Skip to content

Governance: Beneficial ownership

The following indicator is under consideration for this pilot edition of the Barometer: To what extent do relevant laws, regulations, policies and guidance provide a basis for collecting and publishing structured beneficial ownership data on companies?

Feedback on draft Global Data Barometer Indicators

You are looking at a draft indicator to be included in the expert survey of the Global Data Barometer. Between now and May 10th we are inviting your feedback on this indicator and the elements it contains. You can provide your feedback by (a) completing the feedback form below; or (b) adding in-line annotations.

Feedback form

You can share your feedback on the Governance: Beneficial ownership indicator here, or make use of Hypothes.is annotations

Show/hide supporting questions

Existence

  • Are there laws, policies or regulations requiring collection or publication of this information in any form?

    • No
    • They are being drafted, or are not yet implemented.
      Supporting questions: Please provide brief details
    • They exist and are operational

  • Do relevant laws, policies, regulations or guidance discuss collection and publication of structured and open data?

    • Relevant laws, policies and guidance explicitly create barriers to collecting and publishing structured data
      Supporting questions: Please briefly detail the barriers created (e.g. requirements for paper-based filing only)
    • There is no mention of data in relevant laws, policies or guidance
    • Requirements to collect data are set out in non-binding policy or guidance
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to collect data are set out in binding policy, regulations or law
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to publish data are set out in non-binding policy or guidance
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to publish data are set out in binding policy or law
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance

Elements

Part 1: What do the rules or guidance related to structured data cover?

  • Beneficial ownership data should be collected in a central register or database (No, Partially, Yes)

  • Definitions comprehensively cover ownership (No, Partially, Yes) For yes, definitions should require disclosure interests held indirectly. Answer 'partially' if only direct ownership is covered.

    Supporting questions (conditional)

    If Partially or Yes: If the framework sets a threshold below which a share of ownership does not need to be disclosed, please provide it here (e.g. 25%).

  • Definitions cover control (No, Partially, Yes) For yes, definitions should have a provision to capture 'other significant methods of control' beyond those explicitly listed in order to limit loopholes. Answer partially if the definition only specifies a limited set of forms of control.

    Supporting questions (conditional)

    If Partially or Yes: If the framework sets a threshold below which a share of control does not need to be disclosed, please provide it here (e.g. 25%).

  • Rules or processes exist to protect certain natural persons who are beneficial owners from having their data published (No, Partially, Yes)

Part 2: What other requirements do the rules or guidance set out?

  • The rules/guidance require that data is regularly updated. (No, Partially, Yes)

  • The framework requires a verification process. (No, Partially, Yes)

    Supporting questions (conditional)

    If Partially: Please briefly explain the verification process used, and which parts of collected data the framework requires to be verified and which parts it does not.

    If Yes: Please briefly explain the verification process used.

  • The rules/guidance support publication of open data. (No, Partially, Yes)

  • The rules/guidance empower an agency or official to ensure the accurate and timely collection and publication of required data. (No, Partially, Yes)

Extent

  • How widely do these laws, regulations, policies or guidance apply?
    • They cover a limited number of localities or companies (e.g. only companies operating in a single sector or in a single sub-national jurisdiction/state).
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)
    • They cover, or are representative of those covering, many localities or companies
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)
    • They cover the majority of limited companies in the country
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)

Definitions and Identification

"A beneficial owner is a natural person who has the right to some share or enjoyment of a legal entity’s income or assets (ownership) or the right to direct or influence the entity’s activities (control). Ownership and control can be exerted either directly or indirectly."

A public register of the beneficial owners of companies extends beyond registration of the immediate shareholders or directors of a company, to require identification and disclosure of the natural persons (individual named people) who exercise ultimate ownership or control - even if this ownership or control involves multiple intermediate companies or relationships. For more, please review this primer on Beneficial Ownership concepts.

Beneficial ownership disclosure laws and frameworks are relatively new, and may have only been created in the last few years. Frameworks for beneficial ownership disclosure may exist covering all companies in a jurisdiction, or may only exist for specific sectors, such as extractives, or companies involved in public procurement. Some frameworks do not require a central register, and some do not allow public access to the collected data.

If there is no framework in place, but your research identifies ongoing campaigns, advocacy or legislative processes that could create a framework, please make a note of this in the justification section.

Starting points

  • Sources:

  • Search:

    • European Union countries were required by the 5th Anti-Money Laundering Directive to introduce measures for central beneficial ownership registers. Search for information on transposition of AMLD5 into national legislation.
    • 'Beneficial ownership' and country name: look for news of recent consultations, laws or debates. Often corporate service firms will report on new regulations or frameworks being introduced for a given country.

  • Consult:

    • Company transparency advocates (e.g. Transparency International chapters) ****
    • Company registration agents

What to look for?

Look for evidence that can answer the following questions:

  • Is there a current or planned requirement for companies to disclose their beneficial ownership to authorities, and will some or all of this information be made available to the public?
  • Does a company declaring their beneficial ownership only do this once, or is there a process set out in the framework for regular updates? (e.g. when ownership changes, or through annual reporting)
  • Are any bodies empowered to verify the information submitted?

National and sub-national considerations

Where company registration is a sub-national responsibility, beneficial ownership disclosure may also take place sub-nationally. If you identify a sub-national unit with a stronger frameworks than any national framework that might exist (or not), assess this and choose the appropriate answer to the 'extent' question.

Beneficial ownership data is valuable for a wide range of use-cases, including:

  • Supporting anti-corruption and anti-money laundering investigations;
  • Enabling business intelligence and corporate due diligence;
  • Supporting cross-border and wealth taxation;
  • Governance of extractive industries and other high risk sectors.

Lord (2019) describes how, over the last decade, three issues have come together to support a push for improved corporate data sharing, and, in particular, better collection and sharing of data on beneficial owners:

  • the 2008 financial crisis brought into relief the “dangers of uncertain information and unknown actors in financial markets”
  • a 2011 World Bank’s report on the abuse of anonymous companies; and
  • international taxation and anti-money laundering reforms.

These have all worked to highlight the need for interchangeable data not only on firms, but also on their ownership structures and the natural persons behind them. The concept of Beneficial Ownership has rapidly gained traction within the corporate information landscape, with countries creating requirements for companies to disclose the individuals who have ultimate ownership or control of legal entities, cutting through layers of shell corporations or other complex arrangements (Low and Kiepe 2020; Russell-Prywata 2020).

Case studies from the Financial Accountability Task Force describe how some countries have responded to new requirements for beneficial ownership disclosure through updates to existing corporate registers, whilst others have developed parallel beneficial ownership registers, or disclosure regimes (FATF/OECD 2019).

As the legal and regulatory frameworks for beneficial ownership transparency will virtually all have originated in an era where administrations should be aware of the potential value of structured data, tracking how far these explicitly incorporate awareness of data can offer important insights into how far countries are taking a data-aware approach to new regulatory activities.