Introduction
In Saudi Arabia, the government is working hard to make business more honest and transparent. One important step they’ve taken is introducing UBO rules. UBO stands for Ultimate Beneficial Owner. These rules help the authorities know who truly owns or controls a company—even if that person’s name isn’t on official paperwork.
In this blog post, we’ll explain what UBO means, why it’s important, what the rules are in Saudi Arabia in 2025, and what companies need to do to follow them. We’ll keep things simple and clear, so even if you’re just starting to learn about business, you’ll understand it all.
What Is a UBO?
UBO means Ultimate Beneficial Owner. It’s the real person who:
- Owns the company (even if it’s through other companies or people),
- Controls the company (makes decisions or has power over it),
- Or gets most of the money or benefits from the company’s profits.
Let’s take an example:
Suppose Ahmed owns 60% of a company directly. He is a UBO.
- Now, imagine a company is owned by another company, which is then owned by a person named Fatima. If Fatima controls everything through those companies, she is the UBO.
So, the UBO is not just someone whose name is on a document. It’s the person who really benefits from or controls the company.
Why UBO Rules Matter?
UBO rules are very important for fighting:
- Money laundering (hiding illegal money),
- Terrorism financing,
- Fraud and corruption.
By knowing who is behind a business, Saudi authorities can:
- Make business safer and cleaner,
- Protect investors and customers,
- Build trust in the country’s financial system.
In short, UBO rules are part of Saudi Arabia’s bigger plan to improve its economy, attract foreign investors, and follow global standards like those set by the Financial Action Task Force (FATF).
Who Needs to Follow UBO Rules in Saudi Arabia?
Almost every business operating in Saudi Arabia must follow UBO rules. This includes:
- Companies registered with the Ministry of Commerce (MoC),
- Foreign-owned companies operating in the Kingdom,
- Joint ventures and partnerships,
- Businesses registered in free zones.
Only a few exceptions apply, such as:
- Government-owned companies,
- Publicly listed companies that already meet transparency rules.
So, if you run a business in Saudi Arabia, you likely need to report who your UBO is.
What Are the UBO Rules in Saudi Arabia in 2025?
As of 2025, the UBO rules in Saudi Arabia include several key requirements:
1. UBO Identification
Businesses must:
- Identify all people who directly or indirectly own 25% or more of the company,
- Or identify those who have significant control or influence over the company (even if they don’t own 25%).
2. UBO Declaration Form
Companies must fill out and submit a UBO Declaration Form to the Ministry of Commerce. This form must include:
- Full name of the UBO,
- Nationality and identification number (e.g., Iqama or passport),
- Contact details,
- Reason why this person is considered the UBO (ownership, control, etc.).
3. Timely Updates
If anything changes (for example, the UBO sells their shares or a new UBO appears), the company must:
- Update the information within 30 days.
4. Annual Confirmation
Even if nothing changes, businesses must confirm or update their UBO details once a year.
5. Penalties for Non-Compliance
If a company doesn’t follow the rules, it can face:
- Fines,
- Business suspension,
- Trouble renewing licenses or commercial registrations.
So, it’s very important for companies to take these rules seriously.
How to Identify a UBO: Simple Steps?
To help companies understand who the UBO is, here’s a step-by-step guide:
1. Check Direct Owners
Start by looking at who owns shares in your company. Anyone with 25% or more ownership is a UBO.
2. Look at Indirect Owners
If your company is owned by another company, check who owns that company too. Follow the ownership trail until you find a real person.
3. Consider Control and Influence
Even if someone owns less than 25%, if they control decisions or have special rights, they might still be a UBO.
4. Declare and Record
Once you find your UBO(s), collect their information and submit it to the Ministry of Commerce.
Benefits of UBO Compliance
Following UBO rules may sound like extra work, but it brings several advantages:
- Builds trust with banks, customers, and investors,
- Keeps your business out of legal trouble,
- Helps with smoother audits and licensing,
- Shows your company follows international best practices.
UBO compliance is not just a rule—it’s a way to build a responsible and respected business.
Frequently Asked Questions (FAQs)
Q: What if my company doesn’t have a UBO?
A: Every company has at least one person who controls or benefits from it. If you truly can’t find a UBO, you must report the senior management official instead.
Q: Can there be more than one UBO?
A: Yes, if multiple people meet the ownership or control conditions, they must all be listed as UBOs.
Q: Is this rule new?
A: No, the UBO framework was introduced a few years ago, but in 2025, enforcement and digital reporting systems have become stricter and more advanced.
Q: Where do I submit the UBO form?
A: You can submit it through the Ministry of Commerce’s electronic portal or through your business service provider (like a company formation agent or legal consultant).
Final Thoughts
Saudi Arabia is becoming a global business hub, and rules like the UBO declaration are a big part of this transformation. By making business ownership more transparent, the government ensures a safer, more reliable, and more attractive environment for everyone.
If you own a company or plan to start one in Saudi Arabia, make sure you understand your responsibilities under the UBO rules. It’s not just about following the law—it’s about building a stronger future for your business and your country.
Need Help?
If you’re unsure about how to find or report your UBO, it’s best to talk to a legal advisor or business consultant in Saudi Arabia. They can guide you step by step and help you stay compliant.
How Yaqoot Manpower Services Can Help in Stay Compliant in Saudi Arabia?
At Yaqoot Manpower Services, we not only help businesses find skilled and reliable workers across Saudi Arabia, but we also assist in staying fully compliant with local regulations, including UBO (Ultimate Beneficial Owner) reporting requirements. Our expert team supports companies by identifying their UBOs, preparing accurate documentation, and submitting the required forms to the relevant authorities on time. With over a decade of experience in HR, staffing, and business support, Yaqoot ensures your operations remain smooth, legal, and transparent—so you can focus on growing your business with confidence.