Criteria for determining the beneficial owner in commercial establishments

The Ministry of Commerce clarified the precise criteria used to classify an individual as a "beneficial owner" in commercial establishments, emphasizing that this classification is not based solely on direct ownership, but also extends to actual control and managerial position. This clarification comes as part of ongoing efforts to enhance transparency in the investment environment and combat illicit financial practices.

Criteria for determining the true beneficiary

The ministry clarified that determining the beneficial owner involves a logical sequence beginning with ownership . A beneficial owner is defined as anyone who owns 25% or more of the company's capital, whether directly or indirectly. If ownership is not met, the focus shifts to the control , where the individual with the authority to make strategic decisions or the ability to influence general assembly resolutions is considered, even if they do not hold a controlling stake.

the position criterion is used , whereby the person holding a senior management position (such as the CEO or general manager) is registered as the true beneficiary of the entity to ensure that there is a direct person responsible to the regulatory authorities.

Legal and economic context

These measures are being implemented to activate the Anti-Money Laundering Law and its executive regulations, and are in line with the requirements of the Financial Action Task Force (FATF). Through these regulations, the Kingdom aims to improve the business environment and enhance confidence in the national economy. Obligating establishments to disclose the beneficial owner is a fundamental pillar of the National Program to Combat Commercial Concealment, as it contributes to uncovering hidden transactions that harm the economy and market competitiveness.

Importance and expected impact

This audit is of paramount importance on several levels:

• Locally: It contributes to eliminating the shadow economy and commercial concealment, thus opening the way for genuine entrepreneurs and investors to compete in a fair and transparent market.
• Internationally: It enhances the Kingdom’s ranking in global indicators related to financial transparency, combating money laundering and terrorist financing, which attracts foreign investments that seek safe and regulated business environments.

The ministry called on all registered establishments to quickly update their data in the commercial register and to accurately disclose the true beneficiary in order to avoid the regulatory penalties that may be imposed on violators, and to ensure the continuation of their business in accordance with the correct legal frameworks.