Beneficial Owners in Holding Structures: How to Identify the UBO

If you run a company with one or two shareholders, identifying the beneficial owner may take only a few minutes. You just check who owns more than 25% of the shares. But what if your company belongs to a foreign holding structure with a dozen intermediary entities and a VC fund with a dispersed investor base at the end of the chain? Identifying the UBO, the natural person who actually controls the entity, then requires analysis of multiple ownership levels, documents from different jurisdictions, and a critical assessment of registry data.

A complex structure does not remove the obligation. A few months ago, Bank Ochrony Środowiska (BOŚ) received a PLN 1,200,000 fine for incorrectly applying the rules on identifying the beneficial owners of its customers. This is a signal to every company, from a startup with a VC investor to a company in an international corporate group, that supervisors take this obligation seriously.

This article explains how to identify a UBO step by step, from the simplest scenario to a multi-level holding structure. It covers available tools (CRBR, foreign registers, and corporate documents), what to do when the chain of companies ends without a clear owner, and a checklist for documenting verification in case of an inspection.

Key terms you need to know

Before getting into the details, it is useful to clarify the terminology. The terms below appear throughout the article and have specific legal meanings.

Who is a beneficial owner? The 25% threshold and why it is not always clear

The AML Act defines a beneficial owner as a natural person who directly or indirectly controls a customer. Control may arise from owning shares, holding voting rights, or factual circumstances, such as shareholder agreements, statutory rights, or a position within a company’s governing bodies.

The 25% threshold is a presumption, not certainty

Directive 2015/849 expressly states that “identifying a specific percentage of shares or ownership does not automatically identify the beneficial owner. It should be one of the evidentiary factors.” This means:

1. A person with 30% of the shares may not be a UBO if they do not exercise actual control, for example, because voting rights are restricted by the articles.
2. A person with 20% of the shares may be a UBO if, under a voting agreement, they control more than 25% of the votes in total.
3. Owning exactly 25% of the shares does not meet the quantitative test. The Act requires “more than 25%.”

The list is open: checking shareholdings is not enough

In Communication No. 38, the General Inspector of Financial Information (GIIF) confirmed that the statutory definition of a UBO is an open catalogue. The examples in Article 2(2)(1)(a) to (c) of the AML Act are illustrative. Even after identifying a UBO using the percentage test, an obliged entity must still examine whether other natural persons exercise actual influence over the company’s activities.

This has direct implications for technology companies with VC investors. A fund may own less than 25% but, under an investment agreement, have veto rights, the right to appoint board members, or the right to approve transactions above a certain amount. In that situation, the natural person behind the fund may meet the UBO criteria even though the formal ownership percentage is below the threshold.

When UBO identification is not straightforward

A limited liability company and an international holding: two scenarios, one obligation

Scenario 1: a Polish limited liability company with two shareholders

You have a Polish limited liability company. It has two shareholders: one owns 60% and the other 40%. Both exceed the 25% threshold, so both are beneficial owners. You report their details to CRBR within 7 business days of the company’s entry in KRS. The filing requires a qualified electronic signature or a signature confirmed with a trusted ePUAP profile, and includes a declaration that the information is true, made under threat of criminal liability.

Identification takes a few days. Documents: the company’s articles of association and a KRS extract. Cost: none, apart from the time spent on the analysis.

Scenario 2: a Polish company in a holding structure with a VC fund

Your Polish limited liability company has one shareholder, a Cypriot company. That company is 70% owned by a Luxembourg investment fund, which has a dozen or so investors from different jurisdictions. At the end of the chain are five managing partners: two own 15% each in the fund, and three own 10% each.

None of the partners individually exceeds the 25% threshold. But one has the right, under a partnership agreement, to make investment decisions alone. This may make that partner a UBO despite not having a sufficient ownership percentage.

The principle is to “search for the beneficial owner all the way to the end of the structure.” Apply the ownership multiplication method: calculate indirect ownership by multiplying ownership percentages at each level. If the Cypriot company owns 100% of the Polish company and the Luxembourg fund owns 70% of the Cypriot company, the fund’s indirect interest in the Polish company is 70%. Then identify who controls the fund.

Comparing the two scenarios

Regardless of complexity, the obligation is the same. The entity required to report information to CRBR must independently assess the factual and legal situation. The register does not verify whether the reported information is correct. The company is responsible for correctly identifying the UBO.

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CRBR, foreign registers, and other tools for identifying a UBO

The Central Register of Beneficial Owners

CRBR is a starting point, but it is neither the only nor a sufficient source of information. The register is public, and anyone can search by KRS number, NIP, or entity name. Access is divided into three levels:

1. Public authorities and financial intelligence units have unrestricted access.
2. Obliged entities, such as banks, law firms, and accounting firms, access it as part of customer due diligence.
3. Any person can access the UBO’s first and last name, month and year of birth, country of residence and citizenship, and information about the nature of control exercised.

