Europe’s push for greater transparency around company ownership and wealth structures is creating an increasingly difficult balance between financial crime prevention and personal privacy.
The issue has come back into focus following a cyberattack on Liechtenstein’s register of beneficial owners. The register contains personal information relating to the beneficial owners of companies, foundations and trusts. The incident reportedly exposed information relating to thousands of entities, highlighting a concern that sits alongside the original purpose of these registers: how can transparency requirements be expanded without creating unnecessary risks for the individuals whose information is being collected?
Transparency is becoming the norm
Beneficial ownership registers are not new. Liechtenstein introduced its register in 2021 as part of the implementation of European anti-money laundering requirements. The register is intended to help authorities and certain regulated businesses identify who ultimately owns or controls legal entities and arrangements.
Across Europe, the regulatory framework continues to develop. The EU’s latest AML framework provides for interconnected beneficial ownership registers and establishes rules governing access to ownership information, including access for authorities and certain parties with a legitimate interest.
For legitimate international businesses and families, this means that the traditional expectation of keeping ownership structures largely private is becoming harder to maintain.
That does not mean that confidentiality has disappeared. Rather, the question is increasingly about who should have access to information, for what purpose, and how securely that information is held.
Privacy remains part of the discussion
The Liechtenstein incident illustrates why this matters. Beneficial ownership information can include names, dates of birth, nationality and country of residence. Even where disclosure is required for legitimate regulatory reasons, this is highly personal information.
For internationally mobile individuals, family offices and business owners, the issue is therefore not simply whether information must be disclosed. It is also whether the underlying ownership and governance structure has been designed appropriately in the first place.
A well-structured arrangement should have a clear commercial or family purpose, properly document ownership and control, and comply with the relevant reporting and AML requirements. Privacy should be considered within those legal boundaries, rather than treated as a reason to avoid transparency.
What should international clients consider?
As disclosure requirements become more extensive, international clients should review their existing structures rather than assume that arrangements established several years ago remain appropriate.
This can include checking beneficial ownership records, reviewing who has authority over companies or trusts, confirming that information held by different advisers is consistent, and understanding what information may need to be disclosed in each relevant jurisdiction.
For families and businesses with interests across the UK, UAE, Europe and other jurisdictions, the position can become particularly complex because different transparency, tax, AML and reporting regimes may apply at the same time.
The direction of regulation is clear: legitimate structures can still provide appropriate governance and confidentiality, but they need to operate within a much more transparent environment.
WTA International can assist clients in reviewing their international structures, governance and fiduciary arrangements, helping to ensure that they remain commercially appropriate, properly documented and compliant with the transparency and reporting requirements that apply to them.
