The Hidden Risk of Guest Users in Microsoft Entra ID: How Subscription Creation Opens Doors to Privilege Escalation

In today’s cloud-driven world, identity management is critical for maintaining security across enterprise environments. Microsoft Entra ID (formerly Azure AD) enables organizations to invite guest users for collaboration, often under the assumption that guests have limited, low-risk access. However, a surprising and under-recognized vulnerability in Entra ID’s subscription handling reveals that guest users can create and transfer subscriptions into a tenant while retaining full ownership. This flaw creates a stealthy path for privilege escalation that many security teams may overlook—putting organizations at significant risk of unauthorized access and persistent threats.

Understanding the Guest User Subscription Threat

Microsoft Entra ID allows external users (guests) to be invited into a tenant, where they typically have restricted permissions. However, a critical oversight exists in how Microsoft’s billing permissions operate. Unlike Entra Directory roles or Azure RBAC roles, billing roles govern subscription creation and management at the billing account level—outside the standard directory controls. If a guest user has billing permissions in their home tenant, they can create new subscriptions or transfer existing ones into the external tenant where they are invited as guests.

The process exploits the separation between billing permissions and tenant access controls. Attackers can:

Create an Azure tenant under a free trial to gain billing account ownership.
Compromise a user with billing roles in an existing tenant.
Invite themselves or be invited as guests into a target tenant.
Create or transfer subscriptions directly into the defender’s tenant.
Automatically gain “Owner” rights over these subscriptions, bypassing typical restrictions.

This unauthorized subscription ownership provides guests with unexpected administrative capabilities within the target tenant. For example, they can view sensitive role assignments at the root management group level, weaken or disable critical Azure policies that enforce security standards, and create persistent User-Managed Identities that blend with legitimate service accounts. Attackers may also register devices to abuse conditional access policies, masquerading as trusted corporate assets.

What Undercode Say: Analyzing the Depth of the Threat

This guest subscription attack vector reveals a blind spot in many organizations’ security postures. Security teams typically focus on directory roles and Azure RBAC permissions, but billing roles often go unnoticed because they operate at a different permission scope. The ability for a guest user to spin up or transfer subscriptions introduces a powerful foothold, enabling lateral movement and privilege escalation that bypass traditional controls.

BeyondTrust’s research highlights that this risk is not theoretical—it’s actively exploited in the wild. The federation model that allows guest users to authenticate via their home tenant also means that multifactor authentication and other security policies may not fully apply, further reducing defensive measures.

The ramifications are profound. With subscription ownership, attackers gain visibility into tenant administration they otherwise would not have. They can silence security alerts by modifying Azure policies, making malicious activity harder to detect. User-Managed Identities created by guests persist beyond the lifetime of the guest account and can serve as a backdoor for ongoing access. Device registration abuse can let attackers bypass conditional access policies designed to secure the environment.

Organizations leveraging B2B guest features are often unaware of these risks because traditional threat models do not consider guests creating or owning subscriptions. Additionally, default tenant settings allow guests to invite other guests, which could amplify attack surfaces if compromised accounts are used to introduce malicious guest users with billing privileges.

To mitigate these risks, Microsoft offers Subscription Policies that restrict subscription creation to explicitly authorized users, a crucial step that many organizations need to adopt urgently. Further best practices include auditing guest accounts, limiting guest invitations, continuous subscription monitoring, and leveraging security tools like BeyondTrust Identity Security Insights for automated detection of suspicious guest behaviors.

The bigger picture is clear: identity misconfigurations and overlooked permission boundaries are becoming the new avenues for sophisticated attacks. It’s no longer enough to secure just admin accounts. Every identity—especially guest and billing-related accounts—must be scrutinized and governed rigorously.

Fact Checker Results ✅❌

This analysis is grounded in active security research and confirmed threat observations. The subscription ownership vulnerability for guest users is a verified issue affecting Microsoft Entra ID environments. Mitigation measures recommended by Microsoft are documented and effective when properly implemented. Organizations that fail to audit guest permissions risk exposing themselves to privilege escalation attacks.

Prediction 🔮

As cloud collaboration and B2B guest scenarios continue to grow, the risk from guest-based subscription creation will become a major attack vector in identity security breaches. Organizations that neglect billing role visibility and guest access controls will increasingly face sophisticated intrusions leveraging these hidden paths. The adoption of subscription policy controls and advanced identity monitoring tools will become critical standards for enterprises seeking to defend against stealthy privilege escalation in their cloud environments.

By addressing this overlooked vulnerability today, organizations can close a dangerous backdoor and strengthen their overall identity security posture—turning restless guest accounts from potential threats into tightly governed collaborators.