Ultimate Beneficial Owner: The New Corporate Transparency Requirement That Will Transform Businesses in Honduras

Corporate transparency is no longer a topic reserved exclusively for financial institutions or large multinational corporations. Today, it has become one of the fundamental pillars in the fight against money laundering, terrorist financing, corruption, and other financial crimes.

As part of this global trend, Honduras has enacted the Transparency and Centralized Register of Ultimate Beneficial Owners Law (Decree No. 127-2026). This new legislation introduces important reporting and identification obligations for legal entities and legal arrangements operating in the country. The law establishes the Centralized Register of Ultimate Beneficial Owners (RCBF), administered by the National Banking and Insurance Commission (CNBS), with the purpose of identifying the natural persons who ultimately own or exercise effective control over legal entities.

But what does this law really mean for businesses? Why has this obligation been introduced? And what steps should organizations begin taking today?

What Is an Ultimate Beneficial Owner (UBO)?

The term Ultimate Beneficial Owner (UBO) refers to the natural person who ultimately owns or controls a company or legal arrangement, regardless of who appears as the registered shareholder or legal representative.

According to the Financial Action Task Force (FATF), an Ultimate Beneficial Owner is the natural person who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is conducted. It also includes individuals who exercise ultimate effective control over a legal person or legal arrangement. The purpose of this concept is to identify the individuals who truly stand behind a business structure, preventing the misuse of complex corporate structures to conceal ownership.

In practice, the registered shareholder is not always the individual who actually controls a company. Corporate groups, holding companies, trusts, and layered ownership structures often make it difficult to identify the real owner. This is precisely why Ultimate Beneficial Ownership registers have become an essential regulatory tool.

Why Are Countries Establishing UBO Registers?

For many years, criminals have exploited opaque corporate structures to hide assets derived from money laundering, corruption, tax fraud, and other illicit activities.

In many cases, one company located in a particular jurisdiction owns another company in a different country, which in turn is owned by yet another entity established in an offshore jurisdiction with limited ownership disclosure requirements. These complex ownership chains have made it extremely difficult for authorities to identify the individuals who truly control corporate assets.

In response, the Financial Action Task Force (FATF) strengthened its international standards by revising Recommendation 24, requiring countries to ensure that competent authorities have timely access to accurate, adequate, and up-to-date information on the beneficial ownership of legal persons.

Today, beneficial ownership transparency is recognized worldwide as one of the most effective mechanisms for combating financial crime and strengthening market integrity.

Central America Is Advancing Toward Greater Transparency

The regulation of Ultimate Beneficial Ownership is not unique to Honduras. Over the past several years, multiple Central American countries have established specialized UBO registers to comply with international standards.

Costa Rica implemented its Transparency and Beneficial Ownership Register under the Ministry of Finance. Nicaragua established its Beneficial Ownership Register for Commercial Companies in 2021. Panama created the Private and Sole System of Ultimate Beneficial Owners under the supervision of the Superintendency of Non-Financial Subjects, imposing specific obligations on attorneys and resident agents. Guatemala continues developing legislative reforms in this area, while El Salvador addresses beneficial ownership identification through its Anti-Money Laundering regulations.

Honduras now joins this regional movement toward stronger corporate transparency and international regulatory alignment.

Honduras' New Transparency and Centralized Register of Ultimate Beneficial Owners Law

The purpose of the new legislation is to promote transparency in identifying Ultimate Beneficial Owners through the creation of the Centralized Register of Ultimate Beneficial Owners (RCBF). Additionally, the law seeks to strengthen measures aimed at preventing money laundering, terrorist financing, proliferation financing, corruption, and organized crime.

The Register will be administered by the National Banking and Insurance Commission (CNBS), which will be responsible for establishing the technological and operational framework governing the submission, management, protection, and confidentiality of the information reported by obligated entities.

Who Must Register?

The law has a broad scope and applies to various legal entities, including:

• Honduran commercial companies.

• Foreign companies registered to operate in Honduras.

• Trusts.

• Investment funds.

• Legal arrangements with or without legal personality.

• Public-private entities in which the State does not hold 100% ownership.

This means the obligation extends well beyond traditional corporations and includes a wide range of legal vehicles commonly used to hold or manage assets.

How Is the Ultimate Beneficial Owner Determined?

One of the law's most significant aspects is the establishment of clear legal criteria for identifying the Ultimate Beneficial Owner.

First, any natural person who directly or indirectly owns 25% or more of the company's capital or assets must be identified as a UBO.

Where ownership alone does not reveal the UBO, organizations must determine whether an individual exercises effective control, including through:

• The authority to appoint or remove directors or senior management.

• Decision-making power over financial, operational, or commercial matters.

• Any other means of exercising significant influence over the organization.

If no individual can be identified under either ownership or control criteria, the law requires the registration of the senior managing official, provided that the organization documents the reasons why no Ultimate Beneficial Owner could be identified through ownership or effective control.

This approach is consistent with FATF standards and reflects international best practices adopted by many jurisdictions worldwide.

New Compliance Obligations for Companies

Beyond the initial registration, the law imposes ongoing compliance obligations on legal entities and legal arrangements.

These obligations include:

• Registering with the Centralized Register of Ultimate Beneficial Owners.

• Identifying and verifying Ultimate Beneficial Owners.

• Maintaining accurate and up-to-date ownership information.

• Reporting any changes in ownership or control within the prescribed deadlines.

• Retaining supporting corporate documentation.

For many organizations, compliance will require reviewing corporate structures, updating governance records, and implementing internal procedures to ensure that ownership information remains accurate at all times.

More Than a Registry: A New Corporate Governance Standard

Although many businesses may initially view this legislation as another regulatory filing requirement, its impact extends far beyond registration.

Beneficial ownership information is becoming increasingly important in:

• Customer and investor due diligence.

• Banking relationships.

• Mergers and acquisitions.

• Public procurement.

• Corporate compliance programs.

• Anti-money laundering (AML) frameworks.

• Risk management processes.

Organizations with transparent ownership structures, well-maintained corporate documentation, and strong governance practices will be better positioned to comply with these evolving regulatory expectations.

Preparing Today Will Reduce Tomorrow's Risks

Although the operational details will depend on the regulations to be issued by the CNBS, companies should not wait until the implementation deadline to begin preparing.

Organizations are encouraged to:

• Review their ownership and control structures.

• Identify their Ultimate Beneficial Owners under the new legal criteria.

• Analyze indirect ownership chains.

• Update corporate documentation.

• Develop internal procedures for maintaining accurate ownership information.

• Train directors, executives, legal advisors, compliance officers, and corporate secretaries on the new requirements.

Corporate transparency has become an essential component of sound corporate governance. Beyond legal compliance, maintaining accurate beneficial ownership information strengthens the confidence of investors, financial institutions, regulators, and business partners.

Honduras' new Transparency and Centralized Register of Ultimate Beneficial Owners Law represents a significant milestone in aligning the country's regulatory framework with international transparency standards. For businesses, the greatest challenge will not simply be registering with the new system, but implementing governance processes capable of identifying, verifying, documenting, and continuously updating Ultimate Beneficial Ownership information. Organizations that begin preparing now will be better positioned to comply with the law, reduce legal and reputational risks, and demonstrate a strong commitment to transparency and corporate compliance.

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For more information on how this innovation may affect your operation or investment in Honduras, the Galindo & Asociados team   the Galindo & Asociados team is at your disposal.

Telma Enamorado

Socio de Compliance & Riesgo

telma@galindoyasociados.com

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