Ultimate Beneficial Ownership Requirement in Pakistan

In Pakistan, Ultimate Beneficial Ownership (UBO) refers to the natural person(s) who ultimately own or control a company, even if they are not the formally registered shareholders. Mandated by the SECP and FBR, companies must disclose UBOs to prevent money laundering and ensure corporate transparency. Ultimate Beneficial Ownership (UBO) refers to Section 123A — Companies Act, 2017 and Regulation 48 — Companies Regulations, 2024.

A Complete Compliance Guide for Tax Practitioners

1. What is Ultimate Beneficial Ownership (UBO)?
2. Legal Framework — Section 123A, Companies Act 2017
3. How to Identify a UBO — Four Criteria
4. UBO Situations — Simple, Complex & Shareholder Agreement
5. Company’s Role — Issuing Form-16 to Members
6. Member’s Obligation — Filing Form-17 (Declaration)
7. Change in UBO — Filing Form-18
8. Maintenance of UBO Register — Required Particulars
9. Reporting UBO Information to SECP Registrar
10. Step-Wise Process — During Incorporation (LEAP System)
11. Filing of Form-19 (Annual UBO Declaration) — Practical Demo
12. Filing of Form-A (Annual Return) with UBO Data
13. Penalties for Non-Compliance
14. Guidance for Tax Practitioners — Action Plan & FAQ

Legal Framework

Governing Law & Regulatory Basis

Section 123A — Companies Act, 2017  |  Regulation 48 — Companies Regulations, 2024

PURPOSE

To create transparency in corporate ownership and prevent misuse of legal persons for money laundering, tax evasion, and terrorist financing.

APPLICABILITY

Every company incorporated in Pakistan is required to identify and maintain records of its Ultimate Beneficial Owners.

INTERNATIONAL CONTEXT

Part of FATF (Financial Action Task Force) compliance — Pakistan’s commitment to global AML/CFT standards.

COMMENCEMENT OF REPORTING

UBO filing requirement commenced from financial years ending on or after 30th June 2025.

KEY FORMS

Form-16 (Notice to Members)  |  Form-17 (Member’s Declaration)  |  Form-18 (Change in UBO)  |  Form-19 (Compliance Declaration to Registrar)

UBO means:

“A natural person who ultimately owns or controls a company, whether directly or indirectly, through at least twenty-five percent (25%) shares or voting rights, or by exercising effective control in that company through other means.”

— Section 123A, Companies Act, 2017

“Control through other means” includes:

▸ Control through a chain of ownership (indirect ownership structure)

▸ Close relatives or associates’ control who have significant influence over finances or decisions

▸ Joint arrangements, shareholder agreements, or personal connections that confer effective control ▸ If no natural person can be identified — the senior management officials are treated as UBO

How to Identify a UBO — Four Criteria

ONE of the following criteria must be fulfilled

01 Ownership Title

02 Voting Rights

03 Effective Control

04 Senior Management

A natural person holding at least 25% shares — directly or through beneficial interest.

Direct shareholding of ≥25% in the company by the natural person.

A natural person owning at least 25% of voting rights in the company.

Right to vote on agenda items in General Meeting or EGM.

At least 25% indirect control through a chain of ownership or other means.

Joint control via relatives/family, shareholder agreement, or personal connections.

If no natural person qualifies under criteria 1-3.

CEO, COO, CFO or equivalent — highest- ranking management official.

Criterion 3 — Effective Control in Detail

Effective control refers to situations where ownership and/or control is exercised through a chain of ownership or by means of control other than direct control.

1 Joint Control Arrangements

Control exercised through close relatives, family members, and friends acting together in a coordinated manner to control the company.

2 Control Through Agreement

A shareholder agreement or other contractual arrangement that gives effective control of company finances or decisions to a natural person.

3 Personal & Family Connection

Control arising from personal or family relationships that provide the UBO with effective control over the management or resources of the company.

4 Chain of Ownership

Where a natural person controls Company A, which in turn controls Company B — the natural person is the UBO of Company B through indirect ownership.

UBO Situations — Ownership Chain

Understanding Direct vs Indirect Ownership

SIMPLE CHAIN

NATURAL PERSON (UBO) directly owned by

KEY PRINCIPLE

▸ Always trace back to the NATURAL PERSON — not the company.

