How is an ultimate beneficial owner defined? How do ultimate beneficial owner (UBO) disclosure requirements differ across the world? What information, if any, needs to be collected for due diligence, and where does that data reside?
It is time to take stock of the world of UBO definitions, disclosures, and data—and consider its role in the fight against financial crime and money laundering.
The Financial Action Task Force (FATF) defines a UBO as “the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.” The FATF is a global watchdog for money laundering and terrorist financing. It is responsible for setting global standards and recommendations for the anti-financial crime priorities of countries around the world. As a result, FATF’s definition of a UBO is a good place to start.
While jurisdictions may interpret the specifics of this definition differently, it is commonly agreed that an ultimate beneficial owner or UBO owns more than 25% of a company’s shares or controls more than 25% of the voting rights. However, determining the UBO of a company is not always a straightforward task.
This complexity has allowed legal business structures to act as vehicles for money laundering and terrorist financing. For example, the registered legal owner of a property in the United Kingdom may be a company registered overseas, which is then owned by a different company in another jurisdiction. This other jurisdiction may be the Cayman Islands, the British Virgin Islands, or another “offshore” destination—commonly defined by a lack of UBO disclosure requirements.
Individuals looking to hide criminal behavior or sanctions status may exploit differences in UBO requirements—or the absence of such requirements in certain jurisdictions—by layering ownership through several companies operating in different countries. This strategy can effectively obscure ownership. Regulators and legitimate businesses, such as banks or corporate entities, may face serious challenges in uncovering a nefarious UBO hidden within a complex counterparty network. Tracing ownership becomes especially difficult once it passes through an offshore jurisdiction where little to no information is available on ownership layers.
In response to the issue of anonymous shell companies used to evade sanctions, hide the proceeds of organized crime, and perpetrate corruption, FATF issued updated guidance in March 2023. This guidance agreed on “…tougher global beneficial ownership standards in its Recommendation 24 by requiring countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies.”
FATF also recommends a range of supplementary measures to determine information about the ultimate beneficial owner of a company. These include holding beneficial ownership information obtained by regulated financial institutions and professionals in a public register, or having it held by regulators or stock exchanges.
Despite FATF’s guidance, jurisdictions differ on what type of UBO information must be collected and how UBOs should be defined. So how do laws around UBO disclosure vary between jurisdictions?
UK
In the United Kingdom, there are beneficial ownership registers for companies, properties, land, and trusts. In February 2022, the UK Government sought to increase the accuracy of some of these registers, and in March 2022 introduced new legislation concerning overseas entities owning property in the UK. According to the UK Government, “The new Register of Overseas Entities is held by Companies House and requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers. There will be severe sanctions for those who do not comply, including restrictions on buying, selling, transferring, leasing, or charging their land or property in the UK.” A non-public register for the UBOs of trusts was also introduced in the UK in 2017 and plans to expand this were proposed last year.
In March 2024, key changes were proposed to the Economic Crime and Corporate Transparency Act (ECCTA) to create greater transparency around the incorporation of legal entities in the UK. Among the new requirements are enhanced powers for Companies House to challenge submitted information if incorrect, and to request electronic verification checks for persons of significant control, directors, and other relevant parties.
EU
The 6th Anti-Money Laundering Directive (6MLD) standardizes UBO definitions across the European Union, which covers both ownership and control.
The EU definition of a UBO includes an individual with more than 25% ownership or voting rights, or other ownership interests, whether directly or indirectly. Indirect ownership needs to be calculated through the full ownership chain. The 25% standard applies broadly; however, for certain high-risk sectors, Member States may impose lower UBO thresholds—down to a minimum of 15%—provided they receive approval from the European Commission.
What constitutes “control” includes rights to appoint/remove board members, veto rights, and influence via agreements or family ties.
Member States are required to have public company beneficial ownership registers. Rules applying to UBOs must be implemented by 10 July 2026, and Member States have 2 years to align national registers and access procedures. The registers must include personal details (name, DOB, nationality, residence); nature and extent of ownership/control; full ownership structure. Public access to these registers is allowed based on legitimate interest (e.g., NGOs, journalists, AML/CFT providers).
US
The US Corporate Transparency Act (CTA) was enacted to enhance corporate ownership transparency and combat illicit activities. Its goal was to prevent the misuse of corporations and limited liability companies for criminal purposes—such as money laundering, fraud, and the financing of terrorism—by mandating that companies report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
In September 2022, FinCEN finalized a rule under the CTA requiring many business entities to report beneficial ownership information (BOI), thereby increasing visibility into company ownership and control structures.
In March 2025, FinCEN issued an interim final rule that significantly altered the CTA’s implementation. This new rule eliminates BOI reporting obligations and enforcement actions for entities formed under U.S. state or tribal laws, as well as for U.S. persons identified as beneficial owners. The revised rule narrows the definition of a “reporting company” to include only foreign entities registered to do business in the U.S., thereby exempting all U.S.-formed entities and their beneficial owners from BOI reporting requirements.
Asia
Australia is currently considering reforms to its UBO disclosure regime to improve corporate transparency and align with international standards, such as those set by the FATF. The proposed changes include establishing a publicly accessible, government-run central register of beneficial ownership, expanding disclosure requirements to cover unlisted companies, certain trusts, and entities with significant control, and introducing risk-based compliance measures. The reforms also propose enhanced enforcement powers for the Australian Securities and Investments Commission (ASIC) and privacy protections for vulnerable individuals, aiming to balance transparency with personal safety.
Singapore-registered companies have been required to maintain a Register of Registrable Controllers (RORC) since 2017. The RORC must also be filed with the Accounting and Corporate Regulatory Authority (ACRA), who may share RORC information with law enforcement agencies upon request.
The Companies Commission of Malaysia has issued updated guidelines on beneficial ownership reporting requirements and amended its Companies Act to improve corporate transparency.
Similarly, China established a national UBO registry with filing and reporting obligations as part of overall AML/CTF revisions with effect from November 1, 2024.
One of the key criticisms of the fragmented approach to UBO reporting, discovery, and anti-money laundering (AML) is the lack of harmonized Know Your Business (KYB) datasets. Additionally, definitions around concepts such as what constitutes a beneficial owner differ worldwide and continue to evolve, compounding the complexity.
While technology exists to gather and analyze relevant UBO data, determining what data is needed for risk analysis and management, onboarding, due diligence, risk monitoring, and compliance remains a challenge.
Moody’s is a leading source for understanding beneficial ownership and offers extensive company information with detailed corporate structures. Our tools help create transparency and visualize complex control and influence maps using AI and multiple datasets that span jurisdictions.
Maxsight™ can help teams identify ultimate beneficial owners across complex structures using AI-powered entity resolution and global datasets. Streamline onboarding, automate sanctions screening, and manage supplier risk profiles with award-winning global entity and ownership information.
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Harnessing our innovative technology, customers can automate AI-enabled screening and swift onboarding. Moody's can then support UBO discovery, entity verification, and ongoing monitoring of third-party risk across a business network in near real-time.
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