Under Regulation (EU) 2024/1624 (the AMLR), a person holding 25% or more of the ownership interests or voting rights in a legal entity is presumed to be a beneficial owner for anti-money laundering and counter-terrorist financing purposes. This threshold is not merely a technical definition: it determines who must be identified, verified, and reported to central registers, and it carries direct enforcement consequences for obliged entities operating across the European Union. As the full AMLR/AMLD6 framework applies from 10 July 2027, businesses, funds and crypto-asset service providers have a narrowing window to align their ownership structures and compliance programmes accordingly.
Legal Framework: Where the 25% Threshold Comes From
The beneficial ownership threshold of 25% or more is established directly in the AML Regulation (EU) 2024/1624. Unlike its predecessors, the AMLR is a directly applicable regulation rather than a directive, which means there is no transposition buffer: the threshold is uniform across all EU member states from the date of application. Complementing the AMLR, Directive (EU) 2024/1640 (AMLD6) governs the architecture of beneficial ownership registers and the supervisory bodies that enforce the rules at national level.
This two-instrument structure matters in practice. The AMLR defines who qualifies as a beneficial owner and imposes obligations on obliged entities – banks, payment institutions, crypto-asset service providers (CASPs) seeking or holding a CASP licence under MiCA, notaries, auditors, and others. AMLD6 then specifies how member states must maintain and interconnect their registers and how competent authorities must supervise compliance. The interaction between the two texts creates obligations that operate simultaneously at the entity level and the register level, and a gap in either can constitute a breach.
The European Banking Authority (EBA) historically developed technical standards and guidelines in the AML/CFT space. From 1 January 2026, those mandates transferred to the newly established Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), which became operational on 1 July 2025 with its seat in Frankfurt. AMLA is expected to publish the bulk of its regulatory technical standards and implementing technical standards – 23 in total – by 10 July 2026, providing granular guidance on how the 25% threshold should be applied and documented in complex ownership structures.
What "25% or More" Actually Means – Interpretation and Open Questions
The threshold sounds straightforward, but its application to layered or dispersed ownership structures raises a set of questions that remain only partially resolved ahead of the 10 July 2027 application date.
- Aggregation across indirect holdings. The AMLR requires obliged entities to look through chains of legal entities and aggregate holdings to identify ultimate beneficial owners. A person holding 30% of a holding company that itself holds 90% of an operating entity is, on a look-through basis, an indirect beneficial owner of the operating entity with an effective stake well above 25%. Establishing this in practice requires documented ownership charts and, in many cases, declarations from foreign intermediaries.
- Joint control and contractual arrangements. Shareholders acting in concert, or persons exercising control through contractual mechanisms rather than equity, may fall within the beneficial ownership definition even if their nominal equity stake is below 25%. The AMLR addresses this by including persons who control a legal entity through other means, but the boundaries of "other means" will require further elaboration in AMLA's forthcoming technical standards.
- Trusts, foundations and similar structures. For trusts, the beneficial owner concept extends to settlors, trustees, protectors, beneficiaries or classes of beneficiaries, and any other natural persons exercising ultimate control. The 25% threshold has a different – and in some configurations, broader – application to these vehicles, and firms advising on trust structures in cross-border contexts should treat this as a distinct analytical exercise.
- No beneficial owner identified. Where no natural person meets the 25% threshold and no control through other means can be established, the AMLR requires obliged entities to record the senior managing official as the beneficial owner and to document the steps taken. This is not a safe harbour: regulators and AMLA supervision will scrutinise whether genuine efforts were made.
- CASPs and MiCA integration. Under MiCA, a crypto-asset service provider applying for authorisation must disclose its beneficial owners. The 25% threshold in the AMLR feeds directly into the MiCA authorisation process, meaning that unresolved beneficial ownership questions can block or delay a CASP licence. ESMA and EBA (now AMLA) guidance links AML/CFT compliance to the MiCA supervisory framework, making beneficial ownership identification a gateway requirement rather than a parallel obligation.
For deeper analysis of how MiCA enforcement intersects with AML/CFT requirements for unlicensed entities, see our review at MiCA enforcement and unlicensed EU operators.
Practical Impact on Obliged Entities: What Changes and When
The timeline matters considerably. AMLA became operational on 1 July 2025. The AML/CFT technical mandate transferred from EBA to AMLA on 1 January 2026. AMLA published its Single Programming Document 2026–2028 on 4 February 2026, setting out institutional priorities. The deadline for most of the 23 AMLA regulatory and implementing technical standards is 10 July 2026. The AMLR and AMLD6 then apply in full from 10 July 2027, and direct AMLA supervision of selected high-risk entities begins in 2028.
This sequence has a practical implication: obliged entities cannot afford to treat 2027 as a distant horizon. Technical standards published by July 2026 will set the detailed requirements; institutions will need time to embed them into customer due diligence workflows, training programmes, and technology systems. For groups operating in multiple jurisdictions, the challenge is amplified because AMLD6 register rules will be implemented at national level, and those implementations may differ in procedural detail even if the substantive threshold is uniform.
Concretely, obliged entities should expect to:
- Maintain documented beneficial ownership maps for all corporate and fund clients, updated at least on a risk-sensitive periodic basis and whenever a material change occurs.
- Cross-reference client-provided ownership information against the relevant national register under AMLD6, noting any discrepancy and reporting it to the competent authority as required.
