In response to intensified efforts by the Ministry of Commerce and Industry (MOCI) to enforce beneficial ownership disclosures, approximately 31,700 companies have submitted their ownership details within four days. This surge accounts for 4.3% of the total 226,938 valid commercial licenses. Consequently, the overall compliance rate has now risen to 55%, reflecting growing adherence to regulatory requirements.

Understanding the Compliance Surge

The Ministry of Commerce has witnessed a steady influx of business owners seeking clarity on the "actual beneficiary" disclosure process. These individuals fall into two main categories:

• Seeking Guidance – Business owners looking for procedural assistance regarding beneficial ownership disclosure.
• Expired License Holders – Owners of suspended or expired licenses who have not submitted financial reports for years.

Ministry officials have advised affected businesses to either regularize their status or cancel their commercial licenses to avoid penalties. Consequently, some business owners have opted to update their records, while others have initiated the cancellation process.

Aligning with FATF Recommendations

To strengthen compliance with Financial Action Task Force (FATF) recommendations on anti-money laundering (AML) and counter-terrorism financing (CTF), the Ministry of Commerce aims to increase the disclosure rate to 60% by June. Failure to comply will result in financial penalties.

To simplify the process, the Ministry is integrating the "Beneficial Owner" disclosure service into the Sahel Business platform, providing a user-friendly interface with clear step-by-step instructions.

Who Must Disclose Beneficial Ownership?

Under Ministerial Resolution No. 16 of 2025, all business entities listed in the commercial register, including sole proprietorships and various company types, must disclose their beneficial owners. However, exemptions apply to:

• Publicly listed companies (domestic or foreign stock exchanges)
• Government-owned entities

Penalties for Non-Disclosure and False Information

The Ministry is preparing to impose strict penalties for non-compliance and inaccurate disclosures. The penalties include:

• KD 1,000 fine for failing to disclose ownership details after the grace period (post-Eid).
• Escalating fines up to KD 10,000 for continued non-compliance.
• Additional penalties under Law 106 on AML/CTF, which can reach KD 500,000 for severe violations.

Authorities will verify submitted data, and individuals found to have provided false information will face further legal consequences.

Deadline for Compliance Approaching

The Ministry has set a March deadline for businesses to either disclose beneficial ownership details or cancel their expired licenses. Canceling a commercial license involves coordination with multiple agencies, including the Public Authority for Manpower, and typically takes two to three weeks.

To avoid financial penalties, businesses with inactive licenses are urged to submit cancellation requests immediately. The Ministry has reported a significant increase in inquiries and license cancellations as businesses seek to comply with the new regulations.