Financial Crime World

Southeast Asian Countries Struggle with Beneficial Ownership Transparency

The region’s secrecy surrounding ownership transparency of legal entities and wealth hinders efforts to combat corruption, money laundering, and terrorism financing.

Understanding the Ultimate Beneficial Owner (UBO)

The definition of UBO varies by jurisdiction, but according to the Financial Action Task Force (FATF), it refers to a natural person who ultimately owns or controls a customer and those who exercise ultimate effective control over a legal entity.

Why UBO Checks Matter

Accurate and up-to-date information on beneficial ownership is crucial for company registries and regulatory authorities to prevent financial crimes, ensure national regulatory compliance, manage risks, and adhere to international standards.

Company Registries and Regulations in Southeast Asia

  • Philippines: The Securities and Exchange Commission (SEC) requires all registered corporations to submit a General Information Sheet with beneficial ownership information.
  • Singapore: Companies must maintain a Register of Registrable Controllers with beneficial ownership details.
  • Malaysia: The Companies Commission of Malaysia (CCM) maintains a registry of beneficial owners, and companies are mandated to register their beneficial owners.
  • Indonesia: A central registry for beneficial owners is in place, and corporations must submit and update their beneficial ownership information.
  • Thailand: The Department of Business Development under the Ministry of Commerce does not maintain a list of beneficial owners but provides basic company information. The Stock Exchange of Thailand mandates the disclosure of beneficial ownership.

International Regulatory Frameworks

Relevant frameworks include the United Nations Convention against Corruption, FATF or FATF-Style Regional Bodies, Extractive Industries Transparency Initiative, Open Government Partnership, G20 Anti-Corruption Working Group, and the Global Forum.

Challenges in UBO Checks and Transparency

Southeast Asian countries face significant challenges in identifying beneficial ownership and maintaining up-to-date information, including:

  • Lack of transparency in complex legal structures and sources of wealth.
  • Insufficient data verification and documentation due to data protection and confidentiality laws.
  • Diverse jurisdictional laws and regulatory requirements.
  • Lack of sanctions and enforcement.
  • Inadequate public repositories in provincial or city registries for document retrieval.

Safeguarding Business Interests through UBO Due Diligence

UBO due diligence is critical for safeguarding business interests and facilitating informed decision-making. TenIntelligence collaborates with local partners and networks and uses reliable and verifiable sources to enhance due diligence processes and reputational intelligence. Contact TenIntelligence to learn how their Intelligence team can assist you in Southeast Asia and globally.