An Estonian company’s management board must notify the Commercial Register of its ultimate beneficial owners (UBOs) within 30 days of any change and every time they submit an annual report. UBOs can be declared either through a notary or by the management board members themselves via electronic company portal. Failure to do so may carry a fine of EUR 32,000 to the company and EUR 1,200 for each management board member.
A UBO is a physical person who owns the final parent company and who holds at least a 25 percent plus one share shareholding, or an ownership interest of more than 25 percent either directly or indirectly.
Under the amended instructions of 21 February 2020, if it is not possible to identify UBOs either in the Estonian or the foreign parent company (ie listed companies), companies must declare the members of the controlling company’s governing body as the UBOs. Estonian subsidiaries that previously listed the members of the Estonian company’s governing body as UBOs must now declare the members of the parent company’s governing body as UBOs (unless a physical person holds more than 25% ownership). If the governing body has more than 4 members, declaring only the chairman of the board as the UBO is acceptable.
If someone is declared as the beneficial owner due to their position, it does not mean that they receive monetary income from the company or that the company operates in their personal interests. The declaration is simply a disclosure requirement for making the business environment more transparent.
