The Ultimate Beneficial Ownership Rules were approved pursuant to the Minister of Commerce’s Decision No. (235) dated 13/08/1446 AH and published in the Official Gazette on 18/08/1446 AH. These rules came into force on 05/10/1446 AH (April 3, 2025) in accordance with Article (274) of the Companies Law issued by Royal Decree No. (M/132) dated 01/12/1443 AH.

These rules are part of the Kingdom’s efforts to enhance corporate transparency and align with international best practices in combating money laundering and ensuring corporate accountability.

Key provisions include:

• Article Three:
  Applies the rules to all companies governed by the Companies Law, except joint-stock companies listed on the Saudi financial market.
• Article Four:
  Defines the ultimate beneficial owner (UBO) based on specific criteria, including:
  • Direct or indirect ownership of 25% or more of the company’s share capital or voting rights;
  • The ability to appoint or remove managers or the majority of board members;
  • The exercise of significant influence over the company’s decisions, whether directly or indirectly.
• Article Five:
  Requires disclosure of UBO information:
  • Upon company incorporation or during annual confirmation;
  • Existing companies must submit disclosures based on a defined schedule;
  • Any changes to UBO data must be updated within 15 days.
• Article Six:
  Exempts the following from disclosure:
  • Companies wholly owned by the state or a state legal entity;
  • Companies under liquidation pursuant to the Bankruptcy Law;
  • The Ministry may also grant exemptions at its discretion.

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The implementation of the Ultimate Beneficial Ownership Rules introduces new obligations on private companies to enhance transparency and regulatory oversight. Businesses must ensure accurate and timely disclosure of ownership data and adapt internal compliance systems to meet these legal requirements.

For legal inquiries or professional advice regarding how these rules apply to your company structure or reporting obligations, please contact our regulatory and corporate law team at info@mashoralaw.com. We are ready to assist you with practical and compliant solutions.