Saudi Gazette report

RIYADH — Minister of Commerce Dr. Majed Al-Qasabi has approved amended rules for identifying the beneficial owner.

The new rules stipulate that a natural person must hold 25 percent or more ownership, whether direct or indirect, to be considered the beneficial owner.

In cases where no owner meets this percentage, or if their identity is in doubt, the rules rely on the criterion of effective and ultimate control of the company as an alternative.

Only as a last resort, if the beneficial owner cannot be identified according to the two aforementioned criteria, the designation will be assigned to the company's manager, a board member, or the chairman—depending on the company's structure.

The rules also regulate the concept of a partner or shareholder acting on behalf of another person. Anyone exercising share or stake rights on behalf of another person must disclose the beneficial owner's information and report any changes within 15 days.

In a key amendment, the rules exempt subsidiaries of companies listed on the Stock Exchange from these disclosure requirements, given that listed companies are already subject to higher disclosure standards under market regulations.