- Retain records of the steps taken to identify beneficial owners, including cases where no individual above 25% could be found.
- Apply enhanced due diligence where ownership structures are complex, involve high-risk jurisdictions, or use legal arrangements that obscure beneficial ownership.
- For CASPs, integrate beneficial ownership documentation into the MiCA authorisation file and keep it current throughout the licence lifecycle.
Entities with significant German operations should note that the national supervisory architecture for AML/CFT will continue to operate alongside AMLA, at least until direct AMLA supervision begins in 2028. Our AML compliance practice in Germany addresses the interaction between federal supervisory expectations and the incoming AMLA framework.
If your organisation is reviewing its beneficial ownership policies ahead of the July 2026 and July 2027 deadlines, our AML/CFT team is available to assist. Please write to info@ferrazwhitmore.com or visit our contacts page to arrange a preliminary discussion.
Cross-Border Implications: Groups, Funds and Non-EU Parents
The AMLR's directly applicable threshold creates particular complexity for groups whose ultimate ownership is held outside the EU. A non-EU parent holding more than 25% of an EU-regulated entity is a beneficial owner under the regulation, and the EU obliged entity bears the responsibility for identifying, verifying, and recording that person or entity. Where the parent is itself a corporate body, the look-through analysis continues up the chain until a natural person above the threshold is identified.
For investment funds, the beneficial ownership analysis can be especially intricate. Limited partnerships and equivalent structures may have general partners exercising control regardless of their economic interest and limited partners whose economic interest crosses the 25% threshold. Different investor share classes, carried interest arrangements, and side letters can all affect the analysis. The AMLR does not eliminate these complexities; it requires obliged entities to work through them systematically and document their conclusions.
Non-EU groups listing securities or seeking to operate financial services in the EU must also consider how their home-country ownership disclosure regimes interact with EU AML/CFT requirements. These are not always aligned, and gaps between a home-country filing and the AMLR look-through requirement can create silent compliance failures. Where ownership structures have tax-planning dimensions, those should be reviewed jointly with beneficial ownership analysis; our tax law practice regularly works alongside our AML/CFT team on exactly these intersections.
The European Commission and AMLA retain supervisory interest in ensuring that obliged entities in high-risk sectors do not rely on foreign law or foreign register gaps as a reason to leave beneficial ownership questions unresolved. Cases referred to the CJEU and published on EUR-Lex have progressively reinforced the principle that EU AML/CFT obligations are not displaced by domestic privacy law or corporate secrecy rules in third countries.
Strategic Recommendations
Given the regulatory timeline and the direct applicability of the AMLR, the following approach is likely to be appropriate for most affected organisations, though any specific action should be assessed against the particular facts and the advice of qualified counsel.
- Conduct a gap analysis now. Compare current beneficial ownership identification and verification procedures against the AMLR requirements. Identify where the 25% threshold is applied differently from the incoming standard, where documentation is incomplete, and where look-through analysis has not been carried out to natural persons.
- Map the AMLA technical standards pipeline. The 23 RTS/ITS due by 10 July 2026 will define procedural detail. Monitoring their publication and integrating requirements into compliance programmes before the July 2027 application date is preferable to reactive adjustment.
- Review MiCA-related ownership files. For CASPs or applicants, ensure that the beneficial ownership disclosure in the MiCA authorisation file is consistent with the AMLR definition and kept current. An inconsistency identified by a competent authority during supervision is far more disruptive than one identified and corrected proactively.
- Establish a register discrepancy protocol. AMLD6 requires obliged entities to report discrepancies between client-provided information and register data. Having a documented internal protocol for identifying and reporting discrepancies – rather than ad hoc responses – will be an indicator of robust AML/CFT governance during supervisory review.
- Engage with national supervisors proactively. Until direct AMLA supervision begins in 2028, national competent authorities will remain the primary interface for most obliged entities. Engaging with supervisors on complex ownership structures before a problem arises is consistently more effective than responding to enforcement enquiries.
Outlook: What to Expect Between Now and 2028
The period between mid-2026 and July 2027 is the critical implementation window. AMLA's technical standards will be published; national registers under AMLD6 will be updated and interconnected; and supervisory expectations will crystallise. For groups with complex or layered ownership structures, this period should be treated as an opportunity to resolve ambiguities rather than defer them.
From 2028, direct AMLA supervision of selected high-risk obliged entities – expected to include certain CASPs and cross-border financial groups – will introduce a new supervisory dynamic. AMLA will have direct investigative and enforcement powers, and its findings will carry EU-wide authority. The transition from EBA to AMLA has already begun to reshape the institutional landscape: AMLA's Single Programming Document 2026–2028 signals an institution building supervisory capacity at pace.
Businesses and funds that treat the 25% beneficial ownership threshold as a procedural formality rather than a substantive compliance obligation are likely to find the 2027–2028 transition more disruptive than those that have invested in systematic documentation and governance. The regulatory direction is clear: greater transparency, more granular verification, and less tolerance for structures whose ultimate ownership cannot be identified.
Our team assists clients in mapping beneficial ownership structures, preparing for AMLA supervisory requirements, and coordinating AML/CFT compliance with MiCA authorisation processes. To discuss your specific situation in confidence, please contact us at info@ferrazwhitmore.com or through our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.