Beneficial ownership registers explained

What a beneficial owner is

The FATF defines a beneficial owner as the natural person or persons who own or control a customer at the end of the chain, or on whose behalf a transaction is conducted. The term covers people who exercise final effective control over a legal person or arrangement ².

Only a natural person can be a beneficial owner. One company can have more than one ². National laws set their own tests. Kenya counts a person holding at least 10 percent of the issued shares, directly or indirectly ⁹. The UK test for a person with significant control starts at more than 25 percent of shares or voting rights ⁸.

What FATF Recommendation 24 asks for

In March 2022 the FATF agreed tougher global rules on the beneficial ownership of companies. Countries must give competent authorities access to adequate, accurate and up-to-date information on the true owners of companies ³.

The FATF says the information should be held by a public authority or body acting as a beneficial ownership registry, or by an alternative mechanism that gives efficient access to it ¹. Its guidance describes a multi-pronged approach that combines information from companies themselves and from other sources ¹.

• Guidance on Recommendation 24 was agreed in February 2023 and published on 10 March 2023 ³.
• The FATF agreed changes to Recommendation 25 on trusts and other legal arrangements in February 2023, with guidance dated 11 March 2024 ³.

Public versus restricted access

The FATF guidance says Recommendation 24 lets countries consider public access to beneficial ownership information, balanced against privacy and data protection. It suggests a tiered approach in which only general information goes to the public ². Some or all of the data could be public, or open at a minimum to financial institutions and designated non-financial businesses and professions ².

The EU Court of Justice ruling of 22 November 2022

The Grand Chamber ruled in WM and Sovim SA v Luxembourg Business Registers, Joined Cases C-37/20 and C-601/20 ⁴. EU law at the time required that any member of the public could see at least the name, month and year of birth, country of residence, nationality and the nature and extent of the beneficial interest ⁴.

The Court found that general public access constitutes a serious interference with the fundamental rights in Articles 7 and 8 of the EU Charter of Fundamental Rights ⁴. It declared Article 1(15)(c) of Directive (EU) 2018/843 invalid insofar as it required that beneficial ownership information be accessible in all cases to any member of the general public ⁴.

The Cyprus registrar suspended public access from 23 November 2022, citing the judgment ⁶. The European Commission page on the interconnection of national registers states that public access through that system is unavailable and that national registers can be reached directly ¹⁰.

After the ruling: access based on legitimate interest

Directive (EU) 2024/1640 of 31 May 2024 sets the next EU rules ⁵. Recital 40 says legitimate interest should be presumed for certain categories of the public ⁵. Recital 41 says non-governmental organisations, academics and investigative journalists should be able to access information on legal entities and arrangements without demonstrating a link ⁵.

Recital 135 sets 10 July 2026 as the date by which member states should transpose the provisions on access based on legitimate interest ⁵. Check each national register for its current request process.