Estonia: Fine can reach up to EUR 32,000 for legal entities

In Estonia, the obligation to collect and disclose data about ultimate beneficial owners (UBOs) came into force on 1 September 2018. In accordance with the changes in the Money Laundering and Terrorist Financing Prevention Act, all legal entities, with some exceptions, must disclose information about their beneficial owners to the Commercial Register.

Definition of ultimate beneficial owners

An UBO is a natural person who, taking advantage of their influence, carries out 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, act, action, operation or step is carried out.

In the case of companies, the UBO is the natural person who ultimately owns or controls a legal entity 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 means that a natural person has 25% plus one share or an ownership interest of more than 25% in a company.
Indirect ownership means that a company under the control of a natural person holds, or multiple companies that are under the control of the same natural person hold, a shareholding of 25% plus one share or an ownership interest of more than 25% in a company.

What information needs to be disclosed?

A company must register the following information on their UBOs in the Commercial Register:

• the person’s name, ID code and country of the ID code, the date and place of birth if there is no ID code, and country of residence;
• information on the manner in which the person exercises control.

A foundation must also submit the list of beneficiaries, which includes each beneficiary’s name, ID code and country of the ID code, the date and place of birth if there is no ID code, and country of residence if such persons are specified by name in the articles of association of the foundation.

The following are not obliged to submit information about their UBOs:

• apartment associations and building associations;
• companies listed on the regulated market to which disclosure rules complying with European Union law or similar international standards are applied;
• foundations where the goal of their economic activities is safekeeping or collecting assets in the interests of the beneficiaries or group of persons specified in the articles of association and that has no other economic activity;
• branches of non-resident companies, since the branch is not a legal entity and the disclosure and reporting of the UBO is managed by the headquarters of the company in its home jurisdiction.

Access to the information regarding UBOs and penalties for breaches

The information on UBOs of Estonian companies is publicly available at the website of the Estonian Commercial Register.  
Failure to submit information on the beneficial owner, to notify changes in data or intentionally submit false data is publishable by a fine. The fine can be up to EUR 1,200 for natural persons and up to EUR 32,000 for legal entities.