Businesses in Saudi Arabia face increasing pressure to prove who truly owns and controls them. Recent regulatory changes have exposed actual gaps in transparency, while making it harder for companies to operate smoothly and for investors to trust the market.
Even many organizations struggle with complex ownership structures, indirect shareholdings, and uncertainty over compliance deadlines. These can also result in costly penalties, reputational damage, and even lost business opportunities.
For you, we have broken down the UBO Rules in Saudi Arabia, offering practical solutions to help you with new requirements, avoid fines, and build trust with partners.
The UBO Rules in Saudi Arabia refer to the Ultimate Beneficial Ownership regulations introduced by the Ministry of Commerce, effective from April 3, 2025.
These rules require almost all companies in the Kingdom, except for publicly listed entities and certain government-owned organizations, to disclose and maintain accurate records of their ultimate beneficial owners (UBOs).
The main goal is to enhance corporate transparency, combat financial crimes such as money laundering and tax evasion, and align with international standards set by the Financial Action Task Force (FATF).
UBO Rules in Saudi Arabia define an ultimate beneficial owner as any natural person who meets at least one of the following criteria:
If no individual can be identified using these criteria, the company’s manager, board members, or president will be considered the UBO.
Also Read: The Importance of Organization Structure in Saudi Arabia
To comply with the UBO Rules in Saudi Arabia, companies must fulfill several obligations:
Exemptions: Publicly listed companies, wholly government-owned entities, and companies in insolvency proceedings are exempt but must provide evidence of their exemption.
Failure to comply with the UBO Rules in Saudi Arabia can result in severe consequences, including:
The implementation of UBO Rules in Saudi Arabia is a critical step toward preventing financial crime and increasing transparency. Also, authorities can better detect and deter money laundering, terrorist financing, and tax evasion.
These annual leave rules bring Saudi Arabia in line with FATF recommendations and similar regulations in other jurisdictions. It is also playing an important role in boosting investor confidence. These types of transparent ownership structures make the Kingdom more attractive to foreign investors and support the goals of Saudi Vision 2030.
To successfully comply with the UBO Rules in Saudi Arabia, businesses should:
| Requirement | Details |
|---|---|
| UBO Definition | 25%+ ownership, voting rights, board control, or influence |
| Disclosure Timing | At incorporation, annually, and within 15 days of changes |
| UBO Register | Mandatory, must be updated and available for inspection |
| Exemptions | Publicly listed, government-owned, insolvency proceedings |
| Penalties for Non-Compliance | Up to SAR 500,000 fine |
| Authority | Ministry of Commerce |
Many companies struggle with:
The UBO Rules in Saudi Arabia represent a major shift in corporate transparency and compliance.
By understanding the requirements, maintaining accurate records, and responding promptly to changes, businesses can avoid penalties and build a reputation for integrity.
Proactive compliance not only protects companies from regulatory risk but also strengthens their standing with partners, investors, and authorities.
Delta International Recruitment Agency is an ISO Certified recruitment company with 80+ International clients serving all over the globe.
In overseas recruiting market, we are one the most re-owned agencies for Saudi Arabia.
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