What Counts as an Ultimate Beneficial Owner Under AMLD-6?

Executive Summary

Europe’s new Anti-Money Laundering Regulation (AMLR) and Sixth Directive (AMLD6) sharpen the definition of an ultimate beneficial owner (UBO). The threshold is now 25% or more, and a parallel control test brings in individuals with decisive influence, such as veto powers or the right to appoint directors. If no one qualifies, firms must record the senior managing official and document the steps taken. Strengthened central registers give obliged entities better tools for cross-checking data and resolving discrepancies. For compliance teams, the change means adapting onboarding and monitoring to capture stricter thresholds, indirect holdings, and control rights, making beneficial ownership across the EU more transparent and harder to conceal.

What is UBO?

A UBO (Ultimate Beneficial Owner) is a real person who ultimately owns or controls a company or legal entity. The UBO is the person who benefits from ownership or control, even if their name does not appear directly in public records or legal documents. Here are the Key points:

Ownership: A UBO is typically someone who holds a large percentage of shares, voting rights, or other ownership interests. In Europe under the new AML rules, that threshold is generally 25% or more (KPMG).

Control: A person may still qualify as a UBO without a large shareholding if they can exert influence in other ways, such as through veto rights, the power to appoint or remove directors, or other mechanisms of dominant influence (KPMG).

Transparency: The objective is to reveal who is truly behind companies or trusts, so that criminals cannot hide through complex structures or shell entities (Sanctions.io).

Why this matters now?

The EU’s AML package ends fragmentation. It comprises AMLR (Regulation (EU) 2024/1624), AMLD6 (Directive (EU) 2024/1640), and the AMLA Regulation (Regulation (EU) 2024/1620). All were published in the Official Journal on 19 June 2024. This single rulebook forces consistent UBO identification and registers checks across the bloc, with direct application from 10 July 2027 for AMLR.

What is a UBO under AMLR/AMLD6?

For higher-risk categories of legal entities, the Commission may adopt a delegated act under AMLR to set a lower beneficial ownership threshold — down to 15% — in place of the standard 25%, when justified by the risk profile of the sector. (AMLR, Regulation (EU) 2024/1624)

If, after applying both the ownership test (25% or more ownership, direct or indirect) and the control-via-other-means test (such as veto rights, appointment/removal of directors, or other forms of dominant influence), no natural person qualifies as a UBO, obliged entities must identify the senior managing official(s) instead. They are not regarded as the beneficial owner per se, but their identity must be verified and recorded. The entity must also keep a full record of what due diligence was performed, what was checked, and why no UBO could be found. (AMLR, Regulation (EU) 2024/1624)

Verification steps for obliged entities under AMLR

Obliged entities must take structured steps to identify and verify ultimate beneficial owners. The AMLR and AMLD6 set out a clearer process:

Identify and verify UBOs using reliable and independent sources such as company registers, shareholder documents, or agreements.

Cross-check client information against national or EU central registers, which now contain stronger and more complete data.

Resolve discrepancies where information from clients and registers does not match, and keep a record of the outcome.

Maintain a detailed audit trail showing which documents were reviewed and how decisions were made.

Fallback to senior managing official only when no UBO can be identified. In this case, record both the official’s details and the difficulties encountered during the search.

This step-by-step approach ensures transparency, creates evidence supervisors can rely on, and reduces the risk of hidden ownership going undetected.

Worked Example: How Ownership and Control Both Create UBOs

Imagine a medium-sized trading company with two key investors. Person C directly owns 20% of the company’s shares. The majority stake, 60%, is held by a parent company called HoldCo3. Within that parent, Person D owns 45%. When you follow the ownership chain, D’s indirect interest in the trading company is 45% of HoldCo3’s 60%, which equals 27%. Under the AMLR rules, this makes D a UBO by ownership, since the threshold is 25% or more.

At the same time, the founders’ agreement gives Person C a special budget veto right. Even though C’s shareholding is below 25%, this contractual power amounts to control, so C also qualifies as a UBO by control.

In practice, both individuals must be recorded as beneficial owners. The company should keep the evidence on file, such as the shareholder registers and the relevant sections of the founders’ agreement. Because at least one UBO has been identified through ownership and another through control, there is no need to fall back on listing the senior managing official.

The Role of KYC and AML Platforms

Modern KYC and AML platforms give compliance teams the tools to handle the stricter UBO rules set out in AMLR and AMLD6. Automated ownership-chain mapping helps trace indirect holdings through multiple layers, while built-in logic applies the 25% or more test and flags potential UBOs by control rights. Direct connections to national and EU beneficial ownership registers make it easier to cross-check declarations, resolve discrepancies, and keep evidence audit-ready. Platforms also generate tamper-proof logs and structured workflows, ensuring that every decision—whether identifying a UBO or recording a senior managing official fallback—is fully documented. By centralizing data, applying consistent rules, and reducing manual errors, these systems turn complex compliance requirements into repeatable, transparent processes that regulators can trust.

FAQs

Does the 25% threshold also apply to voting rights and profit interests?

Yes. Under AMLR, ownership is measured not only by shareholding but also by voting rights and other forms of ownership interest.

Can the threshold ever be lower than 25%?

Yes. For high-risk sectors, the European Commission may set a reduced threshold of 15% by delegated act.

Is senior managing officials considered beneficial owners?

No. They are recorded only as a fallback when no natural person can be identified through ownership or control. AMLR requires firms to document why the fallback was necessary and to maintain a clear audit trail.

Do obliged entities need to check central beneficial ownership registers?

Yes. AMLR and AMLD6 make register verification mandatory where available, and discrepancies between client information and registers must be resolved and documented.

When do the new rules take effect?

AMLR applies directly from 10 July 2027, while AMLD6 will be implemented through national mechanisms within the same timeframe.

How can Veridaq help with UBO compliance under AMLR and AMLD6?

Veridaq’s KYC and AML compliance platform is built to meet the new beneficial ownership transparency rules in Europe. It automatically maps complex ownership chains, applies the 25% UBO threshold (and lower thresholds where required), and integrates directly with EU central beneficial ownership registers. The system generates tamper-evident audit trails and reduces manual errors, giving compliance teams reliable evidence for regulators. By streamlining UBO identification and verification, Veridaq helps financial institutions, law firms, and corporates stay fully aligned with AMLR 2027 and AMLD6 requirements, while cutting costs and improving accuracy.

Sources

Sources:

1. KPMG Malta – The EU AML Transformation: The Single Rulebook, 6AMLD and AMLA
   https://kpmg.com/mt/en/home/insights/2024/07/the-eu-aml-transformation-the-single-rulebook-6amld-and-amla.html
2. Sanctions.io – Ultimate Beneficial Ownership (UBO) in AML
   https://www.sanctions.io/blog/ultimate-beneficial-ownership-ubo-in-aml