30.08.2018

From 1 September 2018 all companies registered in Estonia are obligated to disclose data on their beneficial owner in the commercial register. Data must be submitted by 31 October 2018.

Until now only credit and financing institutions, notaries and other obliged entities were obligated to disclose their beneficial owners upon the establishment of a business relationship or the making of transactions. However, the provisions of the Money Laundering and Terrorist Financing Prevention Act which enter into force as of 1.09.2018 place the obligation to disclose their beneficial owners via the commercial register to all legal persons governed by private law. To enable the performance of this duty, the shareholders or members of a private legal person must provide the management board of the legal person with the information about the beneficial owner and then the management board shall submit this data via the Company Registration Portal. 

Who is the beneficial owner?

For the purposes of the Money Laundering and Terrorist Financing Prevention Act, ‘beneficial owner’ means a natural person who, taking advantage of their influence, makes a transaction, act, action, operation or step or otherwise exercises control over a transaction, act, action, operation or step or over another person and in whose interests or favour or on whose account a transaction or act, action, operation or step is made. In the case of companies, a beneficial owner is the natural person who ultimately owns or controls a legal person either directly or indirectly. Direct ownership is a manner of exercising control whereby a natural person holds a shareholding 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 or an ownership interest of more than 25 per cent in a company.

Which data must be submitted?

In order to disclose data of the beneficial owner, a person who has the right of representation must enter the Company Registration Portal, click “Beneficial owners undefined” at the opening page and choose person(s) from existing selection or enter the following data on its beneficial owner: (a) the person’s name, (b) personal identification code and the country of the personal identification code (upon absence of a personal identification code, the date and place of birth), (c) the country of residence, and (d) nature of the beneficial interest held. After the persons are added, the data will automatically be reflected in the information system of the commercial register.

When must data be submitted?

Data of the beneficial owner must be submitted to the commercial register by 31 October 2018.

New legal persons must submit the data of the beneficial owner along with the application for registration in the commercial register.

Where the submitted data of the beneficial owner changes, the management board of a company must submit new data within 30 days. Where the data of the beneficial owner has not changed, the management board certifies the correctness of the data upon submission of the annual report.

The penalty for failure to submit the data of the beneficial owner or for failure to report on a change of the data or for knowingly submitting false data is a fine. Additionally, companies are required to register and retain data about all actions made for the purpose of identifying the beneficial owner.

More detailed information is available at the Company Registration Portal (in Estonian)

In case of questions, please contact Rödl & Partner Advokaadibüroo OÜ:

Alice Salumets, P +372 6068 650, E alice.salumets(at)roedl.com