UBO (Ultimate Beneficial Owner)
Overview
An Ultimate Beneficial Owner (UBO) is the individual who ultimately owns or controls a legal entity, even if ownership is obscured by layers of companies or nominee directors. Regulators mandate UBO identification under AML and KYB laws to prevent shell companies from hiding illicit funds.Financial institutions verify UBOs by collecting shareholder structures, registry data, and supporting documents. Identifying UBOs helps mitigate money laundering, corruption, and tax evasion risks.UBO checks are particularly important in high-risk jurisdictions or industries. Institutions that fail to identify true ownership face severe penalties and reputational harm. Transparency in UBO data strengthens financial integrity and enables regulators to trace illicit networks.
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FAQ
What is a UBO?
The individual who ultimately owns or controls a company, even through layers of structures.
Why must UBOs be identified?
To prevent criminals from using shell companies for laundering or tax evasion.
How are UBOs verified?
Through registries, shareholder documents, and enhanced due diligence checks.
Who enforces UBO rules?
Regulators under AML directives such as FATF, EU AMLD, and local KYB laws.