Portuguese Law no. 89/2017, of 21 August 2017, established new measures to prevent the use of the financial system for terrorist funding and money laundering, conform to Chapter III of EU Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 to the Portuguese legal system. Following that action, the Portuguese Ministry of Finance and the Ministry of Justice published Ministerial Order 233/2018 on 21 August 2018, which regulates the legal framework of the Central Register of Beneficial Owners (CRBO). The Ministerial Order entered into force on 1 October 2018, although the first phase of reporting started on 1 January 2019.
Below, we summarize the most relevant aspects of CRBO for international companies.
The following entities are required to report to the CRBO:
- Associations, cooperatives, foundations, commercial or civil law companies, as well as any other legal entities subject to Portuguese or foreign laws, engaged in an activity or performing legal acts or transactions in Portuguese territory that require a Portuguese Taxpayer Number (TIN)
- Representation offices of international or foreign legal entities operating in Portugal
- Other entities pursuing their own objectives and activities different from those of their members and without legal personality
- Trusts registered in the Madeira Free Trade Zone
- External financial branches registered in the Madeira Free Trade Zone
Exempt from filing CRBO
Some entities are excluded from reporting information to CRBO:
- Companies listed on regulated markets that are subject to disclosure requirements consistent with EU law or subject to equivalent international standards which ensure adequate transparency of ownership information
- Consortiums and joint ventures of companies
- Condominiums of buildings submitted to the horizontal property regime, provided some requirements are met
- Public entities of the central, regional or local government, as well as the Bank of Portugal and other regulatory entities.
Beneficial Owner Concept
For the purposes of determining the capacity as beneficial owner, natural persons are considered to be the beneficial owners of a corporate entity whenever:
- They hold, directly or indirectly, the ownership or control of a sufficient percentage of stocks, voting rights or equity of the corporate entity.
- Other indicators and/or circumstances exist which indicate control by other means.
Information provided for CRBO purposes should include the following data, and should be current and precise:
- Identification of the reporting entity
- Identification of shareholders and corresponding shareholding percentages
- Identification of managers, directors and officers responsible for the management and administration of the entity
- Identification of the beneficial owners
- Identification of the declarant entity (lawyer, certified accountant, or other)
Whenever a natural person registered as the beneficial owner is not a resident in Portugal, the tax representative, if any, must also be identified (name, full address and tax number).
Deadlines for CBRO Compliance
Reporting entities that are already incorporated on 1 October 2018 will have to present the Initial Declaration of the beneficial owner by:
- 30 April 2019, in the case of reporting entities subject to commercial registration
- 30 June 2019, for all remaining entities subject to CBRO
Reporting entities incorporated after 1 October 2018 will have to present the Initial Declaration of the beneficial owner at the time of:
- Registration of the company’s incorporation, in the case of reporting entities subject to commercial registration
- Inscription in the Central File of Legal Entities or the event giving rise to their subjection to the CBRO, for all remaining entities subject to CBRO
Any change in the information reported to CBRO must be updated as quickly as possible, not to exceed 30 days from the date of any such change
The CBRO also imposes the filing of an annual declaration confirming the information previously communicated, to be presented with the Annual Accounting and Fiscal Declaration (IES), by 15 July.
However, in 2019, reporting entities will be exempt from submitting the annual confirmation statement, thus the first Annual Declaration must be presented by 15 July 2020.
Consequences of the Non-Compliance
Companies that fail to comply with reporting obligations or fail to update information for CBRO purposes will be subject to a penalty, ranging from €1k to €50k, and forfeit the following abilities:
- Distribution of profits for the fiscal year and to advance payments on profits during the fiscal year
- Entrance into public supply agreements or public acquisition of goods or services with the State or any other public entities
- Submittal of financial instruments to trading on regulated markets
- Benefitting from European structural funds for investment
- Participation in business involving the acquisition or transfer of ownership or any other rights over real estate assets
Note that confirmation of CBRO registration can be required in all circumstances in which the law requires the proof of duly regularized tax affairs.