The new Regulation of the Transparency and Ultimate Beneficiary Registry published last Friday, March 8th, has undoubtedly sparked a flurry of inquiries, complaints, and legal offices have been pondering how to proceed with the declaration for this 2024.
Foreign-person corporations are the most impacted by the changes. One of the most significant changes this year is the elimination of the possibility for special agents to submit the declaration. This poses a particular challenge for foreign individuals who are legal representatives of corporations and do not have a digital signature. In these cases, submitting the declaration through a general agent is permitted in exceptional cases, but this entails additional expenses for partners who cannot do it directly, which is a crucial aspect to consider.
The step-by-step process of the Transparency and Ultimate Beneficiary Registry for foreign-person corporations will be:
- Appointment of a general agent: If you are a foreign person without a digital signature and need to submit the declaration, appoint a general agent to act on your behalf.
- Registration of the general agent: Register the general agent in Costa Rica and ensure that they are duly authorized to represent you in legal and administrative matters.
- Information collection: Provide the general agent with all necessary information about the company’s structure and ultimate beneficiaries.
- Completion of the form: The general agent completes the Transparency and Ultimate Beneficiary Registry form on your behalf, using the provided information.
- Digital signature: If the general agent has a digital signature, they digitally sign the form on your behalf. Otherwise, ensure that the form is physically signed and submitted along with supporting documents.
- Submission: The general agent submits the complete and signed form to the competent authorities within the deadline established by law, ensuring compliance with all applicable instructions and requirements.
What other changes are there due to this new Regulation?
Automatic determination of ultimate beneficiaries. Article 8 of the new regulation indicates that the Central Bank of Costa Rica will develop functionality to automatically identify the true owners of companies. If a company is connected to others and one of those companies does not provide the necessary information, the first company will not have complied with the correct RTBF submission.
Explained in simpler terms, this means that if a company is connected to others and one of those companies does not provide the necessary information, the first company will not have complied with the rules. For example, if a company has another company as a shareholder, both must provide the information for everything to be correct.
New deadline for submission. The deadline for submitting the declaration covers the dates from July 1st to July 31st, 2024.
New definition of non-compliance. Article 31 of the new regulation establishes that companies will be in breach in the following cases:
- If they do not provide the required annual information
- If they do not submit the declaration between July 1st and July 31st, 2024
- If they own linked companies and do not comply with points 1 and 2 as established in Article 8.
The above-mentioned changes are of national relevance, so much so that the Costa Rican Bar Association issued a statement urging the Executive Branch to revoke the new regulation for contravening the principles of normative hierarchy and legality, and for exceeding regulatory powers.
For now, the new Regulation is in effect, and if no changes occur, we will have to follow all its statutes in 2024.
