What is beneficial ownership transparency?
Beneficial ownership transparency is a requirement for legal entities such as companies to disclose information about the people who ultimately own or control them. This person or people are the beneficial owner(s) of the legal entity.
In many cases, the beneficial owner is simply the person or people who are legal owner(s) of the entity in question. However, the legal owner of an entity such as a company can be another company; in such cases the beneficial owner is the human being(s) who ultimately own or control the company. If you’d like to learn more, our partner Open Data Services has created this primer that introduces the key concepts of beneficial ownership.
Why beneficial ownership transparency matters?
Anonymous shell companies enable corruption, fraud, organised crime and tax evasion. This undermines trust in companies and discourages investment. Public access to high quality data on who owns companies is essential to prevent corruption, organised crime and tax evasion. It improves the business environment by increasing competitiveness and reducing risk, and helps businesses and governments understand who they are doing business with.
Read our briefing and FAQs on why public beneficial ownership registers are important.
What is international best practice for beneficial ownership transparency?
More countries around the world are considering beneficial ownership transparency, including through making Open Government Partnership (OGP) National Action Plan commitments, meeting the beneficial ownership requirement in the Extractive Industries Transparency Initiative (EITI) Standard, and in Europe through implementing the 5th Anti-Money Laundering Directive.
At the 2019 OGP Summit in Ottawa, Canada, a new transnational coalition of governments commenced that will drive a global policy shift towards free, open source publicly accessible beneficial ownership data for companies, and set ambitious international best practice on beneficial ownership transparency.
Members of this Leadership Group are governments that are united by a common vision of simple access by business, civil society, and other government actors to public, open data of corporate beneficial ownership that is linked transnationally. OpenOwnership coordinates the Leadership Group, provides technical assistance and facilitates discussions on international best practice and produces related guidance. You can read more about the Leadership Group here and view the draft international Beneficial Ownership Transparency Disclosure Principles.
In addition, OpenOwnership is compiling case studies of how particular countries are implementing beneficial ownership transparency; these will be available on this website in the future.
What are the key things to consider?
There is no one-size-fits-all approach to beneficial ownership transparency, but there are some characteristics of effective beneficial ownership data that help drive policy impact across most contexts. These are:
The published data specifies how beneficial ownership is exerted, and the percentage ownership
Published data is structured and granular
Published data includes sufficient information to allow disambiguation
Historical data is kept and published
Data is collected and published in a timely manner
Our short briefing Characteristics of Effective Beneficial Ownership Data discusses recommendations for implementing each characteristic, and may serve as a useful summary of key things to think about when considering beneficial ownership transparency.
Throughout the implementation, countries should foster a community of people and organisations - across government, business and civil society - who use beneficial ownership data for public good, and who can contribute to ongoing refinements and improvements of your beneficial ownership transparency policy. This will help sustain and improve policy impact over time.
Working with us
In addition to this implementation guide, other OpenOwnership resources are:
If you need additional support, please contact our team on firstname.lastname@example.org.