Here is your first Forum » Ultimate beneficial owner of the bank

In general, a beneficiary is an individual who derives a profit or other benefit from something. In the financial world, a beneficiary refers to someone qualified to receive distributions from a will, life insurance policy, or trust. In business, it refers to a beneficial owner who ultimately owns and controls a business and/or other natural person on whose behalf a particular transaction is being conducted. Beneficiary is a person who exercises ultimate effective control over a legal entity or arrangement. The notions of ultimate ownership or control and ultimate effective control are useful in situations where ownership of the entity is exercised through a chain of ownership and does not clearly identify the direct and actual owner of the entity.

Importance of identifying a ultimate beneficial owner of the account
Beneficial ownership is currently the main concern for anti-money laundering (AML) compliance professionals in banks. And there's a good reason for that. By developing comprehensive know-your-client (KYC) and other due diligence procedures before opening a bank account and throughout working with clients, banks have succeeded in fighting terrorism, tax fraud and other crimes. Large-scale fraud is often related to the inappropriate use of commercial structures. For example:

60% of abusive companies are involved in white-collar and financial crime;
75% of known criminal organizations use companies to cover up their activities.
While banks risk losing their customers and profits after stepping up their KYC and other due diligence procedures again, this is usually done to meet increasing AML requirements from national governments and international institutions. Global AML standards dictate that understanding the ultimate beneficiaries of bank accounts is an essential part of any financial institution's AML program and can be achieved through extensive know-your-client and other due diligence processes.

Who exactly is considered the ultimate beneficiary of the bank account?
The Fourth Money Laundering Directive of the EU (MLD4) is essentially aimed at the final beneficiaries. Under this policy, ultimate beneficial ownership is presumed in one of three cases:

A natural person holds 25% or more of the capital of the legal person;
A natural person can exercise 25% or more of the voting rights during general meetings;
A natural person is a beneficiary of 25% or more of the capital of the company.
It is sometimes difficult to determine the ultimate beneficiaries of a company. The above policy also requires that officers be treated as beneficial owners if the above criteria are not met.

Ultimate beneficial owner and the nominees
If a beneficial owner wishes to keep their name out of public records, the company can use a nominee shareholder service. The nominee shareholder is generally an independent third party with which the legal entity's shares are formally registered and held on behalf of a beneficial owner. The ultimate beneficiary of the company can enjoy actual ownership of the company while public ownership is held on behalf of the nominee shareholder. Generally, the true identity of the ultimate beneficiary is known only to the law firm or company incorporation service and the beneficiary himself.

The final beneficiaries usually do not want to lose control of their company, but they also do not want to be perceived publicly as the owner of the company. Therefore, it is crucial to create adequate documentation that proves the rights of true ownership. These documents include a Declaration of Trust and a Nominee Services Agreement and will be kept strictly confidential.