Ultimate Beneficial Owner (UBO)

🔹 Definition

An Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns or controls a legal entity, such as a company, trust, or partnership—either directly or indirectly. UBOs are the individuals who reap the economic benefits, exercise control, or influence decisions within the structure, even if they are not formally listed as shareholders or directors.

Identifying UBOs is a core requirement in AML/CFT compliance, as criminals often hide behind complex structures or nominee arrangements to conceal illicit activity.

🔹 Frequently Asked Questions (FAQs)

Q1: How is a UBO determined?

• An individual who owns 25% or more of the shares or voting rights in a company (threshold may vary by jurisdiction)
• A person who has the right to appoint or remove directors
• Someone who exercises control through other means, such as influence over financial or operational decisions
• For trusts: the settlor, trustee, protector, and beneficiaries may all be considered UBOs

Q2: Why is UBO identification important?

• Helps prevent money laundering, terrorist financing, and sanctions evasion
• Ensures transparency in cross-border transactions and ownership structures
• Required for Know Your Customer (KYC) and Customer Due Diligence (CDD) by financial institutions and corporate service providers
• Supports international cooperation under FATF Recommendations, EU AML Directives, and OECD standards

Q3: How is UBO information maintained in Singapore?

• All companies and LLPs must maintain a Register of Registrable Controllers (RORC)
• UBO details must be filed with ACRA’s central RORC platform, though the register is not public
• Financial institutions must identify and verify UBOs before onboarding and during periodic reviews

Q4: What challenges exist in UBO identification?

• Use of complex, multi-jurisdictional structures or layered ownership
• Nominee directors or shareholders used to mask control
• Entities registered in offshore secrecy jurisdictions
• Lack of cooperation or documentation from clients or intermediaries
• Trusts and foundations that obscure true beneficiaries

Q5: What happens if a company fails to identify or declare its UBO?

• May face regulatory penalties and enforcement action
• Risk of delayed transactions, bank account rejections, or license refusals
• Increased reputational risk and exposure to financial crime
• Non-compliant CSPs and RFAs may be suspended or deregistered under Singapore law