According to new regulation in Sweden, the majority of Swedish companies and legal entities have a legal duty to register their beneficial owners at the Swedish Companies Registration Office (Swe: Bolagsverket) before 1st February 2018. This includes branches (the foreign-based company that owns the branch) and foreign entities and associations conducting business activities in Sweden. The new law came into effect on 1 August 2017 and is based on EU’s fourth Anti-Money Laundering Directive.
For our foreign clients
There are different ways to register beneficial owners at Bolagsverket, where the preferred method is for companies to register online with a Swedish e-identification. Since this digital method is not possible for many of the foreign entities, BDO can assist you in applying for dispensation from this requirement to register beneficial ownership online and subsequently assist you when registering your beneficial owners on paper.
This process is performed in a 2-step approach, first apply for dispensation from the digital registration requirement and once dispensation is approved – the registration of beneficial owner will be submitted to Bolagsverket.
BDO can assist you with the following
• Assist in applying for dispensation from the requirement to register online
• Assist in handing in the registration of the beneficial owner/s to Bolagsverket
INFORMATION FROM BOLAGSVERKET
INFORMATION REGARDING SWEDISH ENTITIES
Beneficial ownership register
The majority of Swedish companies, associations and legal entities must register beneficial ownership information with Bolagsverket before 1 February 2018. Newly registered companies and associations must register beneficial ownership information within four weeks from their registration date.
What is beneficial ownership?
A beneficial owner is someone who ultimately owns or controls a company, association or other type of legal entity. A beneficial owner can also be someone who benefits from someone else acting on their behalf.
What is the purpose of the register?
In 2015, a new Anti-Money Laundering EU Directive entered into force. Its purpose is to combat money-laundering and financing of terrorism. The directive requires every EU member state to implement a central register containing details of company beneficial owners.
The purpose of the register is to give banks, the Swedish financial intelligence police unit and others access to information about who has significant control of a company. We have developed a new e-service to enable information searches in the register.
Who will have to register beneficial ownership?
This will affect around 800,000 companies and associations. Those needing to register beneficial owners include:
• Branches (the foreign-based company which owns the branch)
• Collective farming associations
• Community associations
• Co-operative banks
• Co-operative tenancy right associations
• Economic associations
• European companies (SEs)
• European cooperative associations (SCEs)
• European economic interest groupings (EEIGs)
• Insurance associations
• Insurance companies
• Joint-stock banking companies
• Limited companies
• Limited partnerships
• Mutual insurance companies
• Non-profit associations which have one or more beneficial owners
• Religious communities
• Savings banks
• Tenant-owner associations
• Trading partnerships
• Trusts (if managed from Sweden)
• Water boards
The following are exempt and do not need to register beneficial ownership:
• Estates of deceased or bankrupt persons
• Limited companies with voting shares admitted to trading on a regulated market
• Non-profit associations which do not have any beneficial owners
• Simple partnerships
• Sole traders
• The state, county councils and municipalities as well as legal entities where these have a significant deciding role
INFORMATION REGARDING FOREIGN ENTITIES WITH BUSINESS ACTIVITY IN SWEDEN
If you have a foreign company or association that has business activity in Sweden, you may also need to register the beneficial owner at Bolagsverket. This can be done from December 2017. Foreign companies and associations within the European Economic Area (EEA) do not need to register information in Sweden if they have already registered this information in the beneficial ownership register of another EEA country.
Identify whether you have beneficial owners
The first step for the foreign company is to identify whether they have beneficial owners and who this or these individuals are.
If they have one or more beneficial owners, the foreign company must then identify the type and the extent of their control (as a percentage) for each individual.
The foreign company may reach the conclusion that there is no individual who ultimately owns or controls the entity and therefore there is no beneficial owner to register.
The foreign company may reach the conclusion that due to the information available, it is not possible to identify whether there are beneficial owners or not, or that there is a beneficial owner but cannot identify who this individual is.
What is beneficial ownership?
Beneficial owners are individuals who ultimately own or control a foreign company. An individual can control a foreign company in various ways, such as by
• holding more than 25 percent of the votes through shares, voting rights or ownership interest
• holding the right to appoint or remove a majority of the board of directors, or equivalent of senior management.
There may even be agreements or provisions in the articles of association, company agreement or similar documents which could indicate that an individual is a beneficial owner.
If the foreign company is based in a country within the EEA, the identification of beneficial owners must be done using the Swedish definition and rules.
Close family members
If an individual owns or controls a foreign company together with close family members, their percentage of control is added together. The following count as close family members: spouses, registered partners, parents, children and children’s spouses or registered partners.
In a group of companies, beneficial owners are the individuals who own or control the company which ultimately controls all of the other companies in the group.
A foreign company has activities in Sweden. The company is based in Germany and has registered beneficial ownership information there. The company does not need to register the information in Sweden as well.
A foreign company has activities in Sweden. The company is based in Canada and is comparable to a Swedish limited company. The company must therefore follow the same rules as for Swedish limited companies when registering beneficial ownership information.
Register beneficial ownership information from December 2017
Once the foreign company has identified whether there are any beneficial owners and who this or these individuals are, they must register the information with Bolagsverket. They must still register even if they cannot identify who the beneficial owners are.
• Foreign companies which set up activities in Sweden before 1 August 2017, when the law came into force, must register beneficial ownership information by 1 February 2018 at the latest.
• Foreign companies can register beneficial ownership information online from December 2017.
Information to be included:
• company registration number
• company name
• full name, Swedish personal identification number or date of birth, nationality and country of residence for each beneficial owner
• type of control, that is, in what way the beneficial owner controls the company or association
• extent of control, as a percentage
• information about whether the individual (or individuals) own or control the foreign company or association together with close family members or through other companies.
You do not have to provide the personal details of a beneficial owner for a company running an operation of a political, religious or cultural nature, if it reveals the person’s political, religious or cultural views.
Nor do you have to provide personal details of a beneficial owner if it reveals trade union membership or information about the individual’s sexuality or health.