Communication of the shareholder and beneficial owner of entities at the Central Bank of Uruguay
14 August, 2017
New regulation requires that companies operating in Uruguay register the name of their shareholders and beneficiary owners with a non-public registry at Uruguay’s Central Bank. The deadline is June 30, 2018 for nominative share companies, and September 30, 2017 for bearer shares.
On 21st July, the Central Bank of Uruguay issued norm number 133/2017, related to chapter II of the Tax Transparency Law (Spanish acronym: “LTF”) #19,484, regarding the identification of ultimate beneficiaries and holders of nominative shares of companies, and Decree No. 166/2017.
The LTF establishes that from 1st January 2017 onwards, resident and certain non-resident entities must identify the ultimate beneficiaries, keep documents which reliably prove so, and communicate the foregoing to the Register at the Central Bank of Uruguay (Spanish acronym: “BCU”).
Companies with bearer shares have already communicated the name of their shareholders to the Registry. With the new norm, the ultimate beneficiaries must be informed as well. Companies with nominative shares must proceed to identify the shareholder and the ultimate beneficiary.
Which entities are required to inform their shareholders and ultimate beneficiaries to the BCU?
The regulatory decree lists the following entities:
a) Corporations; b) limited partnerships by shares; c) agricultural companies and associations regulated by Law N° 17,777, dated on 21st May 2004; d) trusts and investment funds; e) limited liability companies; f) de facto partnerships; g) partnerships; h) limited partnerships; i) “sociedades de capital e industria” (limited partnerships with industrial purposes); j) cooperatives; k) foundations; l) economic interest groups; m) civil corporations and associations; n) in general, any other entity covered by the provisions of article 23 of Law Nº 19,484, dated on 5th January 2017.
Non-resident entities: Entities which meet any of the following conditions:
a) Acting in the national territory through a Permanent Establishment. b) Establishing in Uruguay their effective registered offices for the development of business activities in the country or abroad. c) Holding assets located in the national territory for a value greater than 2,500,000 IU (approximately US$ 300,000); according to the asset valuation rules applicable in IRAE (Spanish acronym which stands for Income Tax on Economic Activities).
Beneficiaries of foreign investment funds and trusts whose managers or fiduciaries are residents in the national territory are also included.
Resident entities in liquidation: For the case of entities which are in liquidation, except for the entities dissolved by operation of law according to Law No. 19,288, the Decree establishes that the same shall be bound by the provisions of the Law which governs until the entity has not furnished the closure corresponding to the close of business to the National Taxation Office and declared: a) the extinguishment of all the liabilities and allocation of all the assets; b) cancellation or destruction of all stock certificates; c) identity of the liquidator or administrator.
What is to be informed by the entitites?
For the case of entities with bearer shares, their ultimate beneficiaries must be informed. For the case of entities with registered shares their shareholders and ultimate beneficiaries must be informed.
Ultimate Beneficiary is the natural person who, direct or indirectly, holds at least 15% (fifteen percent) of the paid-in capital or its equivalent, or voting rights, or who by other means exercises ultimate control over an entity, whether it is a legal person, a trust, an investment fund or any other equity of impairment or legal structure. For the case of trusts, the information connected with the trustor, trustee and beneficiary.
The communication is made through two forms issued by the BCU. "Form A," whereby the interested party sends the information to the entity and "Form B,” whereby an agent of the entity informs the Register. The communication mechanism is similar to the one existing at present, a Notary Public with digital signature registered with BCU is responsible for submitting Form B.
Ultimate beneficiaries directly controlling the entity must inform as follows: name of the individual holding the shares, marital status with identification of the spouse and specification of the property regime, domicile, and, if applicable, fiscal domicile and domicile for service of notices registered with the National Taxation Office, nationality, and, if applicable, number of identity card issued by the National Office of Civil Identification, identification number issued by the National Roll of Taxpayers (Spanish acronym: RUT) of the National Taxation Office, or fiscal identification number issued by other State.
