How to declare your company’s beneficial owner and avoid fines
How to declare your company’s beneficial owner and avoid fines
If you do business in Estonia, you will have received a reminder by the Ministry of Finance on around 18 October telling you to declare your organisation’s beneficial owner. If you ignored it, go back to it: otherwise you might be looking at fines of up to €400,000.
Fines of up to €400,000 for companies
The beneficial owner of a company is the person who ultimately exercises control over a certain critical interest in the company. A company needs to declare their beneficial owners, as this is required in Estonia’s Money Laundering and Terrorist Financing Prevention Act.
The title of this particular law says it all: the state wants to know who is pulling the levers to keep those issues in check.
Since 1 September, the state requires businesses to collect and keep information on their beneficial owners. Your official deadline to hand in the required information is 30 October.
If this information is not collected and kept at all, you may face fines of up to €400,000 depending on your case.
Companies that have this information but fail to declare it may be subject to fines of up to €32,000 starting from January 2019.
Who is the beneficial owner?
In the case of a business, a beneficial owner is anyone who directly or indirectly holds an ownership interest of more than 25% (eg a 25% stake plus one share). They are necessarily and always a natural person, so we are talking about giving the state the name of one or several individuals here.
The means by which these individuals exercise their control don’t matter: this may be through ownership of a stake in the business, through bearer shares, voting rights, and so on.
What you need to submit
Declaring a beneficial owner, this is the information you are expected to submit:
1. The person’s name, personal identification code, the country of the personal identification code (in absence of a personal identification code, the date and place of birth) and the country of residence.
2. The nature of the beneficial interest held.
How to tell the state who the beneficial owner is
You can submit this information digitally through the commercial register http://www.rik.ee/et/ettevotjaportaal. If you are not an Estonian resident or e-resident and don’t have a personal identification code, you can also submit it with the help of a notary public.
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If you have any questions at all regarding this issue, or about the prevention of money laundering risks, Advocate Artur Sanglepp at Glikman Alvin LEVIN is happy to help. You can call him at +372 686 0000 or write him an email artur.sanglepp@levinlaw.ee