The information in CRBR is submitted by companies and is not verified by the registry authority. Obliged entities must therefore critically assess it and compare it with other sources. If a discrepancy is found, there is a detailed process: record it, clarify it with the customer, confirm the nature of the discrepancy, prepare a justification, and notify the competent authority. A failure to report UBO information to CRBR should also be treated as a discrepancy.

The entities required to report to CRBR include general partnerships, limited partnerships, limited joint-stock partnerships, limited liability companies, simple joint-stock companies, joint-stock companies other than public companies, trusts, professional partnerships, associations registered with KRS, and foundations. Public companies are excluded because the risk of concealing a UBO is lower. Branches of foreign companies also have no reporting duty.

Foreign registers

Under the Fifth AML Directive (2018/843), EU Member States must make their central UBO registers accessible to one another. The European Beneficial Ownership Register (EBBR), launched in 2021, connects national registers, although its functionality is limited in practice because there are no uniform technical standards.

The FIU.net platform allows inquiries to be sent to national registrars in the EU, but data is exchanged through manual requests. Response times range from 14 to 45 days, depending on the country. Some EU countries, such as Luxembourg and Ireland, require additional justification for access.

Outside the EU, the situation is more difficult. There are no uniform mechanisms, and access depends on individual international agreements. In higher-risk jurisdictions, such as free-trade zones in Asia and the Caribbean, transparent UBO registers often do not exist.

Corporate documents and other sources

What to do when the company chain ends and the UBO cannot be identified

In a multi-level structure, the ownership chain may break at some point. A foreign register may not disclose information. The customer may be unable to provide documents. An intermediary company may be registered in a jurisdiction without a public UBO register.

Step-by-step procedure

1. Document every attempt to identify the UBO. Prepare a detailed note describing all steps taken, barriers encountered, such as the absence of a public register in a jurisdiction or no response to an inquiry, and sources used.
2. Contact the customer. Request documents confirming the ownership structure, such as articles of association, shareholder agreements, and extracts from foreign registers. Explain why you need them and the consequences of not providing them.
3. Use alternative sources. Commercial databases, public information, and company reports may help reconstruct the chain, but do not replace source documents.
4. Assess whether you have exhausted available measures. The fallback mechanism, naming a senior manager as UBO, is permitted only after documenting real steps to identify the UBO using the standard criteria.
5. Use fallback if the conditions are met. Identify a person in senior management, such as a board member of the Polish company, as the UBO. Document why the mechanism was used.
6. Consider refusing to establish a business relationship. If the inability to identify the UBO creates too much risk, the AML Act permits refusing to establish or continue the business relationship.

What to avoid

Using fallback too automatically, without documenting attempts to identify the UBO, may be treated by supervisors as insufficient diligence. In Communication No. 38, GIIF confirmed that the duty to identify every person who may exercise decisive influence applies even when the standard percentage criteria do not give a clear answer.

PLN 1,200,000 fine for Bank Ochrony Środowiska: lessons from the case

Bank Ochrony Środowiska (BOŚ) received a PLN 1,200,000 fine for incorrectly applying the rules on identifying its customers’ beneficial owners. It is one of the larger fines imposed in Poland for breaches of AML duties concerning UBO identification.

What we know about the case

Article 115(1) of the AML Act provides for administrative fines of up to PLN 5,000,000 for breaches by obliged entities. The fine against BOŚ was in the lower half of this range, but its size, over one million zlotys, clearly signals that supervisors do not treat UBO identification errors as minor formal shortcomings.

Lessons for your company

The BOŚ case shows that even large, regulated institutions make UBO identification mistakes. For startups and technology companies with complex ownership structures, including VC investors, foreign holdings, and convertible instruments, the risk of error is proportionally greater.

Checklist: documenting UBO verification for an inspection

The AML Act requires documentation to be kept for 5 years after the business relationship with a customer ends (Article 10(1)(2)). The following checklist can help you organize the verification process and demonstrate that it was thorough during an inspection.

UBO identification documentation

1. UBO identifying data: first and last name, every citizenship, country of residence, PESEL or date of birth for a person without PESEL, and information about the size and nature of the ownership interest or rights.
2. Description of the ownership structure: a diagram of the chain showing ownership percentages at each level. For multi-level structures, include the result of multiplying the percentages.
3. Information sources: list documents and registers used, such as KRS, CRBR, foreign registers, company agreements, investment agreements, and commercial databases.
4. Risk assessment: a note stating the risk level associated with the customer and ownership structure.
5. Comparison with CRBR: the result of comparing your findings with the register. If there is a discrepancy, document the procedure: contact the customer, explain how the UBO was identified, gather new information, confirm the nature of the discrepancy, prepare a justification, and notify the competent authority.
6. Fallback documentation: if fallback was used, provide a detailed account of attempts to identify the UBO and why the standard criteria did not produce a result.
7. Final decision: who was identified as the UBO, on what basis, who made the decision, and when.
8. Update schedule: the date of the next planned UBO review. Update the data within 14 days of learning about a change.

