UBO & legal ownership structure

The Ministry of Finance of Ukraine has finally adopted the forms for the ownership structure. This means that starting from July 11, 2021, the documents on the UBO (Ultimate Beneficial Owner) and legal ownership structure will have to be submitted when registering a new business entity.

Starting from July 11, 2021, a 3-month period (basically for directors/managers of existing legal entities registered prior to April 28, 2020) for submitting the first ownership structure reports starts.

What Documents Are Required?

For individuals –founders (who are the UBO): certified copies of passports are required (where such persons are not citizens of Ukraine, the respective personal document with a translation is required).

For legal entities – founders: a certified extract from the business registry shall be submitted.
In the case of a chain of owners, official documents confirming the structure and the grounds for exercising control (influence) are also required.

Direct and Indirect Control

When a legal entity is established directly by an individual, and the individual owns 25% or more shares, there occurs direct control over the legal entity. In this case, it is easy to track the connection.

When it comes to the cases where the UBO is identified through a number of other legal entities, it is necessary to provide the documents that can prove that such UBO has de jure and de facto control over each legal entity in the chain.

First Steps

Within the period from July 11 – October 11, 2021, all legal entities are required to submit the documents to confirm/update their current ownership structure.

Directors/managers of legal entities will also need to provide the respective official documents. For individuals in the ownership structure: a copy of their passport, certified by a notary is required. For foreign nationals, a translation shall be provided as well.

For legal entities: extracts from business registries, other official documents proving ownership are required (documents issued abroad should be apostilled or legalized by a consulate, depending on international requirements).

When to Update?

Starting from January 01, 2022, heads of legal entities will be obliged to keep the information about the UBO and the ownership structure updated. The obligation consists of 2 parts:

1) annual reporting (within 14 days of the registration date) AND

2) in case of any changes to the structures or information about the UBO, the head of the legal entity will have 30 business days to update the information in the State Register of Legal Entities of Ukraine.

Liability

The Code of Ukraine on administrative offences provides for a fine (UAH 17,000 – 21,000) in case of failure to submit or untimely filing the information about the UBO/ownership structure. This fine is imposed on the heads of legal entities in Ukraine.