BlogLegal ResourcesEverything You Need to Know About Recent Legal Amendments: The Register of Ultimate Beneficial Owners

March 5, 20220

 

On January 27, 2022, the Assembly of the Republic of Albania passed the Law no. 6/2022 “On some amendments and additions to Law no. 112/2020 “On the register of ultimate beneficial owners” as amended’, which amends the existing law no. 112/2020.

 

Why did the Law change?

 

Legal amendments reflect society’s need for new norms to govern the way they live, work, or do business.

The adoption of the new law was a necessity in the framework of facilitating and improving the implementation of the obligation for the process of registration of ultimate beneficial owners of reporting entities registered in the Republic of Albania.

Moreover, according to the recommendations of MONEYVAL experts, this law serves as a mechanism which will encourage the registration of ultimate beneficial owners.

Data from the “Budget Revenue and Expenditure Assessment Report” show that until the adoption of this law, 927 fines have been imposed on reporting entities for non-fulfilling their  legal obligation to register their beneficial owners within the relevant legal deadline, by who 109 reporting entities have paid the relevant fine and have registered their beneficial owners in the register of beneficial owners.

 

What is an “ultimate beneficial owner”?

 

An ultimate beneficial owner is the individual who ultimately owns or controls the entity and / or the individual on whose behalf a transaction or activity is being conducted.

 

What is the register of ultimate beneficial owners?

 

Register of Beneficial Owners is a state electronic database, in which data of the ultimate beneficiary owners  of the entities that have the obligation to report them are registered, which collects also in real time the data registered in the respective state registers administered by the respective state institutions, as well as serves as the official electronic archive and ensures transparency in the field of beneficial owners.

Which entities are charged with the obligation to register?

 

Legal entities registered in the Republic of Albania are obliged to declare their ultimate beneficial owners. The subjects that must conform with this legal obligation are the following:

  • Limited liability companies
  • Joint stock companies
  • Collective societies
  • Limited partnerships
  • Representative offices and branches of foreign companies
  • Savings and loan associations and their unions
  • Mutual cooperation societies
  • Agricultural cooperation societies
  • Any other legal entity, which by law is obliged to register with the NBC
  • Non-profit organizations
  • Legal entities and enterprises, with shareholders of central and / or local institutions of the Republic of Albania and other Albanian and / or foreign individuals / legal entities.

 

Which entities are not obliged to register? 

 

  • Non-profit organizations
  • Legal entities and enterprises, whose sole shareholder are the central and / or local institutions of the Republic of Albania;
  • Religious communities
  • Political parties
  • Natural persons, traders registered in the trade register

 

Which are the main legal changes? 

 

  • New deadlines and fines remission

The existing reporting entities, which have not fulfilled in time the obligation to register the beneficiary owners, should comply with this obligation by 30.06.2022. Penalties imposed for non-complying in time with this legal obligation, before the adoption of current amendments, have been forgiven.

  • Reimbursement 

Existing reporting entities that have paid the remised fines are eligible to apply to the National Business Center (NBC) for a refund.

  • Dual application and removal of rejections

New entities applications for registration in the NBC will be accompanied by the registration of beneficial owners. If there are insuficientes in the application, reporting entities will no longer face immediate refusal of registration.

For example: In case of rejection of the application for initial registration of beneficial owners by the reporting entities which are registered in the commercial register by their indirect owners, the registration should be done within 40 (forty) calendar days from the date of rejection of the application.

  • Failure to comply with the deadlines and fines

Failure to register the initial data of the beneficiary owner within the period of 40 (forty) days, is punishable by a fine in the amount of 50,000 (fifty thousand) ALL.

Failure to register the initial data of the beneficial owner of a non-profit organization, within a period of 40 (forty) days, is punishable by a fine in the amount of 500,000 (six hundred thousand) ALL.

Failure to register the initial data of the beneficiary owner within 40 (forty) days after the end of the 40 (forty) day period, is punishable by a fine in the amount of 600,000 (six hundred thousand) ALL.

 

Fines should come to an end 

 

Young entrepreneurs, especially the ones who want to register their startup at the BCC (read here more for the Albanian Draft Law on Startups), have other priorities.

At Legit we know very well that as the product is launching, the last thing you want to read as a startup are uncalculated expenses (for example, fines), so we have prepared a legal eGuide that has all the necessary information from the moment of startup’s establishment to the MVP’s launch

The Law on Beneficiary Owners has been published in the Official Gazette no. 25, dated 15.02.2022, and will enter into force 15 (fifteen) days after its publication.

We promise that we will publish the electronic guide faster than that, but if you want to know more – download here the eGuide “On Employment in Albania”.

Until the next Blog post, do not forget to Subscribe below for the latest legal changes and Legit2.0 launch! 

 

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