Beneficial Owners

In this part of our blog series on the EU AMLR, we introduce a new and central area of the framework: transparency in relation to beneficial ownership. Having addressed risk assessments, customer due diligence measures and specific rules for, among other things, high-risk customers and reliance on third parties in earlier parts, the focus now shifts to one of the core issues in the AMLR: the identification of the natural persons who ultimately own or control legal entities. The rules set out in Chapter IV form a key part of the EU’s strategy to prevent corporate structures, chains of ownership and legal arrangements from being used to conceal the true origin of assets or the person ultimately exercising control over them. For obliged entities, transparency regarding beneficial ownership is a prerequisite for effective risk assessment, supervision and law enforcement.

For businesses operating within complex ownership structures or international groups, legal advice on AML matters can be critical to ensuring that beneficial owners are identified in accordance with the requirements of the Regulation and with due regard to both Union law and national considerations.

Chapter IV – Transparency in Relation to Beneficial Ownership

Chapter IV of the AMLR establishes a harmonised framework for identifying beneficial owners. Articles 51 and 52 provide the starting point for this framework by defining who is to be regarded as a beneficial owner of legal entities and how ownership interest is to be calculated. The rules are intended to address opaque and complex corporate and ownership structures. By clearly establishing criteria for ownership and control, the framework reduces the scope for using complex ownership chains, holding structures or anonymous owners to conceal the individual who ultimately exercises influence.

Article 51 – Identification of Beneficial Owners of Legal Entities

Article 51 sets out the basic definition of a beneficial owner in relation to legal entities. Under the provision, the beneficial owners are the natural persons who meet either of the following two criteria:

• Natural persons who hold a direct or indirect ownership interest in a company, or
• Natural persons who directly or indirectly control the company or another legal entity through ownership interest or by other means.

Where a person exercises control by other means, this must be established independently of, and in parallel with, the existence of an ownership interest or control through ownership interest. Control by other means does not necessarily require the existence of a significant ownership interest, or indeed any ownership interest at all. The requirement that control by other means be established independently of, and in parallel with, the existence of an ownership interest reflects an important starting point: the identification of beneficial ownership must not be based solely on a mathematical calculation of shareholdings. The framework therefore expressly focuses on actual control.

Article 52 – Beneficial Ownership Through Ownership Interest

Article 52 clarifies how ownership interest under Article 51 is to be understood and calculated. Under Article 52(1), ownership interest in a company means direct or indirect ownership of at least 25 per cent of the shares or voting rights, or another ownership interest in the company. The concept also includes the right to a share of profits, other internal resources or the right to distributions on liquidation.

A central aspect of Article 52 is the calculation of indirect ownership. The provision states that indirect ownership is to be calculated by multiplying the shares, voting rights or other ownership interests held by the intermediate entities in the chain of entities in which the beneficial owner holds shares or voting rights. The results from those different chains are then added together. Article 52(1) also provides that all shareholdings at each ownership level must be taken into account when assessing whether there is an ownership interest in the company.

Under Article 52(2), Member States must inform the Commission if they identify categories of companies exposed to a higher risk of money laundering or terrorist financing, pursuant to Article 8(4)(c) of Directive 2024/1640 on national risk assessment, including on the basis of the sectors in which those companies operate.

In such cases, by 10 July 2029 at the latest, the Commission must assess whether the risks associated with those legal entities are relevant to the internal market. If the Commission considers that a lower threshold is appropriate and should be introduced as a risk-mitigating measure, it may adopt delegated acts amending the Regulation. This is done by identifying the categories of companies associated with higher risks of money laundering and terrorist financing, the categories for which a lower threshold should apply, and the corresponding thresholds. The lower threshold must then be set at no more than 15 per cent of the ownership interest in the company. An exception applies where the Commission concludes that a higher threshold would be more proportionate, but in all cases it must remain below 25 per cent.

The Commission must also review those delegated acts on a regular basis to ensure that the companies associated with higher risk are properly identified and that the thresholds remain proportionate to those risks.

Article 52(4) addresses the position of legal entities other than companies where, due to the entity’s form and structure, it is not appropriate or possible to calculate ownership. In such cases, the beneficial owners are to be the natural persons who directly or indirectly control the entity by other means under Articles 53(3) and 53(4), unless Article 57 applies. This provision ensures that foundations, associations and other legal entities are also covered by the requirement to identify a beneficial owner.

Beneficial Ownership as the Basis for an Effective AML System

Articles 51 and 52 make clear that the framework requires obliged entities to understand and be able to penetrate complex and opaque ownership structures. The identification of beneficial owners is an ongoing process that must be updated when ownership or control arrangements change. Taken together, Articles 51 and 52 establish a harmonised and risk-based model for identifying beneficial owners across the Union, and by combining threshold tests with control analysis, they create a framework designed to look through even complex and cross-border structures. This is a central component of the EU’s ambition to strengthen transparency and prevent legal entities from being used as tools for money laundering and terrorist financing.

Morling Consulting provides businesses across Europe with qualified legal advice on AML matters. We support organisations in analysing complex ownership and control structures and ensure that beneficial owners are identified in accordance with both the AMLR and complementary national regulation. By combining regulatory expertise with practical experience of supervisory matters, we help strengthen internal procedures, governance and risk management in line with the EU’s new requirements.