Ultimate Beneficial Owner (UBO)
An ultimate beneficial owner is the natural person who ultimately owns or controls an entity, or the person on whose behalf a transaction is conducted, even when they are not the direct legal owner.
Beneficial Owner
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UBO
Examples
Before a legal entity can open a new account in a bank, they must go through the KYB process. This process includes validating key information about the legal entity itself as well as the ownership structure of the business and performing KYC on all the beneficial owners.
After looking into the ownership structure of the business, the bank identified the UBO of the client company as a prominent foreign PEP not previously disclosed. They therefore assign the legal entity a high risk profile and keep a close eye on their transactions.
FAQ
How is UBO defined in different jurisdictions?
Definitions vary, but UBO is generally a natural person who ultimately owns or controls 25%+ of a company.
What is the UBO threshold for reporting in most jurisdictions?
The most common threshold is 25% ownership/control, but some jurisdictions go as low as 10% or look at other control factors.
How can banks verify UBO information provided by clients?
Banks can cross-check UBO data against company registries, conduct public records searches, and request documentation like ownership charts.
