Saudi Arabia is lifting the veil on company ownership, exposing who truly controls businesses across the kingdom. The new rules set a clear 25 percent ownership threshold to identify beneficial owners and provide structured alternatives when control is hidden or uncertain. The aim is simple: no more shadows, only transparency and accountability at every level.
Defining the beneficial owner
According to Saudi Gazette, the Minister of Commerce Dr. Majed Al-Qasabi has approved amendments to the rules governing beneficial ownership in companies. Under the new regulations, a natural person must hold at least 25 percent ownership, whether directly or indirectly, to qualify as a beneficial owner. This threshold ensures that key stakeholders are properly identified and cannot remain hidden behind complex ownership structures.
When ownership is unclear
The rules also address situations where no individual meets the 25 percent threshold or when ownership is uncertain. In such cases, authorities will determine the beneficial owner based on effective and ultimate control of the company.If neither direct ownership nor control can identify a beneficial owner, the designation defaults to a senior company official. Depending on the company’s structure, this could be the manager, a board member, or the chairman. This step ensures there is always a responsible party identified.
Obligations of partners and shareholders
The amended rules clarify responsibilities for partners or shareholders acting on behalf of others. Anyone exercising rights over shares or stakes for another person must disclose the beneficial owner’s information.Additionally, any changes in ownership or control must be reported within 15 days, ensuring that authorities have up-to-date information at all times.
Exemptions for listed company subsidiaries
A key amendment provides relief for subsidiaries of companies listed on the Stock Exchange. These entities are exempt from disclosure requirements, as listed companies already follow strict reporting standards under market regulations. This prevents redundant reporting while maintaining transparency across the broader market.
