Uruguayan Law 19484 requires resident (and some non-resident) entities to identify and inform their ultimate beneficiaries and holders of equity and nominative shares. The deadline for submitting the affidavit on beneficiaries is 28 September 2017.
In 2012, Uruguay established an obligation for all resident entities (and some non-residents) whose capital is represented by bearer shares (except in the case of listed companies), to register with the Central Bank of Uruguay (BCU) the holders of such shares, as well as the ultimate beneficiaries.
Subsequently, in May 2017, Law 19.484 established that all resident entities (there are exceptions) and certain non-resident entities must identify and inform their ultimate beneficial owners (UBO). The law, considers as UBO, any natural person who directly or indirectly owns at least 15% of the capital stock or its equivalent or the voting rights, or that otherwise exercise final control over an entity.
This Law also extended what was imposed by Law 18,930 on the declaration of owners of equity shares, also reaching the entities issuing registered shares. Decree 166/017 regulates the provisions of this Law.
The obligated entities must inform the BCU of their UBOs and holders of equity and nominative shares by means of an affidavit.
Entities directly or indirectly listed on stock exchanges, trusts and investment funds supervised by the BCU and civil associations with a certain income cap are exempt from the obligation to identify their UBO.
Other exempt entities are agrarian companies whose social shares belong in their entirety to natural person, de facto and civil societies and cooperatives integrated only by natural person, provided that these are the effective holders.
- Entities with bearer equity participations must submit the corresponding affidavit on their UBO to the BCU within 60 days from 1 August 2017.
- In the event that these entities have real presence in the country and cannot determine the identity of their UBO, they may (under certain conditions) submit their information on the deadline established for the rest of the entities, which is 30 June 2018.
- Issuers of registered shares, personal partnerships and other entities must submit the information on their UBOs and holders of nominative equity shares to the BCU within 60 days from 1 May 2018.
Any modification must be reported within 30 days or 90 days if the holders are non-residents.
Entities that do not meet the requirements established in the new regulation will face sanctions. These are some of the possible non-compliance cases and the sanction applicable to each:
- Breach of the obligation to identify and report the UBO: the fine can be between a minimum of two and a maximum of 100 times the maximum fine for contravention, as established in article 95 of the Tax Code (between US $ 500 - $ 24,900 approximately).
- Non-compliance with the obligation to identify holders of registered shares: the fine can be from a minimum of 20 to a maximum of 100 times the maximum fine for contravention, as established in article 95 of the Tax Code (between US $ 5,000 - $ 24,900 approximately).
- Inadequate legal forms: hindering the identification of the UBO by submitting inappropriate legal forms will be punished with a fine of up to 1,000 times the maximum fine for contravention, as established in article 95 of the Tax Code (approximately US $ 249,000).
- Prohibition to distribute dividends: The entities cannot distribute profits without having previously fulfilled the obligations established by the new rules. Failure to comply with this provision will be punished by a fine whose maximum amount will be equal to the amount unduly distributed.
- Suspension of the Certificate issued by Uruguayan Fiscal Authority, which demonstrates among other things that the entity has no fiscal debts.
- Prohibition to register public acts in the General Registry Office.
The above-mentioned fines will be graduated according to the economic dimension of the entities (based on the assets and income of the last fiscal year) and the term of default.