UBO / Beneficial Owner Declaration

The beneficial owner is always a natural person. That single rule is what makes UBO declarations difficult: a corporate structure can be traced through three jurisdictions and four holding companies and still not have produced the name the GwG requires. The declaration form is where a financial intermediary records how far it got, and what it did when the chain ran out.

Always a natural person

No. The beneficial owner is always a natural person (a human being). If a legal entity such as a holding company is an intermediate owner, the financial intermediary must look through that entity to identify the controlling natural person(s) at the top of the ownership chain.

When the chain runs out

If, despite all reasonable measures, the beneficial owner cannot be identified — for example in the case of widely held listed companies or certain trust structures — the financial intermediary must document the steps taken, apply risk-based enhanced monitoring, and in certain cases file a suspicious activity report with MROS or decline to enter the business relationship.

What the form collects

• Full identity and contact details of each beneficial owner
• Ownership or control percentage per person
• Citizenship and country of domicile for each UBO
• Nature of control: direct ownership, indirect control, or senior managing official
• Politically Exposed Person (PEP) status and relationship
• Source of funds declaration
• Document upload for identification documents
• Signed declaration confirming accuracy and completeness

Who qualifies under the GwG

Under GwG Art. 2a and Art. 4, the beneficial owner is typically the natural person(s) who, directly or indirectly, holds 25% or more of the capital or voting rights of a legal entity, or who otherwise exercises control. Where no natural person meets this threshold — as is sometimes the case with complex holding structures — the senior managing official must be identified in their capacity as control person. For trusts and foundations, the settlor, trustee, protector, and beneficiaries (or class of beneficiaries) must all be identified.

Switzerland's anti-money laundering framework is among the most comprehensive in the world, underpinned by the Federal Act on Combating Money Laundering and Terrorist Financing (GwG), FINMA Circular 2011/1 (Video and online identification), FINMA Circular 2016/7 (Video identification), and the Swiss Federal Banking Act. The cornerstone obligation for all covered financial intermediaries is the identification and verification of the beneficial owner — the natural person(s) who ultimately owns or controls the customer entity or on whose behalf a transaction is being conducted.

PEP screening and enhanced due diligence

A beneficial owner who is a Politically Exposed Person (PEP) — a current or former senior government official, judicial officer, military officer, senior executive of a state-owned enterprise, or an immediate family member or close associate of such a person — triggers Enhanced Due Diligence (EDD) requirements. Swiss institutions must apply heightened scrutiny to the source of wealth and funds, obtain senior management approval, and conduct more frequent ongoing monitoring of PEP relationships.

The VSB 20 and FINMA expectations

For Swiss banks, the Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence (CDB / VSB 20), issued by the Swiss Bankers Association (SBA), provides detailed operational guidance on when and how to identify the beneficial owner. The VSB 20 supplements the GwG and sets out standardised forms (A, K, S, T) for documenting UBO declarations. Digital equivalents of these forms, with equivalent legal weight when signed with a qualified electronic signature, are increasingly accepted.

Retention under GwG Art. 7

GwG Art. 7 requires financial intermediaries to retain all documents and records relating to customer due diligence, including UBO declarations and supporting identification documents, for a minimum of 10 years after the end of the business relationship or after a transaction has been executed. Records must be kept in a way that allows them to be presented to MROS (Money Reporting Office Switzerland) or law enforcement without undue delay.

Collecting a declaration