AMLR beneficial ownership: why 25% is not the only test

Under the EU Anti-Money Laundering Regulation, a beneficial owner of a company is any natural person who holds 25% or more of it, directly or indirectly, or who controls it by any means. The arithmetic for indirect stakes is now written into the text itself: multiply along each chain of holdings, then add the chains together. A second test, for control, catches the people the arithmetic misses, and it is the one most onboarding checklists are not built for yet.

Regulation (EU) 2024/1624, the AMLR, applies from 10 July 2027 (Article 90). It is a regulation, not a directive, so these rules apply as written in every member state, with no national transposition to soften or reinterpret them. The detail around it is filling in: on 1 October 2026, AMLA submitted its final draft standards on customer due diligence (Article 28(1)) to the European Commission, proposed to apply six months after they enter into force. The beneficial ownership definitions below sit in the Regulation itself. This post walks through Articles 51 to 54 with worked examples, then lists what to change in a KYB process before the date.

Two routes to being a beneficial owner

A beneficial owner is a natural person who either holds an ownership interest in the company or controls it. Article 51 sets out both routes, and adds that control via other means "shall be identified independently of and in parallel to" ownership.

In practice that means two tests on every structure. Failing the ownership test does not end the analysis: a person at 5% who can appoint the board is a beneficial owner, and a person at 30% is one even if they control nothing.

Rule one: multiply down each chain, add across chains

An ownership interest is "direct or indirect ownership of 25 % or more of the shares or voting rights or other ownership interest", including rights to a share of profits or of the liquidation balance (Article 52(1)). For indirect holdings the text is explicit: the percentage "shall be calculated by multiplying the shares or voting rights or other ownership interests held by the intermediate entities in the chain" and "by adding together the results from those various chains". All shareholdings on every level of ownership count.

Two people, one target company:

Two consequences follow, and both break common shortcuts.

No layer is judged on its own. A checklist that asks whether each intermediate holding crosses 25% is not applying the text. The text asks for the product along the chain.

Small stakes add up. Three vehicles holding 9% each, all wholly owned by the same person, make a 27% beneficial owner, while no single chain would flag anything. Finding that person means building the whole graph, not reading the register entry of the target company.

The threshold is also not fixed forever. Under Article 52(2), the Commission assesses by 10 July 2029 whether categories of higher-risk entities need a lower threshold, which would be set at a maximum of 15% unless a higher one is justified, and in any case below 25%. Build the threshold as a setting, not as a constant.

Rule two: control, and where it overrides the arithmetic

Control is "the possibility to exercise, directly or indirectly, significant influence and impose relevant decisions within the legal entity" (Article 53(2)). It comes in two forms:

• Control through ownership interest: direct or indirect ownership of 50% plus one of the shares or voting rights.
• Control via other means, which always includes a majority of voting rights, the right to appoint or remove a majority of the board, relevant veto or decision rights attached to shares, and decisions on the distribution of profit (Article 53(3)). Article 53(4) adds agreements between owners, provisions in the articles of association, voting arrangements and similar.

The subtle part is Article 54, which deals with chains where ownership and control coexist at different layers. Article 52(1) itself says multiplication applies "unless Article 54 applies". In those structures, the beneficial owners are:

1. the natural persons who control, directly or indirectly, legal entities that have a direct ownership interest (25% or more, per Article 52(1)) in the company, whether individually or cumulatively (54(a));
2. the natural persons who have an ownership interest in the entity that controls the company, directly or indirectly (54(b)).

Two examples show why this matters:

In both cases, a process that only multiplies percentages would clear the person, and on a plain reading of the text both are beneficial owners. This is our reading of the Regulation and not legal advice: Article 54 is new drafting, and supervisory guidance may refine how it is applied to specific structures. The direction, though, is clear enough to design for.

When nobody qualifies

Sometimes every test comes back empty. Article 63(3) asks the legal entity to keep records of the actions taken to identify its beneficial owners, and Article 63(4) asks it to provide a statement that none could be determined, with a justification, plus the details of its senior managing officials.

For an obliged entity, the lesson is the same as for its customer: a "no beneficial owner" outcome is only defensible with the trail that led to it. The graph you built, the documents you read and the dead ends you hit are the evidence.

The central register is necessary, not sufficient

Article 22(7) asks obliged entities to verify the identity of the beneficial owner through identity evidence or "reasonable measures" using the customer or other reliable sources, including public registers other than the central registers, and then, in addition, to consult the central register. The register is one source among several, not the answer.

When your findings disagree with it, Article 24(1) requires you to report the discrepancy to the central register within 14 calendar days of detecting it, with the information that shows it and whom you consider the beneficial owners to be. Article 24(2) lets you ask the customer for more information instead of reporting in two cases: typos, transliteration or minor inaccuracies that do not affect who the beneficial owners are, and outdated data where you know the beneficial owners from another reliable source and have no grounds to suspect concealment. On the other side, companies must report changes to the register within 28 calendar days and verify their own beneficial ownership information at least once a year (Article 63(2)).

A 14-day reporting clock has a practical consequence: for every percentage and every name in a file, you need to know which source said it, and when.

What to change before July 2027

1. Compute, do not eyeball. For each natural person, calculate the total stake across every chain, and keep the direct and indirect parts visible.
2. Run the control test separately. Record which route each beneficial owner qualifies through: ownership, control through ownership, control via other means, or Article 54.
3. Make the threshold configurable. A delegated act could lower it for some entity categories after July 2029.
4. Keep the source of every value. Which register, which document, which date. Without it, the 14-day discrepancy obligation is guesswork.
5. Record the dead ends. A "no beneficial owner" conclusion needs the trail behind it.

Where Dotfile fits

Dotfile's ownership unravelling builds the ownership graph from registry data and documents, follows company shareholders layer by layer, and computes each person's total stake across chains, split into direct and indirect. A separate control view shows voting rights and board positions next to shareholdings, so the analyst applying Article 54 sees both at once. Data Lineage records which source reported each company value and when. Deciding who qualifies under Article 54 stays with the analyst who signs the file, which is where the Regulation puts it.