UBO

A UBO is an "ultimate beneficial owner" or beneficial owner. As a rule, natural persons are considered UBOs if they have a direct or indirect interest of more than 25% in an entity through shares or voting rights, or exercise direct control in some other way. If this is not the case, senior management or executives are designated as UBOs. This is then referred to as the Pseudo-UBO.

Nevertheless, it may be unwise to stick to a definition when it comes to beneficial ownership definition. FinCen Final rule financial institutions do not need to verify that individuals on a UBO list are actually the true beneficial owners of the entity in question. Thus, financial institutions may not be compliant with other laws that have been implemented such as the EU Fourth AML Directive. This will require additional controls.

In Belgium there is a UBO register, but in many countries registering a UBO is not mandatory. So determining a UBO can be quite a challenge.

You can also request the UBO information by asking the company yourself. You then ask in writing for a list of companies and/or names that have 25% or more shareholding in the company. This requires relatively little research work. Remember that a company cannot be the UBO; a UBO is always a person. You will therefore have to find out the UBO of a company on a list. By requesting this from the companies, you fully trust the company and that the information provided is actually correct. In addition, no monitoring takes place.

Another option is to do your own research. You consult verified (international) sources. This keeps you in charge, but this can be a time-consuming task, especially internationally. You will have to deal with different ways of reporting. In some countries it is not mandatory to register a UBO so you will not be able to find out a UBO everywhere. In addition, in different countries you will also have to deal with different languages and therefore also any language barriers.

With Belgian companies, you have the UBO register of the CBE. This lists verified UBOs of Belgian companies. In Belgium, in many cases it is mandatory to provide a UBO database to the CBE. However, a UBO is not always mandatory. This depends on the legal form of the company.

An external party can provide good support for this. The advantage of this is that you do not have to spend time on research yourself. However, you remain responsible for the results of the research. It is therefore important that you find a reputable partner for this cooperation.

Solutions for tracing a UBO

Within Belgium, the registration of UBOs is mandatory, but this depends on the legal form of the company. Internationally, there are different rules for registering UBOs. This differs per country.

According to the World Bank, information about UBOs is rarely included in public records. Simply because it is not mandatory. Governments and regulators are making efforts to ensure transparency of these UBO disclosures, but information about UBOs are not included in laws and regulations such as the AML and CTF laws.

In the EU, there are mutual agreements and it is mandatory to keep a UBO register for companies. In Belgium, not all companies are required to register a UBO in the CBE. Below is a list of legal forms and whether or not they are required to register a UBO:

These legal forms are required to register their UBO(s):

- Companies incorporated in Belgium

- non-profit (international) associations (NPOs)

- Fiduciaries, trusts or equivalent arrangements

Civil partnerships are in a grey area. This is because the Law of September 18, 2017 and the Royal Decree of July 30, 2018 do not define what exactly the concept of a partnership means and whether a legal entity within a partnership is mandatory.

Het UBO-register is een Belgische database met alle uiteindelijk belanghebbende van bedrijven met een die verplicht zijn om een UBO te registeren en een KBO-nummer heeft(zie is een UBO verplicht?). Dit komt voort uit EU-regelgeving dat elk Europees land een UBO register moet bijhouden. Niet alle informatie is openbaar te vinden.

Bij vennootschappen is het volgende van toepassing. Een burger kan, mits hij beschikt over de bedrijfsnaam of het KBO-nummer van het bedrijf, alleen de achternaam, geboortemaand en -jaar, de woonstaat, nationaliteit en aard en omvang van belang van de UBO’s vinden. Het opvragen van deze informatie brengt ook administratieve kosten met zich mee.

Bij (internationale) vzw’s, stichtingen, trusts of soortgelijke entiteiten kan een burger niet bij informatie. Andere bedrijven die toegang willen zullen een apart verzoek bij het KBO moeten indienen en moeten aantonen dat er een legitieme reden is waarom informatie wordt opgevraagd.

Overheidsinstanties en andere instanties die zich actief bezighouden met anti-witwasregelgeving kunnen bovenstaande altijd raadplegen.

No, a UBO registry is not mandatory worldwide. So not all countries have a UBO register. Within the EU this obligation does exist and all European countries have a UBO register. You can often request this from the local chamber of commerce. There are a number of hooks and eyes to this. Establishing a UBO can be quite difficult internationally. There is no international list where all UBO's are mentioned.

It depends. Any natural person who owns 25% or more in stock is a UBO. But contrary to what you think, more than four people can be a UBO within a company. UBO structures can get very complicated.

So you can see in this example that it is not immediately clear who the UBOs are. There are both direct and indirect people with significant interests in the organizations. UBOs can also hide behind layers of limited liability companies. These complex structures make it difficult to identify the UBOs to be able to identify. 

UBOs can stay the same for years, or change rapidly. You won't quickly realize this unless you are monitoring UBOs of organizations through a tool. You almost never get a notification of changes in a UBO registry.  It is important to know when a UBO changes. After all, the new UBO may be on a sanctions list, or may be a PEP (Politically Exposed Person). So there are more risks that can occur with the change of UBOs. A tool that monitors this for you can be the solution .