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Recently, Administrations for Market Regulation and banks across various regions have urgently published notices urging companies to complete their Ultimate Beneficial Owner (UBO) filing. According to the Measures for the Administration of Beneficial Ownership Information (the Measures) , jointly issued and implemented by the People's Bank of China and the State Administration for Market Regulation in 2024, companies that were registered before the Measures (i.e., before November 1, 2024) must complete their UBO filing by November 1, 2025. For these companies, the final filing deadline is now only one week away!
What is a "beneficial owner?"
The Measures define an ultimate beneficial owner (UBO) as a natural person who ultimately owns or controls a company, or as a natural person who enjoys the ultimate economic bene-fits of the company. In other words, the ownership chain must be traced to natural persons, but it is not necessary to identify all natural person shareholders. Generally, a UBO is a natural person who ultimately holds 25% or more of the shares or voting rights The Measures specify four criteria to identify UBOs in companies with complex shareholding structures.
For certain market entities—such as wholly state-owned enterprises, state-controlled enterprises, or foreign company branches—there are additional provisions regarding UBOs.
Specifically, under the Measures, companies are required to file UBO information with the Administration for Market Regulation when registering or updating their registration. The dis-closed information must reach the ultimate natural person shareholders and include: name, gender, nationality, date of birth, usual residence or workplace, identification documents, type of beneficial ownership relationship, and relevant dates. Strictly speaking, if multiple natural persons meet the UBO criteria, all of them must be filed.
In light of China's information security and privacy requirements, the disclosed UBO information is not publicly available.
Which authorities require UBO filing?
In the field of business registration, although the UBO filing system is newly implemented, the actual controller filing system has been in place for some time. However, the standards for identifying UBOs differ from those for actual controllers and regulators treat these two filing systems differently. The current emphasis on UBO filing reflects the regulators' careful and prudent approach.
In the taxation field, tax laws also contain provisions on "beneficial owners," which are different from the UBO concept in the Measures. Tax-related disclosure of beneficial owners generally only applies when taxpayers seek treaty benefits under Chinese or relevant international tax arrangements.
In the banking sector, prior to the Measures, the People's Bank of China already required financial institutions to strengthen customer identification to improve anti-money laundering, counter-terrorist financing, and anti-tax-evasion mechanisms. For companies, this typically applies when opening a bank account or updating shareholder information, requiring disclosure of UBOs to the bank. Since the Measures were issued, banks have significantly strengthened their re-view and supervision of UBO filings, and companies that have not completed filing may face restrictions in normal business operations.
What are the legal consequences for failing to file as required?
Companies that fail to file UBO information within the pre-scribed timeframe under the Measures may face administrative penalties, including orders to rectify within a deadline and fines of up to RMB 50,000.
Based on our recent experience, if companies fail to complete their UBO filing on time, their normal operations may be affected. For example, banks may require companies to complete UBO filing before providing further services. Regulatory authorities may also require complete UBO disclosure, and compliance with filing obligations may be linked to the company's credit record.
In summary, with only one week remaining before the final filing deadline set by the Measures, we strongly recommend that all companies complete their UBO filing as soon as possible!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
