Thai SME-GP UBO (Ultimate Beneficial Ownership Verification)

Overview

The project to verify linkages between THAI SME-GP registrants and large enterprises develops tools, mechanisms and processes to verify governance or ultimate beneficial ownership (UBO: Ultimate Beneficial Ownership) linkages between THAI SME-GP registrants and large enterprises. The aim is to create business opportunities in government procurement for SME operators and make sure they reach the intended target group.

At its core is a verification framework that detects UBO linkages between THAI SME-GP registrants and large enterprises. It protects the integrity of government SME procurement by identifying hidden corporate relationships through ownership percentage traversal, transfer pricing criteria and management control analysis.

Scope of Work (5 Work Groups)

1. Data Preparation & Partitioning: preparing the database and grouping juristic-person data
2. Verification Processing: verifying ownership and authorized persons, including designing the conceptual framework and running the UBO process
3. Batch channel development for existing registrants
4. API channel development for new registrants
5. Database of verification results and linkage analysis results

Verification Framework

Two Main Dimensions + Any-Match Principle

Principle: “If any one condition is met → the SME is presumed to be linked to a large company”

Condition	Criterion	Dimension
Shared UBO	The UBO (≥ 25%) is the same person	1.1
Direct shareholding	≥ 50% under Transfer Pricing	1.2
Indirect shareholding	Product of ownership shares ≥ 50% across every tier	1.2
Common directors	1 in 3 of the directors are the same people	2

Dimension 1.1: Shared UBO with a Large Company

Based on the Anti-Money Laundering Office (AMLO) guidelines on verifying ultimate beneficial owners (UBO ≥ 25%):

1. An individual shareholder holding ≥ 25% → is a UBO immediately
2. A shareholder that is a juristic person → check it and trace up the ownership structure
3. Trace through the tiers until reaching the topmost individual holding ≥ 25% → UBO
4. Compare the SME’s UBOs with the large company’s UBOs → if they are the same person = linked

Effective Ownership formula (for complex structures):

BOk = (I - C)^-1 P[:, k]

where I = identity matrix, C = inter-company shareholding matrix, P = matrix of shareholdings held by individuals

Dimension 1.2: Transfer Pricing (Revenue Department)

Based on the Revenue Department’s definition of related-party groups for Transfer Pricing. An 11-step process runs from screening juristic persons with revenue of ≥ 200 million baht through to filtering Intersectional relationships of ≥ 50%.

Dimension 2: Management Control

Compares the list of directors/authorized signatories of the SME with that of the large company. If 1 in 3 are the same people → linked.

Data Overview

Input data from the THAI SME-GP system:

• Business data: 186,931 businesses
• Shareholder data: 47,849 entities / 174,901 records
• Financial statement data: 97,390 records

Data quality: Of 108,099 businesses in total, 101,360 (93.8%) have a complete 13-digit registration number.

Key Deliverables

1. Database preparation and grouping of juristic-person data
2. UBO verification processing according to the criteria, methods and definitions
3. Development of a Batch File channel for existing registrants
4. API development + database of verification results

Analytical Reports / Charts

Related Projects

• Thai SME-GP: the core system
• SME-GP Phase 6