Mandatory Registration in the Final Beneficiary Registry for Commercial Companies

Mandatory Registration in the Final Beneficiary Registry for Commercial Companies

Since April 19, the implementation of the Final Beneficiary Registry for commercial companies began, requiring the update of the Final Beneficiary information for companies.

A Final Beneficiary (FB) of a commercial company is defined as:

a) The natural person or persons on whose behalf an operation is carried out.

b) The natural person or persons who ultimately own or control a client, including those who exercise ownership or control through a chain of ownership or other means of control different from direct control.

The term ownership refers to both ownership exercised de facto and that obtained through legal means. The term control refers to the ability to make and impose relevant decisions, whether exercised through formal or informal means.

To identify the final beneficiary in a commercial company, the legal situation must be analyzed on a case-by-case basis. However, some of the criteria to determine the final beneficiary are: the natural person who owns 25% or more of the share capital; the natural person who has decision-making power in financial, operational, and/or commercial agreements, or who exercises other forms of control over the company; and the natural person holding the highest administrative position or legal representative, among others.

According to the information provided by the National Registry Directorate of the Supreme Court of Justice through Circular No. 008-2021, it is important to note that the declaration and update are carried out in alphabetical order according to the first letter of the company’s name or trade name. The following dates must be kept in mind:

• Companies established after April 19, 2021: 30 calendar days.
• From A to H, from April 19 to October 18, 2021.
• From I to Z, from October 19, 2021, to April 18, 2022.

To comply with the new obligations arising from the Final Beneficiary Registry, commercial companies must:

1. Update the basic information in the Commercial Registry.
2. Designate a natural person, either a national or resident in Nicaragua, to handle the Final Beneficiary Registry if the Legal Representative cannot perform the declaration. The power of attorney must be registered.
3. Create a user account (Business Profile) and request access credentials for the Final Beneficiary Registry.
4. Declare the Final Beneficiary information within the established timeframe, following the required criteria, in the respective form (in one single act).
5. Correctly identify the Final Beneficiary.
6. Attach supporting documents to the Final Beneficiary declaration.
7. Provide the required information to the competent authorities within the established time.
8. Keep documents, files, and correspondence that appropriately identify the final beneficiaries for no less than 5 years.
9. Companies that dissolve and liquidate must also keep their documentation for the same period.
10. Update the Final Beneficiary information whenever there is a change, including the designation of the person responsible for making the declaration.

The information update, in accordance with the Final Beneficiary Registry Operating Regulations, must be carried out every 12 calendar months regularly, and on an extraordinary basis when any change occurs that modifies or amends the company’s incorporation agreement, affecting the basic information and the identification of the Final Beneficiary.

This update and declaration process is absolutely mandatory, and failure to comply is subject to penalties.

Penalties may range from the publication of non-compliance, fines of one hundred to one thousand five hundred units, to the immobilization of commercial registry traffic.

Written by: Didier Alemán