UBO: Ultimate Beneficial Owner

The Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns or controls a legal entity. "Ultimate" is key—if Company A owns Company B, and Person X owns Company A, then Person X is the UBO of Company B, even though their name doesn't appear on Company B's documents.

Ownership Thresholds

Most jurisdictions define UBO status at 25% ownership or significant control:

United States (CTA/CDD Rule): 25%

European Union (AMLD): 25%

United Kingdom (PSC register): 25%

FATF Recommendation: 25% (suggested)

Some high-risk sectors require lower thresholds (10% or even 0%).

Two Paths to UBO Status

1. Ownership

Individuals holding 25% or more of equity interests—calculated through all layers of ownership.

2. Control

Individuals exercising significant control regardless of ownership percentage:

• Senior officers (CEO, CFO, COO)
• Authority to appoint/remove directors
• Decision-making power through contracts or other arrangements

Why UBO Identification Matters

Anonymous ownership enables shell companies to:

• Launder money
• Evade sanctions
• Commit fraud
• Evade taxes

The Corporate Transparency Act requires reporting companies to disclose beneficial ownership information (BOI) to FinCEN.

Verification Challenges

• Complex structures: Multiple ownership layers across jurisdictions
• Nominee arrangements: Stated owners may front for undisclosed beneficial owners
• Trusts: Settlor, trustee, and beneficiaries may all be relevant
• Uncooperative customers: Some resist providing ownership information

See UBO Verification for implementation guidance.

---

Related: BOI | Beneficial Ownership | CTA