From 1 July 2020, amendments to the Law of the Republic of Latvia “Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing” (hereinafter – the Law) entered into force, which impose a new obligation for foreign companies and organizations that have registered a branch or representative office in Latvia – to reveal beneficial owners.
In accordance with Section 47 and 48 of the Transitional Provisions of the Law, the foreign subjects have an obligation to reveal information on their beneficial owners until 1 January 2021 to the Enterprise Register of the Republic of Latvia. If the foreign subject does not reveal the information until the abovementioned date, the Enterprise Register of the Republic of Latvia shall exclude the branch or representative office of the foreign subject accordingly from the Representation register or Commercial register.
Clause 5, Section 1 of the Law determines that beneficial owner is a natural person who is the owner of the legal person or who controls this natural person or in whose interests business relationship is being established or who in the form of direct or indirect shareholding owns more than 25 per cent of the capital shares or voting stock of the legal person or who directly or indirectly controls it.
In accordance with Clause 4, Section 18.1, Clauses 1 and 7, Section 18.2 of the Law, the foreign subject must provide the Enterprise Register of the Republic of Latvia with the following information regarding the beneficial owners: given name, surname, personal identity number (if there is not one – date of birth, number of the personal identification document and date of issue thereof, country and body issuing the document), nationality, country of residence, as well as the manner of exercising control over the legal person or foreign subject, including by indicating the given name, surname, personal identity number (if there is not – date of birth) of a shareholder (stockholder), member or owner through which the control is exercised, but, if it is a legal person – the firm name, registration number, and registered address, as well as the documentary justification of the control exercised.
Based on Clause 1, Section 18.2 of the Law, the Register of Enterprises is authorized to request additional documents that substantiate the veracity of the specified information.
Documents issued in the territory of third countries, as well as copies of original documents produced in the territory of third countries, must be certified by an apostille (if these countries are signatories to the Hague Convention) or legalized (if these countries are not signatories to the Hague Convention).
If different documents are used to identify a person in the territory of the beneficial owner’s residence and in the territory of the Republic of Latvia (for example, in some countries a separate travel passport is issued to a citizen), the above-mentioned information must be provided from the document certifying the identity of the beneficial owner in the territory of Latvia (travel passport).
The law office Inlatplus has extensive experience in registering various information in the Enterprise Register of the Republic of Latvia and we are ready to provide the necessary legal assistance in registering the beneficial owners in the Enterprise Register of the Republic of Latvia.