Being a beneficial owner of a stock company in Latvia requires passing through processes specified by the Enterprise Register of the country. It is important to know these processes to ensure that the person can own stocks in a company.
The law on money laundering and terrorism financing in Latvia describes a beneficial owner as a natural person who owns the customer (legal person) or controls the customer, or who establishes the business connection in the customer’s best interests, or each transaction is carried out individually, and at the very least:
- In the case of legal persons, is a natural person who holds more than 25% of the capital shares or voting rights of a corporation, whether directly or indirectly, this person is regarded as a legal person. A legal entity’s stockholders or those who control it
- For the law in Latvia, a natural person is defined as the “founder,” “proxy,” or “supervisor” (in Latvian) of a legally binding arrangement.
Applying changes in beneficial owners of the stock company in Latvia
To apply for changes to the participant register, it is important to note that there is the PLG who is a natural person, this person either owns or controls the SIA (stock company), this is either through direct or indirect participation, the natural person is to own more than 25 percent of the capital shares/ voting rights in the stock company or be among those who control it either directly or indirectly.
This means that to apply for changes, the application form must contain details about the SIA PLG, which is the information of the legal person with shares in the stock company.
Things to specify when applying for SIA PLG (Stock Company Ownership)
The enterprise register specified that the person applying will have the following;
- The personal identification number (if any birthdate, month, year, number, and date of issuance of the identification document, as well as the nation and authority that issued the document)
- The country of residence
- The method through which the SIA is controlled
The method through which the stocks are controlled
The items listed below are the methods by which stocks are controlled in Latvia
- Under the legal person’s position (if the PLG is a member)
- As a member
- As a separate person controlling (if the true beneficiary is the indirect owner or indirectly controls the SIA)
- Based on a contract of authorization
- Based on ownership (for example, if the PLG is the owner of a member of the SIA, a legal person)
- Through the legal arrangement of a founder
- Through the arrangement as a principal
- Through the legal arrangement as a manager
- Based on the transaction relationship
Aside from this specification, the Enterprise Register has the right to request a documentary justification of how the PLG controls the stock, also with a document confirming the relevance of the information that identifies the PLG (this is in form of a notary copy of the identity document, foreign population register statement, or documents compared to them) and a document that supports a statement that the PLG cannot be ascertained.
The right to request any of the document above apply with a regard to registering new information on the PLG, in scenarios where the information of the PLG has been registered, the Enterprise Register shows that the information has not changed.