The State of Qatar recently introduced Law No.1 of 2020 (the Unified Economic Register Law). The Unified Economic Register Law compels the Ministry of Commerce and Industry (MOCI) to establish a unified economic registry (the UE Registry), with the goal of encouraging transparency in economic and financial transactions (and creating a register of beneficial ownership).
We had previously published this article following the publishing of the Unified Economic Register Law but prior to the publishing of its implementing regulations. These regulations have now been published (Cabinet Decision No. 12 of 2020)(the Regulations) and the below article has been updated to take account of this development.
UNIFIED ECONOMIC REGISTRY
Article 2 of the Unified Economic Register Law provides that the UE Registry shall maintain the following registers/records (the Registers, that will together constitute the Unified Economic Register):
- the Unified Register for Real Beneficiaries (a register containing details of 'Real Beneficiaries' (as defined below));
- an entity's commercial registration;
- the Register of Legal Arrangements (containing details on trust structures and similar arrangements);
- the Register for Non-Profit Organizations (containing details on charitable organisations);
- the Register of Freelance Professionals (containing details on self-employed individuals); and
- any other similar record similar to those mentioned above.
The Regulations provide that MOCI will establish a secure information system (the Secure IT System) through which electronic equivalents of the Registers can be included in the Unified Economic Register and updated. Such information will be operated and managed in a manner as determined by MOCI, and approved by the Minister of Commerce and Industry.
QFC, QATAR FREE ZONES AUTHORITY, QATAR SCIENCE AND TECHNOLOGY PARK AND QATAR MEDIA CITY
As well as entities regulated by MOCI, the Regulations require the above authorities are required to obtain information on the Real Beneficiaries (as defined below) of the entities they licence or register and to link their databases to the Secure IT System.
UNIFIED ECONOMIC NUMBER
Pursuant to Article 3 of the Unified Economic Register Law all economic establishments, legal arrangements, non-profit organisations and freelance professionals will be issued a number on their registration (the Registration Number).
The Regulations clarify that the Registration Number will be a series of numbers and letters that will be granted to each entity on a one off basis to licensed entities and thereafter on the registration of an economic entity (the Registration Number may not be changed).
PROCESS FOR OBTAINING A UNIFIED ECONOMIC NUMBER ON REGISTRATION
An applicant for licensing, registration, or renewal of such registration is required to submit a form to MOCI together with supporting documentation in the standard manner, together with a Declaration of Real Beneficiaries (defined below).
Where such an applicant is a legal person or legal arrangement, they are required to attach a statement (the Declaration of Real Beneficiaries) of their 'Real Beneficiaries', defined by the Regulations as being in relation to 'Economic Establishments' (defined by the Regulations as including Qatari economic establishments and the branches thereof, as well as the branches of non-Qatari economic establishments operating in Qatar): "the physical person who holds, whether directly or indirectly, an effective controlling interest of no less than 20% of the company's capital or voting rights therein" (Real Beneficiaries).
BENEFICIAL OWNERSHIP INFORMATION
Article 5 of the Unified Economic Register Law compels legal persons and legal arrangements (such as a trust structure) to hold a register containing the same information as is contained in the Declaration of Real Beneficiaries (the Beneficial Ownership Register).
The Regulations set out the information required to be included in a submission of the Declaration of Real Beneficiaries as being:
- the name of a Real Beneficiary as shown in their official identity documents;
- the date and place of birth of the Real Beneficiary;
- a statement of the Real Beneficiary's nationality;
- the address of the Real Beneficiary as shown in the Real Beneficiary's official identity documents;
- the identification number of Qataris and residents of Qatar;
- the passport number for non-Qataris residing and not residing in Qatar;
- the date of issuance and expiry of the Real Beneficiary's official identity documents;
- the date on which a person became a Real Beneficiary;
- the percentage of the controlling interest in a company's capital or voting rights thereof that a Real Beneficiary holds;
- the means by which a Real Beneficiary exercises effective control over an economic establishment or legal arrangement; and
- the date of the last update of the Beneficial Ownership Register.
Economic establishments and legal arrangements are required to inform MOCI of all changes to the Declaration of Real Beneficiaries within thirty days of obtaining documents providing evidence of such a change. If it is not possible to obtain such documents, MOCI must be informed within ninety days from the date of knowledge of a change.
MOCI can conduct field visits at any time to view a copy of the Beneficial Ownership Register and all documents supporting the information contained in the Beneficial Ownership Register.
PUBLICALLY AVAILABLE DOCUMENTATION
Previously company information in Qatar was confidential, however the Unified Economic Register Law, at Article 6, compels MOCI to make 'Basic Information' (defined as being information which allows for the identification of the entity stated above and which specifies the legal structure, main characteristics and purpose for establishment of such an entity) relevant to the following entities available to the public:
- 'Economic Establishments' which are defined as a sole enterprise, company, or legal entity;
- 'Legal Arrangements' which are defined as a trust structure or any other similar legal structure;
- 'Non-Profit Organisations' which are defined as an entity established with the purpose of providing a public benefit; and
- 'Freelance Professionals' which are defined as self-employed individuals.
In order to exercise their right of access, members of the public will be able to make an application to MOCI to obtain an extract of the Unified Economic Register or a certificate of particular information, or a certificate of absence in the case of non-registration.
Article 7 of the Unified Economic Register Law provides that the MOCI must make Beneficial Ownership Information available to all law enforcement authorities and juridical bodies, as well as audit/monitoring authorities, financial institutions and businesses and non-profit professions as defined in the Anti-Money Laundering and Counter-Terrorism Law (Law No. 20 of 2019)(the AML Law) as well as tax authorities, and other public authorities.
The Beneficial Ownership Information will only be disclosed to financial institutions and businesses to the extent that it is necessary to carry out legally necessary due diligence procedures in connection with the AML Law.
TRANSFER OF INFORMATION
MOCI is authorised to exchange the Beneficial Ownership Information with parallel foreign authorities pursuant to Article 8 of the Unified Economic Register Law.
Penalties for breaching the Unified Economic Register Law include (pursuant to Articles 11 and 12 of the Unified Economic Registry Law):
- MOCI can issue a written warning;
- the managers/directors/trustees of economic establishments/legal arrangements (such as trust structures) can be suspended for up to one year;
- the licence of the entity in breach can be suspended for up to one year;
- the licence/registration of the entity in breach can be cancelled; and
- in relation to Article 5 of the Unified Economic Registry Law (in relation to the provision of beneficial ownership information) a breach can be punishable by imprisonment for a period not exceeding two years and/or a fine not exceeding QAR 500,000.
For further information in relation to the Unified Economic Register please contact Ahmad Anani or Alistair Stewart.