Business
What Is a UBO? Beneficial Ownership Rules for International Companies (2026)
· 6 min read
Author: Vinícius Cavalcanti · Reviewer: Nathan Gomes
Key points
- The ultimate beneficial owner (UBO) is the individual who ultimately owns or controls a company, trust or foundation, however many companies sit in between.
- The most common test is ownership or control of 25% or more, but control by other means, such as voting agreements or the power to appoint directors, also counts.
- Most financial centres now keep a register of beneficial owners. Some are public, most are open only to authorities and people with a legitimate interest.
- From 10 July 2027, the EU Anti-Money Laundering Regulation harmonises the rules across the EU at '25% or more', with the option of lowering the threshold to 15% for higher-risk entities.
- Since March 2025, companies formed in the United States no longer report beneficial owners to FinCEN, but banks and the IRS still identify them.
What is a UBO?
What is a UBO? The ultimate beneficial owner is the natural person who, directly or indirectly, owns or controls a legal entity or arrangement, or on whose behalf a transaction is carried out. A company owned by a holding company in another country, which is in turn owned by a trust, still has a UBO: the individuals at the end of the chain. Nominee shareholders and directors do not change who the UBO is; they only change whose name appears on the shareholder register.
The concept comes from the Financial Action Task Force (FATF) recommendations on transparency of legal persons and arrangements, adopted by most countries to prevent companies from being used to hide money laundering, tax evasion, corruption or sanctions evasion. Every bank, regulated service provider and, increasingly, government registry asks the same question: who is really behind this company?
How the UBO is identified
Authorities and banks generally apply three tests in order:
- Ownership: any individual who holds, directly or indirectly, a set percentage of the shares or capital, usually 25%.
- Control: any individual who controls the entity by other means, such as voting rights, a shareholders' agreement, the right to appoint or remove most directors, or decisive influence.
- Fallback: if no one meets either test, the senior managing official, usually the chief executive or the directors, is recorded as the beneficial owner.
Indirect ownership is calculated through the chain. A person who owns 50% of a holding company that owns 60% of an operating company indirectly owns 30% of the operating company and is a UBO at a 25% threshold. A person with 20% directly and control of another 10% through a family company may also be one.
| Situation | UBO? | Why |
|---|---|---|
| Owns 30% of the company directly | Yes | Above the ownership threshold |
| Owns 50% of a holding that owns 60% of the company | Yes | Indirect ownership of 30% |
| Owns 10% but can appoint most of the board | Yes | Control by other means |
| Four shareholders with 25% each | Under 'more than 25%': none by ownership; from 2027 in the EU ('25% or more'): all four | The threshold wording matters |
| Nominee shareholder holding 100% for a client | No; the client is | Nominees do not change the beneficial owner |
Trusts and foundations
For trusts the rules are wider. Because a trust has no shareholders, the beneficial owners are generally the settlor, the trustees, the protector, the beneficiaries or class of beneficiaries, and anyone else with effective control. For foundations, the founder, the council members and the beneficiaries are typically recorded. Our guide to international trusts explains these roles.
Registers of beneficial owners
Most jurisdictions now require companies to record their beneficial owners, either in a central government register or in a register kept by the company or its agent and available to authorities on request.
European Union
EU countries keep central registers. In November 2022, the EU Court of Justice ruled in the WM and Sovim cases that unrestricted public access to these registers breached the rights to privacy and data protection, and several countries closed them to the general public. From 10 July 2027 the Anti-Money Laundering Regulation (EU) 2024/1624 harmonises the definition at '25% or more' of ownership or control, lets the Commission lower the threshold to 15% for higher-risk entities and guarantees access to people with a legitimate interest, such as journalists and civil society organisations.
United States
The Corporate Transparency Act required most U.S. companies to report their beneficial owners to FinCEN from 2024. In March 2025, FinCEN exempted all entities formed in the United States, and a final rule in August 2026 made the exemption permanent; foreign companies registered to do business in the United States still report. U.S. banks continue to identify the beneficial owners of every company client, and the IRS sees them in EIN applications and forms such as Form 5472; see our guide on forming a U.S. LLC.
