Saudi Arabia’s new Beneficial Owner Rules: Key regulatory developments and compliance considerations

As part of Saudi Arabia’s ongoing regulatory reforms aimed at strengthening corporate governance and transparency, the Ministry of Commerce (Ministry) issued the Beneficial Owner Rules on 05/06/1447 AH (corresponding to 26/11/2025 G) (the Rules).

These Rules, which replace Ministerial Resolution No. 235 dated 13/08/1446 AH (corresponding to 15/01/2025 G), became effective 30 days after publication in Umm Al-Quraa on 5 December 2025. They form part of a broader framework aligning the Kingdom’s corporate disclosure standards with international best practices.

It is anticipated that the Ministry will issue guidelines to clarify the application of the Rules, particularly in relation to complex ownership and control structures. Until such guidance is available, companies operating in the Kingdom must comply with the Rules based on their wording and regulatory intent.

This article highlights key provisions of the Rules and sets out the main compliance considerations for companies operating in Saudi Arabia.

Purpose of the Rules (Article 2)

The Rules pursue two principal objectives:

• Enhancing corporate transparency in line with international standards; and
• Establishing a centralised electronic database for registering and maintaining Beneficial Owner information.

These objectives reflect the Kingdom’s broader policy direction toward accountability, regulatory oversight, and integrity in corporate ownership structures.

Scope of Application (Article 3)

The Rules apply to all companies subject to the Companies Law, except joint-stock companies listed on the financial market. This exclusion raises compliance questions for subsidiaries of listed companies, which are addressed under Article 7.

Determination of the Beneficial Owner (Article 4)

Article 4 of the Rules adopts a cascading approach to identifying the Beneficial Owner:

• Ownership Criterion: Any natural person holding 25% or more of the company’s capital, directly or indirectly.
• Control Criterion: If ownership is unclear or disputed, any natural person exercising ultimate effective control by any means other than ownership.
• Management Criterion: If no individual qualifies under the above, the company’s manager, board member, or chairman is deemed the Beneficial Owner.

Subsidiaries of Listed Companies (Article 7)

Article 7 of the Rules provides that subsidiaries of listed companies are exempt from disclosing full Beneficial Owner details, but remain subject to certain disclosure requirements. Pending official guidance, a practical interpretation is that only the name of the Beneficial Owner must be disclosed, without detailed personal data.

Additional Compliance Provisions

• Article 5: Companies must maintain accurate and updated Beneficial Owner data, disclose any changes within 15 days of their occurrence, and confirm the information on record annually.
• Article 6: Partners or shareholders acting by proxy must disclose details of the person they represent.
• Article 8: The Ministry may request additional information and issue guidelines.
• Article 9: Companies must maintain a dedicated register and submit detailed data to the Ministry (including name, nationality, ID/passport details, address, and ownership/control description).
• Article 10: Data must be retained for five years after deregistration.
• Article 11: Data may be shared with regulatory authorities and foreign entities in accordance with applicable laws.
• Article 12: Non-compliance may result in penalties under the Companies Law.

Compliance Considerations

The introduction of the Beneficial Owner Rules underscores the Kingdom's increasing regulatory focus on transparency, accountability and traceability. Companies should:

• Review ownership and control structures;
• Identify Beneficial Owners in accordance with Article 4;
• Maintain a dedicated register and supporting documents;
• Disclose changes within 15 days and complete annual confirmations;
• Prepare for potential Ministry information requests and future guidance; and
• Ensure compliance with retention and disclosure obligations to avoid penalties.

For more information on the Beneficial Owner Rules reach out to Alain Sfeir or Atif Mulla.