Minister of Commerce approves actual beneficiary rules

Minister of Commerce Majid Al-Kassabi approved the actual beneficiary rules, which will take effect on April 3, 2025, the official gazette Umm Al-Qura reported on Friday.

The rules aim to enhance corporate transparency in line with international standards and establish a database for recording and maintaining the actual beneficiary information.

The rules apply to companies subject to corporate laws, except for companies listed on the capital market.

The actual beneficiary is a natural person who directly or indirectly owns at least 25% of the company’s share capital, as well as controls 25% minimum of total voting rights. He is also the one who has the power to appoint or remove the company’s manager, board majority, or chairman. Further, he should be able to influence the company’s decisions or operations, acts as a legal representative of an entity meeting any of the above criteria, as well as serves as a director or board member in the company.

Under article 5 of the rules, founders should disclose the actual beneficiary details when establishing a company. Companies should also take reasonable measures to identify and verify their actual beneficiaries and maintain supporting documents.