Analysis

Final call for ultimate beneficial owner registration in Poland

Legal Alert (21/2020)

Back in March, due to the outbreak of coronavirus pandemic, the deadline for mandatory registration of ultimate beneficial owners has been moved to 13 July 2020. With the date now approaching fast, all Polish companies, that are yet to fulfill the requirement, should make sure they would be able to determine and register appropriate entity within the timeframe set by Polish regulations.

What is the Central Register of Ultimate Beneficiaries?

The Central Register of Ultimate Beneficiaries (Polish: Centralny Rejestr Beneficjentów Rzeczywistych – CRBR) is a system in which information on actual beneficiaries of companies, is collected and processed. The main objectives of CRBR are related to counteracting money laundering and terrorist financing. The register is publicly accessible.
 

Who needs to register and what data should be disclosed?

All Polish companies and partnerships (except for public companies and professional partnerships) are required to submit applications to CRBR (it includes joint-stock companies, limited liability companies and all types of partnerships). Every company needs to register its identification data and data of its ultimate beneficial owner (UBO) i.e. natural person or persons exercising direct or indirect control over the company.
 

Determining ultimate beneficial owner

For some entities determining UBO’s may prove complicated. Polish law requires the companies to apply a multiple layered test to establish the persons exercising ultimate control over the company. The control may be both direct and indirect and stem from many sources not limited to mere ownership of shares. The companies need to maintain due diligence and thoroughly examine the subject, especially given the fact that the person providing information on UBO does it under pain of criminal liability for submitting a false statement.
 

Practical hurdles – electronic applications only

The technicalities related to application may be an obstacle for some companies. The application must bear a qualified electronic signature or electronic trusted profile (ePUAP). There are also restrictions as to representatives authorized to file applications, in particular, which may come as a surprise, attorneys-in-fact are not entitled to submit information to CRBR. Therefore, it is wise for the companies to plan and verify if there is a person who has necessary tools (e-signature, trusted profile) and authority to submit the application.
 

Possible penalties

Failure to register an UBO within the 13 July deadline may result in a fine on the company up to PLN 1 million.
 

Identification of UBO is necessary also for obtaining financing under the Anti-Crisis Shield

All entities applying for participation in the PFR’s (Polish Development Fund; Polish: Polski Fundusz Rozwoju) aid scheme under the Anti-Crisis Shield will have to identify UBO and demonstrate that such UBO does not have tax residence in the so-called "tax havens" within the meaning of the EU Council Conclusions on the revised list of non-cooperative jurisdictions for tax purposes (2020/C 64/03).

On the one hand, the obligation to identify and indicate the UBO also applies to entities that are not obliged to register their UBO with the CRBR.

On the other hand, the mere registration of the UBO with the CRBR does not mean that the PFR will simply rely on such registration and refrain from separate verification whether the identification of the UBO was performed diligently and correctly. In particular, where a natural person holding a senior management position in the applicant's organisation is designated as UBO, the PFR expressly reserved itself the right to an in-depth verification of such identification. In this context, it will be important to ensure that the identification process of the UBO is duly conducted and documented.

UBO - ostatni dzwonek na zgłoszenie beneficjenta rzeczywistego

Polish version
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