LLCs with 100% foreign companies as shareholders must immediately disclose their true beneficiaries
On 7th November 2017 the amendments to the Law on the Prevention of Money Laundering and Terrorism Financing entered into force, determining that legal persons must disclose to the Register of Enterprises their true beneficiaries.
According to the Law, a separate application to the Register of Enterprises was not required only in exceptional cases, that is, if information on the true beneficiaries (always natural persons) was already publicly available within the context of duties set forth in other laws and regulations.
The legal persons for whom the Law requirement is mandatory has shown satisfactory activity in terms of providing information to the Register of Enterprises. The sole exception (showing inactivity) are limited liability companies with 100% foreign companies as shareholders. It is believed that these legal persons possess especially high degree of risk to be used for criminal purposes; the same is confirmed in MONEYVAL assessment report on business environment in Latvia. Therefore, we invite the companies to immediately perform their statutory duty and to disclose their true beneficiaries.
We hereby draw your attention to the fact that in cases when true beneficiaries will not be disclosed according to the requirements, the operation of the companies will be terminated according to the statutory procedures. We also issue a warning that lack of information in registers managed by the Register of Enterprises on the true beneficiaries can lead to more rigorous client due diligence by legal subjects (e.g. banks, outsourced accountants, sworn notaries and other service providers) and can be used to refuse cooperation with the respective client.
More information on “Amendments to the Law on the Prevention of Money Laundering and Terrorism Financing” can be accessed in the website of the Register of Enterprises.
 The highest risk degree according to Clause 6.8. of the Latvian National Report on Money Laundering and Terrorism Financing. MONEYVAL 5th stage assessment report about Latvia, Section 7.