The UBO Rules aim to identify the natural persons who ultimately own, control, or materially benefit from corporate entities established in Saudi Arabia. The UBO Rules have, with some exceptions (such as State owned companies or Listed Companies), universal application for entities / branches established in Saudi Arabia.
What is an UBO?
A UBO is a natural person who beneficially or legally exercises ultimate and actual control over a company. This may occur through direct or indirect ownership of at least 25% of the company’s capital, control of 25% or more of the voting rights, or the power to appoint or remove directors or key officers. Control may also be inferred from a person’s ability to influence the company's decisions or from their managerial authority.
Under the UBO Rules, companies etc…must assess the entire corporate structure to reach natural persons who fall (legally or beneficially) under the definition of "control". In many cases, this will be straightforward, but it will become a lot more difficult once you have complex group structures or the involvement of trusts.
What do we need to do? and when?
All companies subject to the UBO Rules are required to identify, collect, and disclose comprehensive information about their UBOs. This includes names in Arabic and English, national or resident ID numbers (or passport details for non-residents), date and place of birth, nationality, address, mobile number and email (if available), and the specific criteria under which the individual qualifies as a beneficial owner.
The timing of disclosure varies based on the date of incorporation / establishment in Saudi Arabia:
- For companies / branches incorporated / established on or after 3 April 2025, beneficial ownership data must be submitted with the incorporation application.
- For companies / branches existing as of 3 April 2025, disclosure must occur at the time of their next commercial register confirmation, in line with the Commercial Register Law (our article on this law can be founds here https://dwfgroup.com/en/news-and-insights/insights/2025/4/saudi-commercial-register-law-and-law-of-trade-names).
All disclosures, updates, and confirmations must be submitted via the Ministry’s electronic platform, with updates required within 15 days of any change in UBO. An annual confirmation of the accuracy of previously submitted information is also required.
Practical Challenges and Enforcement
Companies are encouraged to establish internal compliance procedures to comply with the UBO Rules.
Despite the aforementioned timelines, we have already seen that government authorities / institutions (such as the Saudi Business Center) have requested UBO information as part of using its services (such as amending articles of association).
There are no fees associated with disclosure, failure to comply - whether by omitting the initial disclosure, failing to update changes, or neglecting the annual confirmation—may result in penalties.
Conclusion
The UBO Rules is yet another example as to how the regulatory / legal landscape of Saudi Arabia is evolving to align with international best practices and to foster transparency and reliability for those wishing to do business in the Kingdom. Those affected by the UBO Rules, need to promptly take appropriate actions to ensure compliance.
Please contact Leopold Zentner or Bander Almuatani for further information.
Authors: Leopold Zentner and Bander Almuatani.
