Beneficial Ownership Transparency : Building Trust and Strengthening Governance in Sri Lanka

Deloitte believes Sri Lanka’s introduction of mandatory Beneficial Ownership (BO) disclosure marks a significant step towards strengthening corporate transparency and aligning with global Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) standards.

While the regulatory shift is timely, the real value of this reform lies not in disclosure itself, but how effectively it is implemented, integrated, and leveraged to drive broader governance and economic outcomes.

Global experience consistently shows that BO frameworks deliver impact only when they evolve beyond compliance requirements and become embedded within a country’s wider financial and digital ecosystem, supporting trust, resilience, and long-term value creation across institutions and markets.

For Sri Lanka, the most relevant lessons emerge not only from advanced jurisdictions such as the United Kingdom and the European Union, but also from regional economies that have navigated similar structural complexities.

India, for instance, has adopted a more proactive approach through its Significant Beneficial Ownership framework, requiring companies to actively identify individuals exercising control rather than relying solely on shareholder declarations of the information reported.

Jurisdictions such as Singapore and Malaysia further demonstrate how structured, technology-enabled systems can support the effective collection and standardisation of BO data.

Their centralised frameworks combine clear regulatory guidance with digital submission processes and system-driven validation, enabling regulators to maintain consistent, up-to-date, and reliable ownership records.

However, Sri Lanka’s beneficial ownership framework differs in certain respects from those adopted in other regional jurisdictions.

For example, in Singapore, company secretaries are generally not obliged to independently verify beneficial ownership information unless they have reason to believe the information submitted is inaccurate.

Similarly, India’s Significant Beneficial Ownership declaration framework does not require assuming responsibility for independently verifying the BO data.

The framework largely relies on disclosures made by shareholders and beneficial owners themselves. In contrast, Sri Lanka’s regulatory framework places a greater degree of independent verification responsibility on directors and company secretaries who submit Beneficial Ownership declarations to the Registrar of Companies on behalf of beneficial owners.

This presents a significant practical challenge, as directors and company secretaries often have to rely primarily on information provided by the beneficial owners themselves, particularly in instances where the Beneficial Owner is a non-resident.

Drawing on the regional best practices, Deloitte is of the view that the extensive beneficial ownership verification obligations placed on directors and company secretaries as presenters of Beneficial Ownership data may not necessarily yield the intended regulatory outcomes.

Instead, greater value could be achieved through enhanced technological integration among key regulatory bodies, including the Department of Registration of Persons (Sri Lanka Unique Digital ID Project), the Inland Revenue Department, the banking system, and the Registrar of Companies, together with the establishment of regional data-sharing partnerships at the national level.

This would enable regulators to strengthen oversight through more accurate, real-time data validation.

In many jurisdictions, Beneficial Ownership disclosure frameworks have evolved significantly over the years, with processes becoming more streamlined and efficient.

For instance, in the United Kingdom, Persons with Significant Control (PSCs) are required to verify their identities directly through the Companies House system.

The framework also enables companies to make appropriate disclosures in situations where PSCs cannot be identified.

Sri Lanka can certainly draw valuable lessons from these international practices in order to establish a balanced framework that strengthens compliance requirements while continuing to support a credible and investment-friendly business environment.

Disna Perera, Director - Corporate Secretarial, Deloitte Sri Lanka, says “Sri Lanka advances this reform, the focus must shift decisively from disclosure to capability.

Ensuring data accuracy through verification, integrating BO information across regulatory systems, adopting a risk-based approach to enforcement, and investing in awareness and institutional capacity will be critical to unlocking its full value.”

Ultimately, the success of Sri Lanka’s BO regime will depend on how it is perceived and operationalised. Jurisdictions that have derived the greatest value from beneficial ownership frameworks are those that have treated them as foundational to transparency, trust, and digital governance.

For Sri Lanka, the opportunity lies in embracing this perspective and translating regulatory reform into tangible gains in governance, enhanced transparency, and long-term economic resilience.

Deloitte continues to support organisations in navigating evolving regulatory requirements, strengthening governance frameworks, and building long-term stakeholder confidence through sustainable and technology-enabled compliance practices.

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