Implementation of Beneficial Ownership Transparency in ASEAN Member States and Timor-Leste

Beneficial Ownership Thresholds in Focus States

Definition of Beneficial Ownership

• All focus states have a legal and regulatory framework that includes a definition of the term “beneficial owner.”
• However, there are variations in how these definitions are implemented and enforced.
• Some focus states rely on anti-money laundering/countering the financing of terrorism (AML/CFT) obligations to define beneficial ownership, while others use tax, company, or corporate/commercial registration frameworks.

Ownership Thresholds

• Specific ownership thresholds are defined by some focus states to determine beneficial ownership, ranging from 5% to 25%.

• The following table provides a summary of the ownership thresholds for each focus state:

  Table 3: Ownership Thresholds

  Country	Ownership Threshold
  Brunei Darussalam	5%
  Cambodia	10%
  Indonesia	20%
  Lao PDR	N/A
  Malaysia	25%
  Myanmar	10%
  Philippines	25%
  Timor-Leste	N/A
  Thailand	5%
  Singapore	25%
  Viet Nam	10%

Key Features of Beneficial Ownership Definitions

• Most focus states define beneficial ownership with reference to natural persons, although Singapore specifically distinguishes between “corporate controllers” and “individual controllers.”
• The concept of direct and indirect ownership is covered by most focus states, although this is less clear for Lao PDR.
• Other means of defining control, such as voting rights, membership in a legal entity, and/or participation in the decision-making process of a legal entity, are also defined by most focus states.

Conclusion

• The report highlights the importance of implementing effective beneficial ownership transparency frameworks to prevent illicit financial flows and promote good governance.
• It also emphasizes the need for focus states to strengthen their legal and regulatory frameworks to ensure that they are compliant with international standards and best practices.