Lifting the Curtain: Saudi Arabia Demands Full Disclosure of Real Company Owners

Saudi Arabia is making a major shift in how businesses operate, with a new emphasis on ownership transparency.

Under Ministerial Resolution No. 1463, issued on 21 February 2025, and effective from 3 April 2025, companies in the Kingdom are now required to declare who really owns/controls them.

This is not just a box-ticking exercise. It is part of a wider effort to bring clarity and accountability to the Kingdom. By requiring disclosure of the “Ultimate Beneficial Owner” (UBO), the government is ensuring that there is no hidden ownership or complicated structures designed to obscure control.

Who Is Considered an Ultimate Beneficiary Owner?

In simple terms, an Ultimate Beneficiary Owner is the individual who benefits when a company profits. A person qualifies as a UBO if any of the following conditions apply:

• • • Ownership: Holds directly or indirectly 25% or more of the company’s share capital.

• • • Voting Rights: Controls 25% or more of the company’s voting power.
    • Control: Can appoint or remove most of the leadership, like board members or managers.
    • Influence: If no individual meets these criteria, the company may be required to designate a senior manager, such as the CEO, president, or a board member, as the UBO by default.

Why UBO Disclosure Matters

This reform addresses three major priorities:

• • • Makes it harder to hide behind complex ownership setups that can be used to hide illegal activity or avoid taxes.
    • Brings Saudi rules in line with global expectations, which helps with international business, making cross-border trade and investment smoother.
    • Shows investors that Saudi companies operate under clear, transparent rules.

What Companies Need to Do

Staying compliant means following a few key steps at the right time. Companies covered under the new regulation must

• • • Declare their ultimate beneficial owners at the stage of license application
    • Keep UBO records updated and filed with the Saudi Business Center
    • Report any changes in ownership or control within 15 days of the update
    • Confirm and submit UBO details annually, no later than 30 days before or on the anniversary of the company’s registration date

The Ministry of Commerce is expected to release a detailed manual to guide companies on the procedures, formats, and information required for UBO disclosures. At this stage, the following information must be provided for each UBO: 

• • • Full name

• • • National ID or passport number
    • Nationality
    • Residential address
    • Contact information
    • Specific basis for qualifying as a UBO (e.g. shareholding, voting rights)

What Happens If Companies Don’t Comply?

Failure to comply with the UBO disclosure obligations is not just a box left unchecked—it can quickly turn into a costly problem. Companies that miss deadlines or fail to update their records may face operational and financial consequences, such as:

• • • Fines that may reach up to SAR 500,000
    • Restrictions on how companies operate or engage with government platforms
    • Delays or issues with business licence renewal or completion of key transactions

Staying compliant is not just about following the law—it is about avoiding unnecessary roadblocks.

Case Example: Restrictions Due to Outdated UBO Records

A recent case Fragomen handled involved a client attempting to update their General Manager details using the Ministry of Commerce’s online system. What seemed like a simple task hit a roadblock—the platform would not allow the change to go through.

Upon further review, it was found that the company’s UBO records had not been updated. Until those details were corrected, no changes to management could be processed. This example is a clear reminder of how essential it is to keep UBO information current to avoid delays or disruptions to routine business updates.

How Fragomen Can Help

UBO identification and reporting is not always a straightforward process, particularly for businesses with ownership structure that spans multiple stakeholders or jurisdictions.

Fragomen supports clients at every stage of the UBO journey and provides services including

• • • Identify and verify qualifying UBOs
    • Prepare and submit all required filings
    • Advise on any changes in ownership or company leadership
    • Manage annual submissions and ongoing UBO recordkeeping

Businesses can focus on growth while Fragomen makes sure everything behind the scenes is in order. 

Need to Know More? 

For any inquiries or assistance with corporate services, please reach out to Fragomen’s Corporate Services Division at [email protected].

This blog was published on 13 August 2025, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.