▸ Aggregate shares across family/associates if acting jointly.

COMPANY 1 directly owned by

COMPANY 2 ∴ Natural Person is INDIRECTLY the UBO of Company 2

▸ 25% threshold is the trigger — direct OR indirect.

▸ One company can have MULTIPLE UBOs.

▸ A person can be UBO of MULTIPLE companies.

▸ Foreign nationals can also be UBOs.

▸ A listed company shareholder holding ≥5% triggers notice (not 25%).

UBO Situation — Pre-existing Arrangement Example

Identifying UBO when shareholding is through an intermediate company

This is Criterion 3 — Effective Control through agreement.

What practitioners must check:

• Any shareholder agreement in place?
• Any family or associate arrangements?
• Any loan agreements with control clauses?
• Any nominee shareholder arrangements?

Company’s Role — Issuing Form-16 to Members

Annual notice requirement — Regulation 48(1)

OBLIGATION:

Every company shall take reasonable measures to identify its Ultimate Beneficial Owners by issuing a notice as per FORM-16, annually, to every member.

UNLISTED COMPANIES

▸ Form-16 notice to EVERY member of the company annually.

▸ No threshold — all members regardless of shareholding percentage.

▸ Form-16 asks the member to declare their UBO details.

LISTED COMPANIES

▸ The Form-16 notice only to members holding at least 5% of shares or voting rights.

▸ Also to the representative of every legal person/arrangement holding at least 5%.

▸ Lower threshold — 5% not 25%.

Member’s Obligation — Filing Form-17

Declaration of UBO details within 14 days of receiving Form-16 notice

Every member who receives the Form-16 notice must submit Form-17 — Declaration of UBO — to the company.

TIMELINE

1          Existing Member: Within 14 days of receiving the Form-16 notice from the company.

2          New Member: Within 14 days of name being entered in the Register of Members.

3          Change in UBO: Within 14 days of any change — submit Form-18 with nature of change.

INFORMATION IN FORM-17

▸ Name of UBO

▸ Father’s/Spouse’s Name

▸ CNIC/NICOP/Passport No. (with issue & expiry dates) ▸ Date of Birth

▸ Gender

▸ Nationality & Country of Origin

▸ Address as per CNIC/NICOP/Passport

▸ Usual Residential Address (if different) ▸ Email Address

▸ Date shareholding/control was acquired
▸ Date acquired from former UBO (if applicable)

Maintenance of UBO Register

Mandatory register to be maintained by the company upon receipt of Form-17

Upon receiving any declaration (Form-17), the company must record the details in a Register of Ultimate Beneficial Owners.

1           Name                                                                                                                                                   8           Country of Origin (foreign/dual nationals)

2           Father’s/Spouse’s Name                                                                                                                  9           Address as per CNIC/NICOP/Passport

3           CNIC/NICOP/Passport No.                                                                                                              10          Usual Residential Address

4           Date of Issue & Expiry                                                                                                                     11          Email Address

5           Date of Birth                                                                                                                                     12          Date shareholding/control acquired

6           Gender                                                                                                                                              13          Date acquired from former UBO

7           Nationality                                                                                                                                         14          Any other relevant information

Filing Declaration to Registrar — Form-19

Company’s obligation to report UBO information to SECP Registrar

Every company must submit a Declaration of Compliance (Form-19) to the Registrar containing UBO information.

Within 15 Days                             From receipt of ANY declaration (Form-17) received during the year.

With Annual Return                        Filed together with the annual Form-A for that financial year.

Within 30 Days                             Of last day of calendar year — for companies not required to file annual return.

UBO REPORTING FORMS SUMMARY

Form-1 (Company Incorporation)  |  Form-2 (Foreign Company Registration)  |  Form-19 (Annual UBO Declaration) Requirement effective for financial years ending on or after 30th June 2025.

Company Issues Form-16

Issue notice to every member (or ≥5% holders for listed) annually.

Member Files Form-17

Within 14 days — member declares UBO details to the company.

Company Updates UBO Register

Record all UBO particulars in the Register of Beneficial Owners.

Changes — Form-18

Any change in UBO details — member files Form-18 within 14 days.

