to implementing the Financial Action Task Force (FATF) recommendations, which require countries to identify and record the beneficial ownership information for all legal entities.
Industry Concerns
Industry experts have raised concerns about the complexity of determining beneficial ownership in cases where companies have listed shares or multiple shareholders. However, the regulations do not provide a percentage threshold beyond which a beneficial owner is required to be disclosed, leaving companies with the responsibility of identifying every individual who has ultimate control over the company.
Guidance and Support
The URSB has issued guidance on the new regulations, providing a template for companies to use when registering their beneficial owners. Companies are advised to carefully review and comply with the new regulations to avoid penalties and ensure transparency in their operations.