The ultimate beneficial owners of the company in Estonia
Companies in Estonia shall be obliged to report to the commercial register about the ultimate beneficial owners of a company. As a result of the amendments to the Money Laundering and Terrorist Financing Prevention Act, companies have to submit information from the Commercial Register Information System as of 1 January 2019 to the ultimate beneficiary of a legal entity.
The ultimate beneficial owner (UBO) is, for the purposes of the new law, a natural person who owns and exercises his or her authority over another person for whose benefit or account the action is performed. As of 2019, companies are required to submit the actual beneficiary's name, date of birth, country of residence and data on their controlling position to the Estonian Commercial Register. The same information is also required by non-profit associations and foundations, for which the members of the management board are considered to be ultimate beneficial owners. The purpose of the regulation is to increase the transparency of business operations and identify potential criminals behind the companies.
The data shall be publicly available after the entry into the commercial register. The disclosure of the actual beneficiary can be restricted if it will increase the risk of a criminal offense (such as a scam) against the beneficiary. The Police and Border Guard Board may request the restriction of disclosure of the beneficiary's data if the beneficiary is a minor or a person with limited legal capacity. The data will be deleted from the register after five years after the company has been liquidated.
If a legal entity fails to provide information on the ultimate beneficiary, it may, under law, be liable to a fine of up to EUR 32 000. If the data concealed by an employee of a company obliged to provide information to the contact person or the responsible member of the management board, he/she may be fined up to EUR 1200 for a misdemeanour. The aforementioned misdemeanours are handled by the Financial Supervision Authority and the Police and Border Guard.
Should you have any questions about company obligation or ultimate beneficial owners in Estonia, Latvia or Lithuania, please do not hesitate to contact our English speaking lawyers at info@gencs.eu.
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