1 September 2018 the amendment to Money Laundering and Terrorist Financing Prevention Act (“the Act”) that establishes publicly available registers of beneficial owners in Estonia has entered into force.
In accordance with Section 9 of the Act the beneficial owner of the Estonian company is deemed to be a natural person who:
1. Directly or indirectly holds more than 25 % of ownership rights, shares or voting rights of the company.
2. Controls the company by other means, including by holding the position of a senior managing official.
Regarding unincorporated legal forms, such as trusts, civil law partnerships, community or legal arrangements, the beneficial owner of such structures is deemed to be the following natural person:
- Settlor or person who has handed over property to the asset pool.
- Trustee or manager or possessor of the property.
- Person ensuring and controlling the preservation of property, where such person has been appointed.
- Persons in whose main interest the structure is set up or operates.
Members or shareholders of Estonian companies must identify the beneficial owners and provide the directors with the details of beneficial owners for purposes of establishing the registers. Directors are also responsible for keeping of registers.
The registers must contain the following data of 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).
- The country of residence.
- Nature of the beneficial interest held.
If the company is incorporated after 1 September 2018 the registers of beneficial owners must be submitted to the Commercial register of Estonia in electronic form together with the application form. In case of changes of beneficial owners’ data the company must submit updated registers not later than in 30 days after being aware of the changes in the data.
It is important that the information from registers of beneficial owners will be publicly available and will be published on a website of Commercial register. Such information is deleted automatically after 5 years from the date of deleting the legal entity from the register.
All companies and unincorporated structures existing before the entry into force of the amendments to the Act must submit the registers of beneficial owners not later than in 60 days after 1 September 2018. The failure of the company to carry out the obligation to identify its beneficial owners may lead to a fine in the amount of 400 000 Euro imposed on a legal entity itself.