Changes to prepare for

A new UBO definition under the AML Regulation will apply from 10 July 2027. The provisions entered into force on 9 July 2024, but their application was postponed. The main change is that control through other means must be assessed independently and in parallel with ownership interests. Meeting one test will not remove the need to check the other. The definition of ownership interests will include not only shares and stock, but also rights to profits, other internal resources, or liquidation proceeds.

If your company has VC investors or operates in a holding structure, consider preparing UBO processes that assess both criteria in parallel, so that adapting to the new rules in 2027 does not require rebuilding the entire system.

Legal support for companies in holding structures: how we can help

Identifying a UBO in a complex ownership structure requires knowledge of corporate law, AML, private international law, and foreign registers. It is not a task that can be solved with one form.

We support founders, boards, and managers of technology companies in organizing corporate structures, including properly identifying and documenting beneficial owners. Our corporate legal support includes:

1. Ownership structure audit: analyze the chain from the Polish company to natural persons, including investment agreements, voting arrangements, and statutory rights.
2. CRBR data verification and updates: compare the factual situation with the register, identify discrepancies, and prepare update filings.
3. UBO identification documentation: prepare complete documentation under the AML Act, ready for an inspection.
4. Preparation for regulatory changes: adapt processes to the new UBO definition applying from 10 July 2027.

If your company has foreign investors, is part of a holding structure, or is preparing for a funding round, contact us. We will help organize the ownership structure and prepare documentation before an inspection.

Summary

Every company must identify its beneficial owner, whether it has two shareholders or sits beneath a multi-level holding with a VC fund at the end of the chain. The 25% threshold is a starting point, not the answer. CRBR is a supporting tool, not a sufficient source. A complex structure does not remove the obligation, as shown by the PLN 1,200,000 fine imposed on BOŚ.

Three things to do now:

1. Check whether the CRBR data matches the current factual situation of your company.
2. Document the UBO identification process, especially if the ownership structure changed after the last funding round.
3. Prepare for the rules applying from 10 July 2027. The new UBO definition requires ownership and control through other means to be examined in parallel.

If you need support auditing the ownership structure or preparing UBO documentation, contact us.

Frequently asked questions

Does the 25% threshold mean that a shareholder with exactly 25% is a beneficial owner?

No. The AML Act says “more than 25%,” meaning at least 25.01%. Exactly 25% does not meet the percentage test. However, that person may still be a UBO on another basis, for example, if voting arrangements or statutory rights give them actual control over the company.

Does a public company have to report its beneficial owners to CRBR?

No. Public companies, meaning companies with at least one share admitted to trading on a regulated market or introduced to trading in an alternative trading system in Poland, are exempt from CRBR reporting. The exemption reflects the lower risk of hiding a UBO in companies subject to market transparency requirements.

What is the deadline to report data to CRBR, and what happens if it is missed?

The deadline is 7 business days from the company’s entry in KRS for a new company, or 7 days after a change in the data. UBO data should be updated within 14 days of learning about a change. Failure to report on time can result in a fine of up to PLN 1,000,000. A beneficial owner who fails to meet their information duty to the company may also face a fine of up to PLN 50,000.

What should I do if I cannot identify the UBO because the ownership chain ends in a jurisdiction with no public register?

Document every attempt to identify the UBO, including register inquiries, correspondence with the customer, and alternative sources used. Only after exhausting available measures may you use the fallback mechanism and identify a person in senior management, such as a board member, as the UBO. Using fallback automatically without documenting identification attempts may be treated by supervisors as insufficient diligence.

Does a branch of a foreign company in Poland have to report a UBO to CRBR?

No. The CRBR reporting duty does not apply to foreign companies conducting business in Poland through a branch. The duty applies to entities listed in Article 58 of the AML Act, including Polish commercial companies registered in KRS, trusts, associations, and foundations.

What UBO identification changes will apply in 2027?

From 10 July 2027, the new UBO definition under the AML Regulation will apply. The main change is that control through other means, such as voting arrangements or the right to appoint governing bodies, must be assessed independently and in parallel with ownership interests. Meeting one test will not remove the need to verify the other. The definition of ownership interests will expand to include rights to profits, internal resources, and liquidation proceeds.