Offshore and Asian centres
- Cayman Islands: a non-public register kept through the registered agent; since February 2025 people with a legitimate interest can apply for access in money-laundering cases.
- Hong Kong: each company keeps a significant controllers register, not public, available to authorities.
- Singapore: companies file their registrable controllers with ACRA in a non-public central register.
- Panama: a private central register created in 2020 and kept through the resident agent.
- United Arab Emirates: companies keep a beneficial owner register and file it with their registrar.
- United Kingdom: the register of people with significant control is public.
| Jurisdiction | Register | Who can see it |
|---|---|---|
| United Kingdom | Central (PSC register) | Public |
| European Union | Central registers in each country | Authorities and people with a legitimate interest |
| United States | FinCEN (foreign companies only since 2025) | Authorities |
| Cayman Islands | Through the registered agent | Authorities; legitimate interest since 2025 |
| Hong Kong | Kept by each company | Authorities |
| Singapore | Central (ACRA) | Authorities |
| Panama | Private central register | Authorities |
Why it matters for international structures
The UBO rules change how international structures are planned:
- Banks will not open an account without identifying every UBO and checking their source of wealth; see our guide on how to open an offshore bank account.
- Under the Common Reporting Standard, banks report the 'controlling persons' of passive companies to the tax authorities of the countries where those individuals live.
- Nominee arrangements must disclose the real owner to the agent, the bank and, where required, the register. Using nominees to hide ownership from authorities is illegal in most jurisdictions.
- Registers must be updated after every change in ownership or control, usually within days or weeks, and failures carry fines and, in some countries, criminal liability.
Privacy within the rules
Beneficial ownership transparency does not mean that a family's holdings must be public. Most registers outside the United Kingdom are closed to the general public, and legitimate privacy can still be achieved through the choice of jurisdiction and structure. What has ended is anonymity towards banks and authorities. Structures should be designed on the assumption that the UBO will be known to them, as our comparison of the best asset protection jurisdictions explains.
Practical checklist
- Draw the full ownership chart, from each operating company up to the individuals.
- Calculate direct and indirect percentages and identify any control by other means.
- Identify the roles in any trust or foundation.
- Keep identity documents and source-of-wealth evidence for each UBO ready for banks and agents.
- File and update the registers required in every jurisdiction where the structure has entities.
- Check that the tax reporting of each UBO in their country of residence matches the structure.
Bottom line
The ultimate beneficial owner is the person at the end of the ownership chain, and almost every bank and jurisdiction now needs to know who that is. Registers differ in who can see them, from fully public in the United Kingdom to restricted in the EU and confidential in most offshore centres, and the EU rules will tighten again in 2027. Well-designed international structures are built to be transparent to authorities while protecting the family's privacy from the public.
Our Private Advisory Session maps your structure's beneficial owners, reviews the registers and filings in each jurisdiction and keeps the structure compliant as the rules change.
Sources
Frequently asked questions
What does UBO mean?
Ultimate beneficial owner: the individual who ultimately owns or controls a company, trust or foundation, directly or through other entities.
What percentage makes someone a beneficial owner?
Usually 25% of the shares or voting rights, held directly or indirectly. Control by other means also counts, and from 2027 the EU standard is '25% or more', possibly 15% for higher-risk entities.
Are beneficial ownership registers public?
It depends. The UK register is public; EU registers are open to authorities and people with a legitimate interest; most offshore and Asian registers are open only to authorities.
Do nominee shareholders hide the beneficial owner?
No. The real owner must be disclosed to the agent, the bank and, where required, the register. Using nominees to hide ownership from authorities is illegal in most jurisdictions.
Do U.S. LLCs still report beneficial owners?
Not to FinCEN. Since March 2025, companies formed in the United States are exempt, and the exemption was made permanent in 2026. Banks and the IRS still identify the owners.
