Ul mate Beneficial Ownership (UBO)
Threshold – Major Countries
Sr.
No.
Country
UBO
Threshold
Regula ons Related to UBO
1
India
10%
Under the Preven on of Money Laundering Act (PMLA) and the
Companies (Significant Beneficial Owners) Rules, 2018,
individuals with at least 10% ownership or control are
considered UBOs.
2
USA
25%
The Corporate Transparency Act requires individuals with
ownership of 25% or more in companies to be reported, to
FinCEN's non-public register.
3
EU
25%
The 4th and 5th An -Money Laundering Direc ves set the
general threshold at 25%, lowering to 15% for higher-risk sectors
under the 6th AML Direc ve.
4
UAE
25%
AML regula ons mandate that anyone owning or controlling
25% or more of a company's shares or vo ng rights is a UBO,
with compliance required for AML/CFT.
5
Singapore
25%
ACRA's register considers someone with 25% or more ownership
as a UBO, accessible to law enforcement and not public.
6
Hong Kong
25%
Companies must keep a list of significant controllers with 25% or
more ownership or control, available to authori es upon
demand.
7
Australia
25%
AUSTRACT iden fied an individual as UOB is he / she owns 25%
or more of, or otherwise controls the business of, an en ty (such
as a trust, an associa on or a company).
8
UK
25%
Under the Companies Act 2006, as amended by the PSC (People
with Significant Control) regime, individuals with 25% or more
shares or vo ng rights are UBOs.
9
Netherlands
25%
The Dutch Act on UBO registra on requires repor ng for
individuals with 25% or more ownership, with the register
accessible to competent authori es.
10
France
25%
French AML laws define UBO as those with 25% or more shares
or vo ng rights, with the register publicly accessible, though this
is under review post-CJEU rulings.
11
Germany
25%
The Transparency Register Act (TraFinG) requires companies to
report UBOs with 25% or more ownership to a transparency
register.
12
Turkey
25%
Corporate taxpayers must report UBOs owning 25% or more to
the Revenue Administra on for AML compliance.
13
Brazil
25%
Brazilian AML laws require financial ins tu ons to iden fy UBOs
with 25% or more ownership for due diligence purposes.
14
Canada
25%
Under Canada's PCMLTFA (Proceeds of Crime (Money
Laundering) and Terrorist Financing Act), en es iden fy UBOs
with 25% or more ownership in certain contexts like real estate.
15
South Africa
5%
The Financial Intelligence Centre Act (FICA) mandates repor ng
of UBOs with 5% or more beneficial interest in accountable
ins tu ons for AML purposes.
16
Russia
25%
Under Russian AML laws, those with 25% or more ownership,
vo ng rights, or control are considered UBOs, and must be
disclosed to the Federal Financial Monitoring Service.
17
China
25%
China has officially implemented the beneficial owner
informa on (BOI) filing requirements for all business en es in
the country. The Measures were jointly issued by the People’s
Bank of China (PBOC) and the State Administra on for Market
Regula on (SAMR) in April 2024.
18
Japan
25%
The Act on Preven on of Transfer of Criminal Proceeds requires
disclosure of UBOs with 25% or more ownership or control in
financial ins tu ons and certain businesses.
19
Switzerland
25%
Swiss AML laws require iden fica on of UBOs with 25% or more
beneficial ownership for compliance with interna onal
standards, though exact thresholds can vary by sector.
21
Saudi Arabia 25%
The Saudi Arabian Monetary Authority (SAMA) requires banks
and financial ins tu ons to iden fy UBOs holding 25% or more
shares or control as part of AML compliance.
22
Argen na
10%
Regula ons under the Argen ne Central Bank and the Financial
Informa on Unit (UIF) require iden fica on of UBOs with 25%
or more ownership for AML purposes.
23
New
Zealand
25%
The An -Money Laundering and Countering Financing of
Terrorism Act requires disclosure of individuals with 25% or
more ownership or control in companies.
24
Nigeria
5%
Under the Nigerian Companies and Allied Ma ers Act (CAMA)
2020, beneficial owners are those with at least 5% interest or
significant influence over the company.
25
Indonesia
25%
The Financial Services Authority (OJK) and AML regula ons
require iden fica on of UBOs with 25% or more ownership in
financial ins tu ons.
25
Malaysia
20%
The Companies Commission of Malaysia (CCM)
Ra onal for se ng UBO threshold @ 25%
The standard Ul mate Beneficial Ownership (UBO) threshold is set at 25% in many jurisdic ons based
on a balance between transparency, prac cality, and risk mi ga on.
As per FATF Guidance on Beneficial Ownership of Legal Persons, a threshold should not exceed a
maximum of 25%. However, it is not explicit threshold for Ul mate Beneficial Ownership (UBO).
The adop on of 25% by many regulators is based on:
1. Risk-Based Approach (FATF's Core Principle)
FATF Recommenda on 10 emphasizes that financial ins tu ons should apply a risk-based
approach (RBA) when iden fying beneficial owners. It does not mandate 25% but suggests
iden fying persons who ul mately own or control the en ty.
Many regulators have translated this into the 25% threshold as a prac cal standard, considering
both financial crime risk and compliance feasibility.
2. Prac cal Iden fica on Without Overburdening Compliance
The 25% threshold allows firms to detect significant control while maintaining manageable
compliance efforts.
If the threshold were higher (e.g., 50%), it would be easier to structure en
If it were too low (e.g., 5-10%), ins tu ons would need to conduct extensive due diligence on
minority stakeholders, increasing compliance costs without propor onate risk reduc on.
es to evade detec on.
3. Precedent from Financial Regula ons & Interna onal Standards
EU AML Direc ves (AMLD 4 & 5): Set the UBO threshold at 25% based on FATF guidance.
Basel Commi ee & Wolfsberg Group: Recognize 25% as a func onal threshold in AML compliance.
US Corporate Transparency Act (CTA): Uses a 25% threshold for repor ng beneficial ownership,
aligning with interna onal norms.
4. Preven ng Ownership Structuring & Layering Tac cs
FATF Recommenda on 24 (2022 revisions) emphasizes preven ng evasion of beneficial ownership
repor ng by spli ng ownership.
A 25% threshold prevents criminals from easily structuring en
remaining prac cal for enforcement.
es to evade detec on while
5. FATF Mutual Evalua ons & Jurisdic onal Consistency
FATF's Mutual Evalua ons assess how countries implement beneficial ownership transparency.
Countries with a higher UBO threshold (e.g., 50%) have received cri cism for enabling anonymity.
The 25% threshold is widely accepted because it strikes a balance between financial crime risks
and compliance feasibility.
FATF Guidance on Beneficial Ownership of Legal Persons:h ps://www.fa gafi.org/content/dam/fa -gafi/guidance/Guidance-Beneficial-Ownership-LegalPersons.pdf.coredownload.pdf
Content Creator: Shailesh Gohel - h ps://www.linkedin.com/in/shailesh-gohel/
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