Disclosing of beneficial owners
Siim Mägi, Partner / Lawyer
As of the 1st of September 2018, all Estonian companies, non-profit associations and foundations are required to disclose information about their beneficial owners to the commercial register.
Under the Money Laundering and Terrorist Financing Prevention Act (MLTFPA), in the case of companies, a beneficial owner is the natural person who ultimately owns or controls a legal person through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that person, including through bearer shareholdings, or through control via other means.
Direct ownership is a manner of exercising control whereby a natural person holds a shareholding of 25 per cent plus one share or an ownership interest of more than 25 per cent in a company.
Indirect ownership is a manner of exercising control whereby a company which is under the control of a natural person holds or multiple companies which are under the control of the same natural person hold a shareholding of 25 per cent plus one share or an ownership interest of more than 25 per cent in a company.
According to article 77 of MLTFPA, general partnerships, limited partnerships, private limited companies, public limited companies, commercial associations and non-profit associations are required to submit the following data regarding their beneficial owners:
- the person’s name, personal identification code and the country of the personal identification code (upon absence of a personal identification code, the date and place of birth), and the country of residence;
- nature of the beneficial interest held.
Additionally, foundations are required to submit the list of beneficiaries within the meaning of § 9 of the Foundations Act, which contains each beneficiary’s:
- personal identification code and
- the country of the personal identification code (upon absence of a personal identification code, the date and place of birth), and
- the country of residence, where such persons have been specified in the articles of association of the foundation.
The management board of the company can submit the information to the commercial register through company registration portal and it is also possible to submit this data through notary.
The obligation must be fulfilled by 31st of October 2018. Failure to submit data of the beneficial owner or submission of false information could result in a fine of up to 32,000 euros.