Until 31 May 2019, all legal entities have to declare their beneficial owners in Bulgaria. This obligation is in line with the 4th Anti-Money Laundering Directive of the European Union. The directive has already been implemented in many other Central and Eastern European countries too.
On 8 January 2019 the Regulations on the Implementation of the Anti-Money Laundering Act were promulgated in Bulgaria. Publishing these rules rectified an important missing element of the implementation of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (4th Anti-Money Laundering Directive).
Тhe new Measures against Money Laundering Act (MAMLA), promulgated in the State Gazette, issue 27, on 27 March 2018, have been in force in Bulgaria since from 31 March 2018. The Act repealed the former Measures against Money Laundering Act and requires legal entities or other legal formations, established in the Republic of Bulgaria, to disclose their beneficial owners to the Commercial Register and Register of Non-Profit Legal Entities and with the Bulstat Register.
Exemptions from declaration of beneficial owners in Bulgaria
According to the MAMLA, all legal entities established in the country are obligated to disclose their beneficial owners in Bulgaria.
The only exemptions from this obligation are legal entities which are directly owned by natural persons and where the data of these persons is visible either on the entity’s file with the Commercial Register, or on any of the files of entities part of the chain of ownership, e.g. shareholders in a limited liability company (OOD), sole owner of a solely owned limited liability company (EOOD) or a solely owned joint-stock company (EAD).
Data subject to declaration
In accordance with the statutory declaration under the MAMLA, the following data is subject to reporting:
- Identification data of beneficial owners – natural persons;
- Information on legal entities or other legal formations, which have direct or indirect control; and
- Contact person on measures against money laundering matters – If a company does not have a director – natural person, permanently residing on the territory of Bulgaria, the company must appoint a person meeting this requirement, who will be the contact person on the measures against money laundering matters.
Definition of beneficial owners in Bulgaria
The legal definition of beneficial owners in Bulgaria is introduced in § 2 from the supplemental provisions of the MAMLA and corresponds to the definition provided in the EU Directive. Accordingly, “beneficial owner” is any natural person(s) who ultimately owns or controls the legal entity or another legal formation, and/or the natural person(s) on whose behalf or for whose account a transaction or activity is being conducted, and who meets at least one of the following conditions:
- In the case of corporate legal entities and other legal formations, the beneficial owner is the natural person(s) who directly or indirectly owns a sufficient percentage of the shares or voting rights in such entity or another legal formation, including through bearer shareholdings, or through control via other means, other than a company listed on a regulated market that is subject to disclosure requirements consistent with Union law or subject to equivalent international standards which ensure adequate transparency of ownership information. Indication of direct ownership is present when a natural person(s) owns at least 25% of the shares in a legal entity or another legal formation. Indication of indirect ownership is present when at least 25% of the shareholding in the legal entity or another legal formation is held by a corporate entity or another legal formation, which is under the control of the same natural person(s), or by multiple legal entities and/or legal formations, which are under the ultimate control of the same natural person(s).
- In respect of trustee ownership, including trusts, trusteeships and other similar foreign legal formations, established and existing under the legislation of the jurisdictions admitting such forms of trust ownership, the beneficial owner shall be:- the founder;
– the trustee;
– the protector, if any;
– the beneficiary or class of beneficiaries, or the principal in whose interest the trust is created or managed when the natural person benefiting from it is yet to be determined;
– any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means. - In respect of foundations and legal arrangements similar to trusts – the natural person(s) holding equivalent or similar positions to those referred to above.
Any natural person(s) who is/are nominee director(s), secretary(ies), shareholder(s) or owner(s) of the capital of a legal entity or other legal formation shall not be deemed beneficial owner(s), if another beneficial owner is established.
Term and order for announcement
Obligated entities must file applications for the registration of data on beneficial owners in Bulgaria with the Commercial Register and Register of Non-Profit Legal Entities, and with the Bulstat Register, by 31 May 2019.
Sanctions
For non-compliance with the obligation to register the data subject for the declaration by the MAMLA term, a penalty from BGN 500 (roughly EUR 256) to BGN 5,000 (roughly EUR 2,556) shall be imposed in the cases where the breaching party is a natural person. A penalty from BGN 1000 (roughly EUR 511) to BGN 10,000 (roughly EUR 5,112) shall be imposed when the breaching party is a legal entity.
After incurring a penalty for non-compliance with the obligation to register the given data on beneficial owners in Bulgaria, and if the obligated entity does not register within the provided term, another penalty within the above mentioned range shall be imposed on the obligated entity each month until the application for the registration of the data is filed.
