Beneficial Ownership – Transparency of Ultimate Beneficial Owners

The concept of the beneficial owner (BO) refers to the natural person who ultimately controls a legal entity (e.g. company, foundation, trust) or benefits economically from it, regardless of formal ownership structures. Beneficial ownership transparency is a central instrument for combating money laundering, tax evasion, corruption and terrorist financing.

• Threshold: A natural person is typically considered a beneficial owner with a direct or indirect shareholding of more than 25% (EU standard) or control through other means.
• Registers: Many jurisdictions maintain public or authority-accessible registers of beneficial owners (transparency registers).
• FATF standard: FATF Recommendations (in particular R.24 and R.25) set the global minimum standard for BO transparency.
• EU implementation: EU Anti-Money Laundering Directives (AMLD) require member states to establish BO registers.
• AMLR 2024: The new EU AML Regulation (EU) 2024/1624 (AMLR) will be directly applicable from 10 July 2027, further tightening BO requirements.

The concept of beneficial ownership developed in the context of the international fight against money laundering and tax evasion. The FATF integrated BO requirements into its Recommendations for the first time in 2003 (R.33, R.34). The 2012 revision further strengthened Recommendations R.24 (legal persons) and R.25 (trusts).

At EU level, the 4th Anti-Money Laundering Directive (2015) was the first to require establishment of national BO registers. The 5th AMLD (2018) extended access to the general public. The Court of Justice of the EU (CJEU) restricted public access to BO registers on data protection grounds in 2022 (joined cases C-37/20 and C-601/20 (WM and Sovim SA)). Internationally, BO transparency has been further reinforced through the OECD/G20 BEPS Action Plan (notably Action 12 on Mandatory Disclosure Rules) and the Global Forum on Transparency (including peer reviews on EOIR and AEOI).

In 2021, the United States enacted the Corporate Transparency Act (CTA), signed as part of the National Defense Authorization Act (NDAA). From 1 January 2024, covered companies are required to report their beneficial owners to FinCEN (Financial Crimes Enforcement Network). The CTA marks a historic shift in the US position on BO transparency.

The United Kingdom introduced a public PSC Register (People with Significant Control) in 2016, one of the first of its kind, which served as a model for numerous other jurisdictions and significantly influenced EU developments.

BO transparency requirements apply globally, though the specific scope varies by jurisdiction. Typically covered are: limited liability companies, corporations, partnerships, foundations, trusts and similar legal arrangements. Entities required to report are the legal persons themselves as well as notaries, lawyers and other professionals as part of their AML due diligence obligations.

• Identification of the beneficial owner(s) (generally natural persons with more than 25% shareholding or control).
• Maintenance of internal BO records by the legal entity.
• Registration with a national BO register (transparency register) including name, date of birth, nationality, residence and nature/extent of interest.
• Update obligation upon changes (typically within 14–30 days).
• Access for authorities, and in many countries also for the public (with restrictions following the CJEU ruling of 2022 in the EU).

2 updates:
- FATF Guidance on R.24 (March 2022) and R.25 (November 2023) missing from key_dates
- No mention of AMLR application date (10 July 2027) for new BO rules
5 clarifications.
3 notes.