Law No. 89/2017 of 21 August, which approved the Legal Regime of the Central Registry of Beneficial Owners (hereinafter “RCBE”) has entered into force on 19 November. This new regime establishes the creation of a Central Registry of Beneficial Owners managed by the Registry and Notary Institute, which will include the identification elements of the individuals who hold the ownership or effective control of a company or a similar entity, directly or through a third party.
Notwithstanding the lack of regulation of this new law and the non-existence of the RCBE platform, the entry into force of this law imposes some obligations on the entities covered, so we note the following:
Entities covered by the RCBE:
- Associations, cooperatives, foundations, civil and commercial companies, as well as any other personalized collective entities, subject to Portuguese law or foreign law, that carry out an activity or practice a legal act or business in the national territory that determines the obtaining or having a tax identification number in Portugal;
- Representations of international legal entities of foreign law that are active in Portugal;
- Other entities that are not endowed with legal personality, pursuing their own objectives and activities different from those of their parent entities;
- Fiduciary management instruments registered in the Madeira Free Trade Zone (trusts);
- External financial branches registered in the Madeira Free Trade Zone;
- Trust funds and other collective interest’s centers without legal personality, having a similar structure or functions, when they do not fit into the previous definitions, when certain circumstances are verified.
In respect of the obligations imposed, we highlight the following:
- Identify the beneficial owners in the incorporation documents of companies or other entities covered by the RCBE;
- Institute and maintain an internal register, through a process in which the company must notify the shareholders to communicate the beneficial owner of its shares, and the company must include this information in its internal register, which must keep up to date.
- The non-compliance of this duty by the shareholders allows the amortization of their respective shares.
- The non-compliance by the company to fulfill this duty shall constitute a misdemeanor punishable by law with a fine of EUR 1000 to EUR 50 000.
- Proceed with the declaration of the beneficial owner, a statement that must be delivered by the entities covered by RCBE, completing and submitting a form to be defined by the upcoming regulations on this matter.
- Non-compliance with this declarative obligation block the practice of certain acts by the Company, in which the distribution of profits and participation in public tenders stand out.
- Present the list of the company’s shareholders, duly identified, at the time of each amendment to the bylaws, on the commercial register.
We also recall that the concept of beneficial owner is defined by Law 83/20017, of August 18th, according to which it corresponds to the individuals who ultimately own or control the entity and / or the person or individuals on whose behalf an occasional transaction or business relationship with the entities covered is carried out, in accordance with the criteria established in the above mentioned legislation.
Note also that this lack of regulation of this new platform does not affect the obligations already established by law, so that the competent entities may request information regarding the beneficial owner since the entry into force of this new law, on November 19th of 2017.