Saudi Arabia has recently introduced the Ultimate Beneficial Ownership Rules (UBO), a significant step toward enhancing corporate transparency and aligning with global standards.
Ultimate Beneficial Ownership Rules
A UBO is typically defined as someone who owns at least 25% of a company’s share capital or voting rights or has significant influence over the company’s decisions. This blog discusses the key aspects of the new rules, their implications for businesses, and how you can ensure compliance.
Whether you’re a business owner or an investor in the Kingdom, understanding these regulations is essential for maintaining regulatory compliance and avoiding penalties.
The new Ultimate Beneficial Ownership rules in Saudi Arabia were implemented, effective April 3, 2025. As a result, most companies must disclose their UBOs to the Ministry of Commerce. This initiative aims to enhance corporate transparency, align with international standards, and combat financial crimes like money laundering.
The rules mandate regular filings and require companies to report any changes in UBO information within 15 days, with potential penalties for non-compliance.
Exemptions
Certain entities that are exempt from the UBO disclosure requirement include:
Publicly Listed Companies: Companies listed on the Saudi stock exchange.
State-Owned Entities: Companies wholly or partially owned by the state.
Companies Under Liquidation: Companies undergoing liquidation under the bankruptcy law.
Key Changes and Requirements
Disclosure Obligation: Most companies in Saudi Arabia must disclose their UBOs to the Ministry of Commerce, including information about who ultimately owns or controls them.
Regular Filings: Companies must make regular filings with the Ministry, including an annual confirmation of UBO information and reporting any changes within 15 days.
Penalties: Failure to comply with the UBO rules can result in penalties, including fines of up to SAR 500,000.
Exemptions: Publicly listed companies, state-owned entities, and companies undergoing liquidation are exempt from these rules.
Compliance: The Ministry of Commerce has established a UBO register to manage the disclosure and maintenance of UBO data.
Alignment with International Standards: These rules are part of a global effort to combat financial crimes and align with international recommendations, particularly those of the Financial Action Task Force (FATF).
UBO filing Saudi Arabia
UBO filing in Saudi Arabia requires companies to disclose their ultimate beneficial owners to the Ministry of Commerce. This regulation, which took effect on April 3, 2025, aims to enhance corporate transparency and align with international standards.
Key Requirements
Company Registration: Companies must register their ultimate beneficial owners during incorporation.
Maintaining Updated Records: Companies must maintain updated records of their ultimate beneficial owners.
Notification of Changes: Companies must notify the Ministry of Commerce of changes to their ultimate beneficial owners within 15 days.
UBO Updates and Requirements for Existing Companies
All existing companies in Saudi Arabia need to meet the UBO update requirements for existing companies annually by doing the following tasks:
Annual Filings: Existing companies must confirm their UBO details annually within 30 days before their registration anniversary.
UBO Register: Companies must maintain a UBO register containing the UBO’s name, national ID or passport details, residential address, contact information, and the criteria used to determine their UBO.
Notification of Changes: Companies must notify the Ministry of Commerce of any changes to their UBO information within 15 days of the change.
Disclosure Requirements: Companies must disclose their UBO information to the Ministry of Commerce, including details of their ultimate beneficial owners, such as their name, national ID or passport details, and residential address.
How can the Helpline Group in Saudi Arabia help?
Helpline Group, backed by a strong and experienced team, brings over 25 years of expertise in company registration, KSA, offering a seamless, hassle-free experience for clients, including foreigners.
Our seasoned professionals possess in-depth knowledge of the new Ultimate Beneficial Ownership rules introduced by the Saudi Arabian government, helping businesspersons conform to the latest regulations.
With a global presence and a tailored approach, we ensure that your business setup is handled with precision and professionalism and the latest UBO Rules are followed.
