Who is the beneficial owner?
The beneficial owner is a natural person who owns and exercises his or her authority over another person for whose benefit or account the action is performed. 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.
The company must provide the following information about the beneficial owners:
1. the person’s name, personal identification code, the country, that issued the personal identification code (upon absence of a personal identification code, the date and place of birth, the country of residence).
2. details of the way the control is carried out.
The data can be submitted through the Estonian Commercial Register or through a notary.
The data shall be publicly available after the entry into the Commercial Register.
When the data on the beneficial owner changes or is incorrect, the company’s management board must correct the data within 30 days. However, if the data does not change during the financial year, the management board confirms the accuracy of the data when submitting the annual report.
This means that companies must document and retain the data of the beneficial owners, as well as the details of all the procedures they have done to identify the beneficial owners.
Companies registered in the Commercial Register must provide data on beneficial owners by 31 October 2018 at the latest.
The beneficial owners of the companies established after August 31, 2018 must be submitted together with the application for entry in the Commercial Register.
Failure to comply with new requirements (non-submission of data or submission of false information) results in a fine. The fines are up to 300 fine units for a natural person and up to 32 000 euro for a legal entity. The payment of a fine does not exempt from the obligation.
The requirement does not apply to apartment associations, building associations, listed companies and foundations, whose business activities are aimed at holding or collecting assets for the benefit of a group of beneficiaries or persons specified in the articles of association, and who have no other economic activity.
In case of further questions, please contact attorney-at-law Valter Võhma by e-mail email@example.com.