Know Your Beneficiary

On April 28, 2020, the new law ‘On Prevention and Counteraction of Legalization (Laundering) of Proceeds of Crime, Financing of Terrorism and Financing of Distribution of Weapons of Mass Destruction’ comes into effect and changes life for business entities in Ukraine.

Starting from April 28, 2020, there will be a harsher oversight regarding the efficiency of the structure of business entities in Ukraine.

Ukrainian companies will have to annually update the information about the ownership structure. The form of the document is yet to be approved. As of the moment it is announced, all legal entities in Ukraine, registered before this law came into effect will have 3 months to submit the first report on the beneficiary structure.

It will turn out the more difficult task for those legal entities, which have non-residents in their structure – now it will be required to provide an up-to-date extract from the business registry and copies of passports of the beneficiaries, certified by a notary (with the required apostille, where applicable, and translation into Ukrainian as well).

The next obligation imposed over the legal entities is to annually update information on the beneficiaries in the State Registry. To comply with this requirement, the Ukrainian company will have to submit the application, ownership structure and documents of the owners to the State Registrar (up-to-date extract from the business registry and copies of passports of the beneficiaries, verified by a notary). These documents have to be submitted within 14 calendar days as of the date of the legal entity’s registration.
In case of changes in the structure/information of the ownership, the Ukrainian legal entity will have 30 business days to submit the report to the respective State Registrar and amend the information.

The procedure of the state registration of new legal entities will be amended as well. Confirmation of the ownership structure and the copies of passports of the beneficiaries, certified by a notary are added to the list of the documents that must be submitted to complete the state registration of legal entity.

In case the company fails to comply with the requirements of the new law (failure to submit the report or fit the terms established by the law) a fine will be imposed on the Director or another responsible authority (17 000 – 51 000 UAH).

Our corporate law and business administration team will be glad to help you and your business to comply with the new requirements.