We collect information on beneficial owners to prevent money laundering and terrorist financing, as well as to fulfil our obligations under the Tax Information Exchange Act.
Beneficial owner is an individual who ultimately has ownership or control over a natural or legal person or in whose interest, favour or on whose behalf a transaction is carried out.
A beneficial owner is an individual who:
- has a direct shareholding in the company, i.e. owns at least 25%;
- has an indirect shareholding in the company, i.e. owns another company or companies with a combined shareholding of at least 25%; or
- has a controlling influence over the company by any other means, regardless of the size of the shareholding, voting rights or ownership interest, or the direct or indirect nature of such control.
In case it is impossible to identify the beneficial owner through direct or indirect ownership or ultimate control, the beneficial owner will be identified as a member of the highest governance body, i.e. either:
- the chairman of the company’s management board or supervisory board;
- in their absence, all the members of the management board or supervisory board. In case there are more than five members, the ones with the highest representative rights are indicated (information available on the extract of the company register); in case of a supervisory board, the beneficial owners are those up to five members of the supervisory board who:
- participate in the strategic decision-making of the company; and
- have an impact on the day-to-day activities, transactions, and financial relations of the company.
In most cases, private individuals are considered the ultimate owners of the assets and transactions in their account. However, there may be certain situations, where ownership and control may be shared or transferred to another party in which cases we need to be informed.
Unless exempted by law, information on beneficial owners must be provided by all clients.
The guidelines on identifying beneficial owners can be found on the website of the Ministry of Finance.
TEKSA is a database of beneficial owners in the Estonian Commercial Register.
We are obliged by law to compare the information on ultimate beneficial owners (UBOs) provided by a legal entity with the UBO information in TEKSA. This comparison is necessary both when establishing the client relationship and during applying subsequent due diligence measures. In the event that the UBO information provided differs from the UBO information in TEKSA, we are required to notify the client and request that they ensure both databases contain the same up-to-date and correct information If the client fails to make necessary corrections, we are obliged to report the discrepancy to the Commercial Register. The Commercial Register will then add discrepancy flags to the company’s data in TEKSA and we will have the legal obligation to terminate the cooperation with the client.
The required information on the UBO includes:
- full name
- date of birth
- Estonian personal identification code (in case of Estonian citizens and long-term residents)
- residential address
- country of birth
- tax residence
- tax identification number
- the nature and extent of control exercised over the company (e.g. direct or indirect shareholding or control exercised as a member of the highest management body of the company).
It is important to keep the UBO information accurate and up-to-date both with LHV and in the Commercial Register in order to avoid misunderstandings and inconveniences. Any changes to the UBO should be reported as soon as possible.