Law no. 89/2017, of August 21st, approved the Legal Regime of the Central Register of the Beneficial Owner (CRBO), creating a database with information about the persons who exercise ownership or effective control over companies and other legal entities.
The CRBO transposes to internal law chapter III of Directive (EU) 2015/849 of the European Parliament and of the Council, reinforcing transparency in business relations and compliance with the rules on prevention of use of the financial system for the purposes of money laundering or terrorist financing.

Introduction
The new regime of the CRBO, which comes into force on November 19th, creates a database containing sufficient, accurate and up-to-date information about the person or persons who, directly, indirectly or through a third party, own or exercise effective control of companies and other legal entities.
For this purpose, the law establishes a set of reporting obligations, initial, periodic and contingent, still pending regulation.
In addition to the reporting obligations to the CRBO, the law also imposes that companies organise and maintain an internal register, identifying its partners, other persons holding indirect ownership interests, and those who, in any way, have effective control over the company. Partners are then under the obligation to inform the company of any changes to the registered information, within 15 days.
The internal register rules apply mutatis mutandis to the other entities subject to the CRBO.

Scope
The following entities are subject to the CRBO: a) associations, cooperatives, foundations, civil and commercial companies, as well as any other legal persons holding a tax identification number in Portugal; b) representations of foreign legal entities operating in Portugal; c) other entities that, pursuing different objectives and activities from those of their associates, do not have corporate personality; (d) trusts and branches registered in the Madeira’s Free Zone and also, depending on certain requirements, other trusts and legal arrangements with a similar structure or function.
Services and entities of the sub-sectors of the central, regional and local administration and other public entities, listed companies (subject to disclosure requirements consistent with European Union law or subject to equivalent standards ensuring sufficient transparency of ownership information), consortia and complementary groupings of companies, as well as certain property condominiums are exempted from the CRBO.

Beneficial owner reports
Entities covered by the CRBO will have to comply with the following reporting obligations on their beneficial owners:
- Initial declaration, at the time of incorporation, or at the time the regime becomes applicable due to expiration of an exemption criteria;
- Up to July 15 each year or together with the annual tax and accounting declaration, confirmation that the information in the CRBO is accurate, complete and up-to-date;
- In case of change, update the information contained in the CRBO, as soon as possible but no later than 30 days after the change.

Initial reports will be submitted in accordance with the rules established by ministerial order of the ministers of finance and justice (still pending), and all information currently included in the central register of legal persons will be transferred to the CRBO.
The legal regime of the CRBO provides that reports shall contain relevant information on the participant and on the entity subject to the CRBO, including the identity of the holders of its capital, the equity participations held, the identity of directors, in fact or at law, and the beneficial owners.
The law also sets special provisions on the contents of the reports in the case of trusts registered in the Madeira’s Free Zone and other legal arrangements.

The following data shall be collected from the reports:
- On the entity subject to the CRBO or, in the case of companies, on the owners of equity participations that are legal persons:

• Corporate ID and tax payer numbers, or equivalent in the case of non-resident entities;
• Business name, legal nature and head office;
• Portuguese economic activity code (CAE) and the legal entity identifier, if applicable;
• Email;

- On the beneficial owner:
• Full name, date and place of birth, nationality(ies) and place of permanent residence;
• Data of the identification document and tax payer number, or equivalent;
• Email;

- On the participant:
• Name, place of permanent residence or professional domicile;
• Data of the identification document and Portuguese tax payer number if applicable;
• Capacity in which it acts;
• Email

Directors of companies and/or its founders, as well as persons performing equivalent functions in other legal persons, lawyers, notaries, solicitors and certified accountants are entitled to submit CRBO reports.

Access to the information
Some of the information contained in the CRBO will be publicly available on a website. This is the case of information about the entities covered by the CRBO.
As to the beneficial owners, name, month and year of birth, nationality, country of residence and economic interest held shall be public as well.
The judiciary, police and other authorities identified in Law no. 83/2017, of August 18th (on prevention of money laundering or terrorist financing), and the Portuguese Tax Authority shall have full access to the information contained in the CRBO as part of their actions in the prevention and combat of money laundering and terrorism financing. However, access to data related to the beneficial owner may be wholly or partially limited if the disclosure is likely to expose the person to the risks of fraud, abduction, extortion, violence, or intimidation, or when the beneficiary is minor or incapable.
All accesses by authorized entities will be registered in the system for a period of 5 years.

Non-compliance
Failure to comply with the reporting obligations will be registered and disclosed in the CRBO, and the defaulting entity may not:

• Distribute profits;
• Execute (or renew) supply contracts, public works contracts, or contracts of purchase of services and goods with the State;
• Apply for public service concessions;
• Admit of its shares (or any convertible securities) to trading on a regulated market;
• Benefit from European structural and investment funds.

Failure to comply with the obligation to organise and maintain the beneficial owner register is punished with a fine from € 1,000 to € 50,000. In case of unjustified non compliance, by the partners of a company, within 15 days upon notification to provide information necessary to the internal register, the company may decide to redeem their respective shares.

Legislative amendment
Law no. 89/2017, of August 21st, inserted relevant amendments to other legislation, such as:

- The Register of Property Code - mandatory mentions were added, such as the account numbers of the payer and the beneficiary, whenever bank transfers are involved in the transaction of property subject to registration.
- The Commercial Registry Code - failure to comply with the obligation to report the beneficial owner is in itself a fact subject to registration, and each amendment to the bylaws shall be submitted with an updated list of owners together with the updated version of the bylaws.
- The Notary Code – notaries may refuse to intervene in case of non-compliance with reporting obligations by the parties.
- The Corporate Income Tax Code - some tax exemptions will not apply to those non-compliant with reporting obligations under this regime.