Company Files Form-19

Within 15 days of receipt, or with annual return — submit to Registrar.

SECP System Updates

UBO data reflected in LEAP system and company’s statutory record.

UBO During Incorporation — Step 1

Step 1: Login to LEAP System — SECP eServices Portal

Access the LEAP Digital portal at eservices.secp.gov.pk to begin the incorporation or annual UBO filing process.

UBO During Incorporation — Step 2

Step 2: Start Company Incorporation — Proposed Name

Navigate to ‘Start a LLP/Company’. Enter proposed company name. System checks availability against SECP database.

UBO During Incorporation — Step 3

Step 3: Detail of Stakeholders — Add Directors & Subscribers

Add all natural persons and body corporates as subscribers/directors. Minimum 2 members & 2 directors for private company.

UBO During Incorporation — Step 4

Step 4: Details of UBO — Subscriber Listing

System lists all subscribers. For each subscriber, click ‘ADD’ to enter UBO details. Body corporate subscribers also require UBO identification.

UBO During Incorporation — Step 5

Step 5: UBO Entry — Citizenship & CNIC Details

Select: Are you the UBO? Pakistani/Foreign national? Enter CNIC number and search NADRA database for verification.

UBO During Incorporation — Step 6

Step 6: UBO Personal Details Entry

Complete: Name, Email, Gender, Date of acquisition, Father’s/Spouse’s name, Nationality, Address as per CNIC.

UBO During Incorporation — Step 7

Step 7: Indirect Shareholding Declaration

Declare whether there is indirect shareholding (≥25%) through legal persons/arrangements. If Yes — complete Additional UBO Information.

UBO During Incorporation — Step 8

Step 8: Additional UBO Information — Indirect Control (Registered Entity)

For indirect control: Enter entity’s legal form, registration number, SECP registration status, country of origin, date of incorporation.

UBO During Incorporation — Step 9

Step 9: Additional UBO — Indirect Control (Unregistered Entity)

For non-SECP entities: Enter company name, registering authority, business address, percentage shareholding, and identity of controlling natural person.

Form-19 Filing — Navigate to Event Based Filing

Filing Form-19 — Navigate to Event Based Filing

From company dashboard: LLP/Company Services → Event Based Filing → ‘UlImate Beneficial Owner (UBO) DeclaraIon’

Choose the relevant financial year (e.g. 2025-2026). Locate ‘UBO Declaration’ column. Status shows ‘Not Filed’. Click ‘Start Filing’.

Form-19 Filing — Step 1: Ultimate Beneficial Owner Section

Confirm Form-16 was issued to all members. Enter: Date of notice, AGM date, Form-A date, number of notices issued, members who responded/failed.

Form-19 Filing — Step 2: Details of UBO per Shareholder

For each shareholder: View their shareholding details. Click ‘ADD UBO’ to link the natural person who is the ultimate beneficial owner.

Filing Form-19 — Step 3: UBO Identity Confirmation

For each subscriber: system asks ‘Are you the UBO?’ If yes — complete CNIC verification. If no — identify the actual UBO natural person.

Filing Form-19 — Step 4: CNIC Details & Verification

Enter CNIC, expiry date, date of birth. Click VERIFY for NADRA integration. System auto-populates: Name, Gender, Address from NADRA.

Form-19 Filing — Step 5: Complete UBO Personal Information

Complete: Date of acquisition, Father’s/Spouse’s name, Relation, Nationality, Country of origin, Address as per CNIC.

Form-19 Filing — Step 6: Residential Address & Indirect Control

Provide usual residential address (if different from CNIC address). Then answer: Is there indirect shareholding of ≥25%?

Filing Form-19 — Step 7: Additional UBO (Indirect Control) Table

If indirect control exists: Click ‘Add Indirect Shareholding’. Complete the indirect control table with entity details.

Form-19 Filing — Step 8: Indirect Control

Filing Form-19 — Step 8: Indirect Control — Entity Registration

Is the intermediate enIty registered with SECP? Yes → SECP CUIN lookup. No → Enter details manually.

Form-19 Filing — Step 9: Indirect Control

Filing Form-19 — Step 9: Indirect Control — Entity Details

Enter: Company name, registration number, registering authority, legal form, country, date of incorporation, percentage shareholding.