Ultimate beneficiaries indirectly controlling the entity, in addition to the information specified in the previous paragraph, must informa as follows: composition of the chain of ownership, indicating for each legal entity, trust, investment fund, or any other equity of impairment or legal structure, for the case of legal entities or other: corporate name and trade name of the legal entity or body, date and place of incorporation, domicile, head office, fiscal domicile and domicile for service of notices registered with the fiscal body, identification number issued by the National Roll of Taxpayers (Spanish acronym: RUT) of the National Taxation Office, or fiscal identification number issued by other State, as the case may be.
In both circumstances it must be stated if the ultimate beneficiary is resident or non-resident. In connection with the information regarding the paid-in capital or its equivalent, voting rights, or other control means, the following must be informed: Percentage of those who are ultimate beneficiaries; Percentage of those who are not ultimate beneficiaries; Percentage of those who do not know the ultimate beneficiary; Percentage of paid-in capital or its equivalent which holders are entities listing at the Uruguayan stock market, listing at renowned international stock markets or other public offer procedures, as long as such certificates are immediately available for their sale at the above mentioned markets.
Deadlines for submitting information to BCU.
Entities with bearer shares must inform before 30th September 2017 (they may send the communication from 1st August 2017).
The remaining entities must inform before 30th June 2018 (they may send the communication from 1st May 2018).
Entities incorporated from 1st January 2017 have a 30-day term from their incorporation to send the communication to the BCU.
Any amendment of the data contained in the statement must be communicated within 30 days of its occurrence for the case of residents, or within 90 days of its occurence for the case that ultimate beneficiaries or holders of nominative equity shares are non-resident. The communication shall not be sent when there are changes in the face value of capital not modifying the interest percentage of holders or the control of ultimate beneficiaries.
Entities excluded from identifying the ultimate beneficiary.
- Entities which stock certificates are direct or indirectly owned by companies listing at the Uruguayan stock market, listing at renowned international stock markets or other public offer procedures, as long as such certificates are immediately available for their sale or acquisition at the above mentioned markets.
- Investment funds and trusts set up abroad, registered with and supervised by the comptrolling body in their country of residence, which beneficiaries are companies listing at renowned international stock markets and, otherwise, as long as there is an obligation to identify their ultimate beneficiary according to the rules of such country and there are effective mutual administrative assistance instruments in force for the exchange of information.
- Co-ownerships, joint ownership of property between the spouses and community property regulated by Law No. 18,246 (civil union).
- Entities which stock certificates are quoted on the Uruguayan stock market, on renowned international stock markets or other public offer procedures, as long as such certificates are immediately available for their sale or acquisition at the above mentioned markets.
- Entities dissolved by operation of law according to the provisions of Act N° 19,288
- Non-resident entities which assets solely consist of: i) equity shares in resident entities; ii) credits for imports of goods, cash in advance, dividends or profits to be collected, personal, material and financial services to be collected, leases, commissions and advance payments to be collected; iii) loans or investments, including securities, bonds and other debt instruments of any nature whatsoever, and their return to be collected.
- Civil associations having income, of any nature whatsoever, at the end of the fiscal year, below 4,000,000 indexed units of account, or assets for a value below 2,500.000 indexed units of account, valued according to the rules of the Income Tax on Economic Activities.
- Trusts and investment funds supervised by the Central Bank of Uruguay.
Entities exempted from informing BCU.
The following entities must comply with the obligation of identifying ultimate beneficiaries, keeping records of the information that may be requested at any time by the bodies entitled to access to the Register or National Internal Audit, but are not bound to submit the affidavit to BCU. They are: • General partnerships and agricultural companies and associations regulated by Law N° 17,777, which the entirety of their shares belong to individuals, as long as such individuals are the ultimate beneficiaries. General partnerships shall be partnerships, limited partnerships, “sociedades de capital e industria” (limited partnerships with industrial purposes), limited liability companies and limited partnerships by shares with respect to the limited partner. • De facto partnerships and civil corporations solely composed of individuals who are the beneficial owners. • Cooperatives solely composed of individuals, as long as they are the beneficial owners.