With effect from 3 April 2025, the Saudi Arabian Ministry of Commerce has implemented a new set of regulations on beneficial owners. It centres on the establishment of a transparency register that will record key information on the ownership structures of companies in future. The aim of this measure is to combat money laundering and terrorist financing more effectively.
The register applies to all companies governed by the Saudi Companies Law. Exemptions apply to publicly listed joint stock companies (on the Tadawul stock exchange), public sector entities, and companies in liquidation.
Definition of Beneficial Owner
The definition is aligned with internationally recognised standards. A beneficial owner is considered to be a natural person who:
- directly or indirectly holds at least 25% of the company’s shares, or
- directly or indirectly controls at least 25% of the voting rights, or
- has the power to appoint or remove managing directors, board majorities, or the chairperson, or
- is able to exercise decisive influence over the company’s operations or decisions, or
- authorises a legal entity that meets any of the above criteria.
Obligations for companies
Newly established companies must provide information on their beneficial owners when registering. Existing companies are also obliged to provide this information. In addition, all companies must notify the Ministry of Commerce within 15 days of any changes that are relevant to the transparency register. In addition, it must be confirmed once a year that the information in the register is correct.
Violations of these reporting obligations can be penalised with fines. However, the exact requirements – such as the depth of the information to be reported – have not yet been specified by the Ministry.
With this measure, Saudi Arabia is implementing the standards of the Financial Action Task Force (FATF). The FATF was established by the G7 in 1989 and develops international standards to combat illegal financial flows.
Source: GTAI (in German)
