In a significant step to enhance corporate transparency and align with international best practices, Saudi Arabia has introduced new Ultimate Beneficial Owner (UBO) Rules.  

The UBO Rules, which came into effect on 3 April 2025, are poised to transform the Kingdom’s anti-financial crime (AFC) landscape by mandating companies to disclose their ultimate beneficial owners (UBOs). Unless exempt, companies must now submit UBO information to the Ministry of Commerce (MoC) for its newly created UBO registry, which will be accessible to regulatory authorities in the country.  

Previously, companies were required to keep ownership records but weren’t obligated to disclose UBOs to a central authority. This means that they didn’t have to reveal true ownership, such as in cases where companies had indirect holdings, nominees, or offshore corporate structures. Under the new UBO Rules, all companies must now register their UBOs, submit details at incorporation, update them annually, and report changes within 15 days. 

What Are the New Rules?  

New companies must disclose UBO information and documentation when applying for incorporation. Existing companies have one year from their registration date in the country’s Commercial Register to file disclosures with the MoC. All companies must take reasonable steps to identify their UBOs, maintain a dedicated register in which all information and documentation is kept, and submit updates to the MoC within 15 days of any changes. An annual confirmation of accuracy is also required. 

New UBO Rules a Major Step for The Kingdom’s AFC Defences 

The introduction of these new UBO Rules is a critical development in Saudi Arabia’s regulatory framework and broader anti-financial crime efforts. By requiring companies to disclose their UBOs, the Kingdom is enhancing its ability to trace the true ownership of entities operating within its borders. This move is vital for combating complex financial crimes such as money laundering, fraud, and tax and sanctions evasion, where opaque ownership structures are often used to obscure the identities of individuals behind illicit activities. This latest effort by the government builds on the country’s previous Anti-Concealment Law (2021), which made it illegal for foreign companies to operate in the Kingdom through arrangements under which a company is wholly owned by Saudi nationals, but where the true ultimate and economic beneficiary of the business is a non-Saudi.  

Requiring UBO reporting is a major component of successful regulation and often strengthens a country’s anti-financial crime defences in two ways. First, it provides critical information to law enforcement and regulators on who is really carrying out business in the country, enabling more effective identification and targeting of bad actors. Second, it compels companies to closely monitor their UBOs and conduct thorough due diligence on these individuals. All in all, increased corporate transparency not only bolsters capacity to detect suspicious activities and transactions but also reinforces broader due diligence efforts and a general awareness of financial crime. 

The concealment of a company's true beneficial owner is often central to enabling financial crime. A notable example of this in Saudi Arabia emerged in 2024 with the arrest of Amr bin Saleh Abdulrahman Al-Madani, head of Saudi Arabia’s Royal Commission for the Al-Ula site, on charges of corruption and money laundering. Investigations by the Oversight and Anti-Corruption Authority revealed that Al-Madani had facilitated lucrative contracts for the National Talents Company—a firm in which he secretly retained ownership despite formally stepping away upon entering public office. Prior to joining government, Al-Madani had secured contracts for the company from the King Abdullah City for Atomic and Renewable Energy. Later, while serving in the Al-Ula Commission, he continued to recommend the company for additional projects totaling 1.3 million Saudi riyals, all the while hiding its UBO.  

Saudi Arabia’s move to introduce UBO disclosure requirements aligns with steps taken by other leading financial centres globally, with there being an increasing emphasis internationally in recent years on the importance of knowing who truly controls and benefits from companies operating within a country. These new rules not only strengthen the Kingdom’s regulatory environment but also send a clear message to businesses, investors, and the international community that the country prioritises a transparent and responsible private sector. This is an important development especially as Saudi Arabia prepares for its next evaluation by the Financial Action Task Force (FATF) in 2026. By introducing UBO disclosure requirements, the Kingdom is aligning its policies with FATF recommendations, particularly those related to UBO transparency, as the FATF has repeatedly stressed the importance of UBO reporting and due diligence. 

What Does this Mean for Businesses? A Need for Comprehensive Due Diligence 

The introduction of the new UBO Rules means companies must take stock of their own internal policies and due diligence measures. The Rules highlight the need for a deep understanding of not only direct but indirect ownership. For companies with complex shareholding structures or multi-layered corporate structures, the rules could have significant implications. It is important for companies to carry out effective due diligence on their own corporate structure and finances. Moreover, companies must establish systems to continuously monitor potential changes in ownership structures, as even subtle shifts in control could trigger new disclosure obligations under the UBO Rules. This is an important time to ensure that their due diligence processes are comprehensive and up-to-date. 

Final Takeaway: A Necessary and Welcomed Step in Combating Financial Crime 

By taking these crucial steps, Saudi Arabia is positioning itself at the forefront of financial regulation and anti-financial crime efforts in the Middle East. The UBO Rules will have long-term implications for not only corporate governance and financial reporting in the country, but also the Kingdom’s ability to effectively combat financial crime. By fostering a culture of transparency and accountability, these rules are a necessary step in anti-financial crime. 

Traditional methods of tracking ownership are no longer sufficient in today’s rapidly evolving corporate structures and increasing complexities. To meet the new UBO requirements, companies must integrate advanced technology and enhanced due diligence intelligence into their processes. Tathabbat’s end-to-end solutions offer a powerful due diligence SaaS platform, underpinned by the most comprehensive and reliable data available in the Middle East. Paired with Tathabbat’s world-class research and training capabilities and expert financial crime investigators, your company can be confident that no hidden UBO risks will go undetected, and no crucial details left uncovered.