Ultimate Beneficial Owner (UBO)
The natural person who ultimately owns or controls a legal entity - directly, indirectly or through chains of ownership - and on whose behalf transactions are conducted.
Definition
The Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns or controls a legal entity, either by holding a sufficient ownership interest (the EU benchmark is 25% +1 share) or by exercising control through other means - voting rights, contractual arrangements, or the ability to appoint a majority of directors.
If no natural person can be identified after exhausting all reasonable means, the senior managing official may be designated as the "UBO by default" - a fallback regulators expect to be rare and documented.
How UBO is computed
- Direct ownership: shareholding above the threshold in the immediate entity.
- Indirect ownership: ownership multiplied across the chain - a person holding 60% of A which holds 50% of B holds an indirect 30% of B.
- Control: shareholder agreements, golden shares, dual-class structures, trustee or protector roles.
Regulatory anchor
FATF Recommendation 24, AMLD4/5 in the EU, the Corporate Transparency Act in the United States. The CJEU's 22 November 2022 ruling restricted public access to UBO registers, but obligated entities still have full access for AML purposes.