Beneficial Ownership Registries: Evolution and Fragmentation of Global Corporate Transparency
The Architecture of Corporate Transparency. A beneficial ownership register constitutes a centralized database containing information about natural persons who exercise actual control over, or derive economic benefits from, legal entities—including corporations, trusts, foundations, and other corporate structures. The ultimate beneficial owner (UBO) represents the natural person who exercises control over an entity, irrespective of formal ownership structures or chains of intermediary control.
Contemporary definitions of “beneficial owner” rest upon three criteria: ownership, control, and benefit. The standard identification threshold stands at 25% of shares or voting rights, though jurisdictions employ varying thresholds, including 10% and 20%. These registries serve as critical instruments in combating money laundering, tax evasion, and terrorist financing by creating mechanisms to pierce the veil of corporate anonymity.
[See also our publication on the Common Reporting Standard]
Historical Development
The concept of corporate ownership transparency traces its origins to nineteenth-century England, where the Joint Stock Companies Act of 1844 established shareholder registration requirements. American securities legislation—the Securities Act of 1933 and the Securities Exchange Act of 1934—enacted in response to the 1929 stock market crash, established the first beneficial ownership disclosure requirements for publicly traded companies.
Modern registries emerged from international efforts to combat money laundering. United Nations conventions—the Vienna Convention of 1988 addressing narcotics and the Palermo Convention of 2000 addressing organized crime—imposed upon states the obligation to identify the actual owners of legal entities. The Financial Action Task Force (FATF), established in 1989 during the G7 summit, introduced in Recommendation 24 (formerly 33) of 2003 the requirement that authorities maintain access to beneficial ownership information.
The 2008 financial crisis proved a watershed moment, revealing the scale of anonymous structure exploitation in financial manipulation. The G8, at its 2013 Lough Erne summit, adopted the first global principles of beneficial ownership transparency. The United Kingdom launched the world’s first public register in June 2016, becoming a pioneer in corporate transparency through its People with Significant Control (PSC) register maintained by Companies House. The British system, however, relied—and to a considerable extent continues to rely—upon voluntary declarations, rendering it vulnerable to circumvention through false filings.
The Panama Papers scandal of 2016 dramatically accelerated global registry implementation, demonstrating the magnitude of abuses associated with anonymous offshore structures. The leak of 11.5 million documents from the Panamanian law firm Mossack Fonseca in April 2016 triggered a global wave of reforms. Within eight months of the scandal, at least 150 investigations, audits, or inquiries were announced in 79 countries. At the London Anti-Corruption Summit in May 2016, six countries committed to public beneficial ownership registries, while six others pledged to consider such measures.
Comparative Jurisdictional Approaches
The European Union Framework
The European Union, through the Fifth Anti-Money Laundering Directive (2018/843/EU), mandated the creation of central registries by January 2020. The directive initially contemplated public access; however, the Court of Justice of the European Union, in its judgment of November 22, 2022, in Joined Cases C-37/20 and C-601/20 (WM and Sovim SA v. Luxembourg Business Registers), circumscribed such access on data protection grounds.
The Court held that provisions enabling unrestricted public access to beneficial ownership registries were invalid as violations of Articles 7 and 8 of the Charter of Fundamental Rights of the European Union, which protect the right to respect for private life and the right to protection of personal data. The CJEU determined that such access constituted a “serious interference” with these fundamental rights and was neither limited to what was strictly necessary nor proportionate to the objectives of combating money laundering and terrorist financing.
The 2024 AML Package (Regulation (EU) 2024/1624) restores partial access for journalists and non-governmental organizations while maintaining the standard threshold of 25% or more. The Sixth Anti-Money Laundering Directive (AMLD6, Directive 2024/1640), which forms part of the 2024 package, introduces an access system predicated upon “legitimate interest”. Critically, for journalists and civil society organizations, the directive establishes a presumption of legitimate interest.
The United States Paradigm
The United States adopted the Corporate Transparency Act in 2021, establishing a registry administered by the Financial Crimes Enforcement Network (FinCEN)—a non-public registry accessible exclusively to law enforcement authorities. A revolutionary change in March 2025 eliminated reporting obligations for domestic U.S. entities, maintaining them solely for foreign entities conducting business in the United States.
In a statement dated March 2, 2025, the Department of the Treasury announced that the change was undertaken “in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest”.
Simultaneously, this development has significantly undermined the global beneficial ownership identification system—given that one can effectively “opt out” by incorporating in Delaware, Nevada, or Wyoming, or establishing a trust in South Dakota.
[See also our publication: “Offshore Companies: When They Make Sense, and When They Are Merely an Illusion of Privacy.“]
Intersection with Taxation and AML Procedures
CFC Rules and Taxation
Beneficial ownership registries fundamentally support enforcement of Controlled Foreign Company (CFC) rules, which counteract profit shifting to tax havens. Nevertheless, disparities in individual jurisdictions between CFC thresholds (typically 50%) and beneficial ownership identification thresholds (typically 25%) create a gap whereby beneficial owners holding 25-49% interests may avoid CFC rule application while remaining visible in registries.
[See also our publication: “Controlled Foreign Companies.”]
AML Compliance Architecture
Financial institutions must identify all beneficial owners holding at least 25% of interests, verify their identities, and conduct ongoing monitoring of ownership changes. Documentary obligations require data retention for five years following account closure.
The largest penalties in anti-money laundering history illustrate the magnitude of risk: BNP Paribas ($8.9 billion), TD Bank ($3.09 billion), Goldman Sachs ($2.9 billion). An emerging trend involves personal liability for management—directors may face criminal liability for willful violations and supervisory failures, including potential disqualification from serving in leadership positions.
Financial intelligence units require reporting of suspicious transactions when encountering inconsistencies in ownership structures, frequent changes in beneficial owners, or indicators of shell companies. The Egmont Group facilitates information exchange among 164 financial intelligence units globally.
The Uncertain Future of Global Transparency
For a time, the trajectory toward creating beneficial ownership registries—and making them publicly accessible—appeared inexorable. Currently, however, the future of this reform direction remains uncertain. Most jurisdictions have not implemented such measures—despite more than 100 countries committing to registry establishment, only 15 G20 countries maintain functioning central registries, and merely three (Canada, Indonesia, and the United Kingdom) provide public online access.
The United States has conspicuously withdrawn from the transparency system. In March 2025, the Trump administration and the Department of the Treasury suspended Corporate Transparency Act enforcement against domestic U.S. companies. Reporting obligations now apply exclusively to foreign entities conducting business in the United States. This dramatic reversal means that millions of American enterprises have been exempted from beneficial ownership obligations.
Paradoxically, while certain jurisdictions retreat from transparency, others move in the opposite direction. American states are filling the void left by federal withdrawal—New York, South Dakota, and Washington, D.C., are implementing their own beneficial ownership requirements, which may necessitate that enterprises file reports in each state of operation rather than through a single federal system.
This evolution reveals a fundamental conflict between financial security imperatives and fundamental rights—a conflict that remains unresolved. The future of beneficial ownership registries will likely be characterized by continued regulatory fragmentation, with each jurisdiction attempting to strike its own balance between transparency and privacy, potentially undermining global efforts to combat money laundering and terrorist financing.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.
