Why is it necessary to submit UBO information to the Registry?
The legal requirement to identify the UBO, collect, update and file relevant data has been in place for since 2019, similarly to the other countries of the European Union and elsewhere. However, until 2022 the information was supposed to be kept in internal files only. This year the Centre of Registries has provided the system enabling to file the data with the Registry. Hence, now all legal entities must submit the required information to the Registry to fully comply with legal regulation. Investment funds and investment companies will be able to file UBO data as of August 2022.
Who is considered as an UBO?
Ultimate Beneficial Owner is a natural person who:
Directly or indirectly holds more than 25 % of shares and (or) votes in the company (i. e. direct or indirect owner).
Controls the legal entity through other means, for example, has the right to adopt or veto decisions of a strategic nature, to appoint or remove managing director of a company, approve financial statements related to payment of dividends or otherwise control the legal entity through personal or business relationships.
In case UBO is not identified using criteria described above, a person who controls the legal entity through other rights: head of the company (e. g. CEO or director), member or chairperson of the board or another managing body, senior managing official is registered.
How is the UBO information filed?
Data is submitted to the subsystem of the Information System of Legal Entities’ Participants (JADIS) called JANGIS electronically via Self-service Portal of the Centre of Registries. Head of the company access JANGIS through the Self-service Portal using qualified electronic signature or another access authorization recognized by the Centre of Registries. In case the head of the company does not have the access or is not willing to use it, the power of attorney may be issued to another person to arrange the filing. Such power of attorney may be issued via Self-service Portal or in a traditional paper format using template provided on the website of the Centre of Registries.
What data is filed?
The following data of a natural person is disclosed: first name, last name, date of birth, personal code (if applicable), residential address, citizenship, a country issuing personal identification document, countries of residency for tax purposes as well as the extent of ownership and (or) control rights. For foreign citizen a copy of a person’s identification document is enclosed as well.
In case of indirect UBO, when a legal entity controls another legal person through one or several legal entities, the following data of all the entities in the structure should be provided: name, registration number, legal form, registered address, extent of ownership.
If there are foreign legal entities in the structure, in addition the country where such entity is registered as well as the name of the registry and date of registration is indicated. Also, excerpts from the registries are enclosed. Excerpts should be legalized (apostilled) and translated into Lithuanian, except for the cases when information at the registry is publicly available free of charge.
For companies whose shares are traded on a regulated market subject to disclosure requirements in line with the EU legislation or equivalent international standards, it should be sufficient to identify the name of the market and data of senior managing official. It should be noted that currently, there is no technical possibility to indicate the name of the market.
The companies may find on JANGIS certain information readily available from JADIS. Nevertheless, it is mandatory to verify and confirm such data.
What to do if UBO data has changed?
New UBO list should be submitted in case of any changes in legal or natural persons or their data (for example, address). Deadline – not later than in 10 working days from the change. Hence when changes in the corporate structure occur (direct or indirect ownership), new list should be submitted to JANGIS.
What are the consequences in case of failure to follow the requirements?
For failure to comply with the requirements set by the Law on the Prevention of Money Laundering and Terrorist Financing administrative liability and fines may be applicable for responsible persons between EUR 500 and EUR 5 800. In addition, the company may be included into the list of unreliable taxpayers. Consequently, this might be a ground to remove the supplier from the public procurement procedures. The companies may also face challenges when dealing with financial or other institutions that require to identify UBO.