UBO identification: how to find the person behind the company

What UBO identification actually means

UBO identification is the process by which an obliged entity works out which natural person or persons ultimately own or control a customer, then verifies that finding against an official source, even when ownership runs through several layers of companies, trusts or nominees.

That definition hides the real work. Under Directive (EU) 2015/849, which implements the global standards of the Financial Action Task Force, two tests apply, and the order matters.

The two tests: ownership, then control

Test one: ownership

Start with the shares. A natural person qualifies in two ways:

• Directly, by holding 25 percent plus one share, or more than 25 percent, in the entity.
• Indirectly, by holding a stake of the same size through one or more companies they control.

Indirect holdings count as much as direct ones, so the analysis climbs the chain. Where a company is owned by another company, multiply the percentages along each branch to find each person's effective stake in the customer entity. Member states may set the bar lower.

Test two: control

Someone can be a beneficial owner without holding a single qualifying share. Control can come from a shareholders agreement, the right to appoint or remove the majority of the board, veto rights, or any other form of effective influence.

This is the test people miss. It does not show up in a cap table, so nobody stumbles across it. You have to go looking. It is also the reason UBO work sits closer to knowing your counterparty than to filling in a form.

When no owner turns up

If, after exhausting all possible means, neither test produces a natural person, you identify the senior managing officials instead. That is a defined fallback, not a failed process. Write down the steps you took and the reasoning behind them, so a supervisor can follow how you got there.

Can a UBO be a company?

A shareholder can be a company. A beneficial owner cannot. The analysis only stops when it reaches real people, so an intermediate company is a step in the chain, never the destination.

Two situations deserve a closer look:

• Nominee arrangements. A nominee shareholder or director puts a name on the register while the real control sits elsewhere. The nominee does not discharge your obligation to identify the person behind them, and the presence of nominee structures is itself a risk signal.
• Trusts and complex structures. Trusts, foundations and multi-layered international groups separate ownership from control by design, and each has its own logic for who the beneficial owners are. We cover those cases separately in identifying UBOs in trusts and complex structures.

Verifying UBO data against the register

Finding a likely UBO is half the job. The finding has to hold up against an authoritative source. In Belgium that source is the national UBO register, created by the Law of 18 September 2017 and run by the General Treasury Administration of the Federal Public Service Finance.

Here is what changes the way you use it: obliged entities are expected to consult the register and to report differences between what it holds and what their own due diligence establishes. That duty rules out both shortcuts. You cannot simply accept the customer's declaration, and you cannot simply take the register at face value. You compare the two, and a mismatch is something to act on.

When your due diligence and the register disagree, the EU rules give you three moves:

• Report it promptly. Flag the discrepancy without undue delay.
• Say who you think the owners are. Set out who you consider the beneficial owners to be, along with any nominee shareholders or directors.
• Or ask the customer to correct it. As a narrow alternative, you can invite the customer to fix the information within 14 days. This option is off the table in higher-risk cases.

National registers are also being connected through the beneficial ownership registers interconnection system (BORIS) on the e-Justice Portal, so cross-border verification is folding into the same end-to-end compliance workflow.

And verification is not a one-off. Shares change hands, people are added and removed, and a file that was accurate at onboarding quietly goes stale. Continuous client lifecycle management, rather than a manual re-check every few years, is what keeps the record trustworthy between reviews.

What AMLR 2027 changes about beneficial ownership

The EU anti-money-laundering package brings a directly applicable regulation, the AMLR (Regulation (EU) 2024/1624), which applies from 10 July 2027, alongside the new authority, AMLA. Unlike the directives it builds on, the AMLR lands identically in every member state without national transposition. Beneficial ownership under the AMLR moves from 27 national variations to one European approach. We go deeper on preparing for it in AMLR is coming, are you really ready?