Form-19 Filing — Step 10: Indirect Control

Filing Form-19 — Step 10: Indirect Control — Controlling Person

Finally: Identify the natural person who ultimately owns/controls the legal entity. Pakistani Citizen or Foreign National? Add their identity.

Form-A Annual Return — Annual Return: Company Information

Filing Form-A — Annual Return: Company Information

Navigate to Annual Filing → Form-A. Confirm if there are changes in annual return. Update Physical Address and Contact Information.

Form-A Annual Return — Financial Information & Classification

Filing Form-A — Financial Information & Classification

Enter annual turnover (PKR), male/female employees. Click ‘Validate Classification’ to confirm company sector classification.

Form-A Annual Return — Nature of Business & Company Classification

Filing Form-A — Nature of Business & Company Classification

Select nature of business: Manufacturing / Other than Manufacturing / Both. Classification auto-generates based on SECP criteria.

Penalties for Non-Compliance

Section 123A read with Section 506 — Companies Act, 2017

✗    Co^{mpany —Failure to Identify UBO}

Company liable for penalty. Officers in default also personally liable.

✗    M^{ember —Failure to Submit Form-17}

Member who fails to submit declaration within 14 days is liable to penalty.

✗    F^{alse/Incorrect Declaration}

Submitting false UBO information is a serious offence with enhanced penalty.

✗    F^{ailure to Maintain UBO Register}

Company liable if UBO register is not maintained with required particulars.

✗    F^{ailure to File Form-19}

Non-filing of compliance declaration with Registrar within prescribed time.

⚠ Ensure all Forms (16, 17, 18, 19) are filed timely to avoid penalties and regulatory action.

Guidance for Tax Practitioners — Action Plan

Identify All Affected Clients

Every company — private, SMC, public unlisted — registered in Pakistan is required to comply. Review entire client portfolio.

Check UBO Filing Status

Has the company filed Form-19 for FY ending June 2025 or later? If not — immediate action required.

Issue Form-16 to All Members

Ensure Form-16 notice has been issued to all members (or ≥5% holders for listed). Retain proof of issuance.

Collect Form-17 Declarations

Chase all members to submit Form-17 within 14 days. For new members — ensure 14-day timeline is observed.

Update & Maintain UBO Register

Record all UBO particulars in the statutory register. Keep the register updated with every change.

File Form-19 with Registrar

Within 15 days of receiving any declaration, or along with Form-A annual return. Use LEAP system eServices.

Frequently Asked Questions

Q:  Can a company have more than one UBO?

A:  Yes. A company can have multiple UBOs — each natural person meeting any of the four criteria qualifies.

Q:  Can a foreign national be a UBO?

A:  Yes. Nationality is irrelevant. If the person controls ≥25% directly or indirectly, they are UBO.

Q:  What if no natural person holds 25%?

A:  Apply the Senior Management criterion — CEO, CFO, COO or equivalent are treated as UBOs.

Q:  Is a listed company shareholder’s threshold different?

A:  Yes. For listed companies, the Form-16 notice is issued to members holding ≥5% (not 25%).

Q:  What if a member refuses to submit Form-17?

A:  The company must document all efforts. The member is liable to penalty.

Q:  When does this requirement apply?

A:  Effective for financial years ending on or after 30th June 2025. File Form-19 with the relevant annual return.

Ultimate Beneficial Owner UBO

1           UBO is the NATURAL PERSON who ultimately owns or controls a company — not the intermediate company.

2           The 25% threshold applies to shares, voting rights, or effective control — directly or indirectly.

3           FOUR criteria: Ownership Title → VoSng Rights → EffecSve Control → Senior Management (fallback).

4           Annual cycle: Issue Form-16 → Collect Form-17 → Update UBO Register → File Form-19 with Registrar.

5           Commencement: Financial years ending on or after 30th June 2025 — many companies are already in default.

6           LEAP System is the digital platform — use eServices for Form-19 filing and incorporation process.

7           Non-compliance exposes BOTH the company AND officers in default to personal penalties.

8           As practitioners — advise clients proactively. UBO compliance is now a mandatory annual obligation.