How an ultimate beneficial owner is identified
The search runs up the ownership chain, through every holding company, until it reaches people. There are two tests, ownership and control, and the thresholds differ by jurisdiction.
- EU today: a shareholding of 25% plus one share, or an ownership interest of more than 25%, indicates ownership, and a Member State may set a lower percentage (Directive (EU) 2015/849, Article 3).
- EU from 10 July 2027: 25% or more of the shares, voting rights or other ownership interest, with indirect holdings multiplied along each chain and added together (Regulation (EU) 2024/1624, Article 52).
- UK: more than 25% of the shares or voting rights, or control by other means (Money Laundering Regulations 2017, regulation 5).
- Control by other means counts in the EU too, whatever the shareholding.
When no ultimate beneficial owner can be found
Where no such person is identified after every possible means, the senior managing official is treated as the beneficial owner, and the firm records what it did. For a trust, the settlor, the trustees, any protector and the beneficiaries are all beneficial owners.
Why ultimate beneficial owners matter at onboarding
Identifying the UBO is part of customer due diligence on every business customer, and the firm takes reasonable measures to verify the person's identity. The owners found are then screened for sanctions and political exposure.
Complex structures are where onboarding slows: layers of holding companies in several countries, nominee shareholders, trusts. EU Member States hold beneficial ownership information in central registers (Article 30), but UK law bars relying solely on the registrar's information.
The EU's AML Regulation also lets the Commission set a lower threshold, of 15% at most as a rule, for categories of company exposed to higher risk (Article 52).
UBO, shareholder or director?
- Shareholder
- The legal owner on the register, which may be a company or a nominee. The UBO is the person at the end of the chain.
- Director
- Manages the company. A senior manager is treated as the beneficial owner only where no owner or controller can be identified.
- Person with significant control
- The UK company-law term behind the public register. The Money Laundering Regulations 2017 use its conditions as one test of control.
Where an ultimate beneficial owner shows up in a platform
Modules that do the work
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
Platforms that need it
Guides that go deeper
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/849, the Anti-Money Laundering Directive, consolidated (EUR-Lex)
- Regulation (EU) 2024/1624, the AML Regulation (EUR-Lex)
- Money Laundering Regulations 2017 (legislation.gov.uk)
- FATF Glossary: beneficial owner
General information, not legal advice: what applies to you depends on your services and your market.