Saudi Arabia is making a bold move to enhance corporate transparency with the introduction of new Ultimate Beneficial Ownership (UBO) regulations, effective from April 3, 2025. These rules mark a crucial shift in the Kingdom’s approach to anti-money laundering (AML), financial crime prevention, and corporate governance—bringing it in line with global standards.

🔍 What Are the New UBO Rules?

Under the new regulation, most companies must disclose their UBOs to the Ministry of Commerce. A UBO (Ultimate Beneficial Owner) is defined as any natural person who:

✅ Directly or indirectly owns 25% or more of a company’s share capital

✅ Controls 25% or more of the voting rights

✅ Has the authority to appoint or remove a majority of board members

✅ Exercises significant influence over the company’s decisions

✅ Or represents a legal entity that fits the above

👉 If no one qualifies, the company’s manager or board chairman will be designated as the UBO.

📌 Who Needs to Comply?

The UBO Rules apply to all companies registered in Saudi Arabia, except:

Publicly listed joint-stock companies Entities wholly owned by the government Companies under liquidation (bankruptcy law) Entities exempted by ministerial decision

📋 Key Compliance Requirements

Here’s what businesses must do to remain compliant:

🔹 At Incorporation: Disclose UBO details during registration

🔹 Annual Confirmation: File a yearly confirmation of UBO data 30 days before your anniversary

🔹 UBO Register: Maintain a register within Saudi Arabia with full details—name, ID/passport number, address, contact info, and qualifying criteria

🔹 Update Timeline: Any changes must be reported within 15 days

🔹 Regulatory Oversight: The Ministry may request UBO documents at any time

⚠️ Penalties for Non-Compliance

Non-compliance can result in fines up to SAR 500,000 (~USD 133,000), and enforcement measures may disrupt business operations. Accurate, timely reporting is not optional—it’s essential.

📜 Why It Matters: From Local Change to Global Alignment

Previously, ownership records in Saudi Arabia were fragmented, with limited insight into actual beneficial owners—especially in complex structures. The new UBO rules address this gap, requiring clear visibility even when ownership involves trusts, offshore entities, or nominees.

This reform aligns Saudi Arabia with the Financial Action Task Force (FATF) recommendations and international transparency practices. It’s a pivotal step towards enhancing investor confidence and ensuring a safer, more accountable business environment.

🧩 Need Help Navigating the New UBO Regulations? Corprights Management Consultants offers expert legal and corporate advisory services to help you:

✅ Identify and verify your UBOs

✅ Structure your corporate governance framework

✅ Ensure ongoing compliance and avoid penalties

👉 Get in touch with our experts today: +966558946033