Three changes deserve your attention first:

• One threshold, slightly lower. The AMLR sets a single EU threshold of 25 percent or more, which catches an individual holding exactly 25 percent. Today's "more than 25 percent" test lets that person through.
• An even lower bar for risky sectors. For higher-risk categories of entity, the Commission may drop the threshold to 15 percent.
• A hard deadline for discrepancies. Reporting a register mismatch becomes a fixed 14-calendar-day obligation, replacing today's vaguer "without undue delay" standard.
• More prescriptive identification. Across the board, identifying and verifying beneficial owners becomes more demanding.

The teams that will find July 2027 easiest are the ones whose UBO identification is already structured, auditable and driven by register data rather than manual collection. If your process is fragmented today, now is the moment to fix it, not to bolt more manual steps onto it.

Where beneficial ownership analysis usually goes wrong

Most UBO failures are not exotic. They cluster around five recurring mistakes, and knowing them is half the defence.

• Stopping at the register. The register is what you verify against, not the answer. Treating an extract as the end of the analysis misses the entire point of the discrepancy-reporting duty, which assumes you will find differences and challenge them.
• Running only the ownership test. The 25 percent calculation is the easy, mechanical part. Real influence hides in shareholders agreements, board appointment rights and veto powers, and that is exactly the part most often skipped.
• Treating identification as a one-off. A UBO file is accurate on the day you finish it and starts decaying the morning after. Without monitoring, the record drifts out of date in silence.
• Accepting nominees at face value. A nominee name fills a field. It does not discharge an obligation. Nominee structures are a prompt to look harder, not permission to stop.
• Under-documenting the fallback. Recording senior managing officials is legitimate when no owner can be found, but only if the reasoning is written down. To a supervisor, an undocumented fallback looks like a gap.

Conclusion

Beneficial ownership is moving from a static, declaration-based exercise to a continuously verified one, and the AMLR accelerates that shift. The teams that adapt most easily will be the ones already treating UBO identification as a structured, evidence-backed process rather than a form to complete at onboarding, with the controls built in by design rather than bolted on afterwards.

Get the ownership and control analysis, the register verification and the ongoing monitoring right today, and you have already done the work a harmonised European regime will expect tomorrow.

Frequently asked questions about UBO identification

How does UBO identification work in practice?

You apply two tests in order. First an ownership test, covering more than 25 percent of the shares or voting rights, held directly or indirectly. Then a control test, covering effective control by other means such as a shareholders agreement or board appointment rights. If neither identifies a natural person, you record the senior managing officials, and the result is then verified against an official register.

What is the difference between UBO identification and UBO verification?

UBO identification is working out who the beneficial owner is from ownership and control. UBO verification is confirming that finding against an authoritative source, such as the Belgian UBO register, and acting on any discrepancy. Both are required, and identification on its own is only half the task.

Can an ultimate beneficial owner be a company?

No. A UBO is always a natural person. A company can appear in the ownership chain, but the analysis continues upward until it reaches the real people who own or control the entity.

What does the AMLR change about UBO identification?

From 10 July 2027 the AMLR applies one EU-wide threshold of 25 percent or more, replacing the current "more than 25 percent" test and catching holders of exactly 25 percent. For higher-risk categories of entity, the Commission may set the threshold as low as 15 percent. It also introduces a fixed 14-calendar-day deadline for reporting register discrepancies, tightening today's "without undue delay" standard. Because the regulation applies without national transposition, the same rules bind obliged entities in every member state.

How often should UBO information be verified?

Continuously, not once. Ownership changes and register entries are updated, so a file that was accurate at onboarding drifts out of date. Ongoing monitoring of UBO and ownership changes keeps the record reliable between formal reviews.

Harmoney orchestrates the whole counterparty lifecycle, from onboarding to continuous monitoring, in one auditable flow. Human-in-the-loop, audit-ready, always in control. Want to see how that works for your AML and risk assessment processes? Talk to us or explore the Harmoney platform, or stay in touch via our newsletter ⬇️.