Uruguay: Proposed legislation, disclosure of ultimate beneficial owners

Uruguay: Disclosure of ultimate beneficial owners

Proposed legislation, currently pending before the Uruguayan Parliament, would require certain resident and nonresident entities to disclose the identity of their ultimate beneficial owners to the Central Bank of Uruguay. The bill would also require the owners of nominative shares of Uruguayan entities to register with the central bank.

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The bill’s aim is to provide for fiscal transparency and to prevent money laundering activities. If passed and enacted into law, the legislation’s effective date would be 1 January 2017.

Reporting, registration requirements

The bill includes reporting and registration requirements that would apply to:

  • Resident entities
  • Nonresident entities that have a permanent establishment (PE) or place of effective control or management in Uruguay, or that own local assets valued in excess of approximately U.S. $300,000

As proposed, resident entities and nonresident entities (as defined above) would be required to report to the central bank the identities of their “ultimate beneficial owners” (defined as an individual who, directly or indirectly, holds at least 15% of the entity’s capital or voting rights, or otherwise has control over the entity). 

Reporting entities would also be required to provide documentation supporting their disclosures.

The proposed legislation would require domestic entities that issue nominative or registered shares to disclose the identity of their owners to the central bank (this reporting obligation is already applies for bearer shares). There would be certain exceptions, for instance one exception currently being contemplated would apply for securities that are quoted on stock exchanges and for securities held by or through foreign investment funds and trusts, but subject to conditions to be established by regulations that would be subsequently issued. 

A failure to comply with the reporting and registration requirements would be subject to monetary penalties being assessed against the entities and their representatives. Other proposed sanctions could include a prohibition against the ability to distribute dividends and the suspension of tax certificates. 

 

For more information, contact a tax professional with KPMG’s Latin America Markets practice or with the KPMG member firm in Uruguay:

Devon Bodoh | +1 (202) 533 5681 | dbodoh@kpmg.com

Alfonso A-Pallete | +1 (305) 913 2789 | apallete@kpmg.com

Luis A. Aisenberg | + 598 290 24546 | luisaisenberg@kpmg.com

Gustavo Melgendler | + 598 290 24546 | gmelegendler@kpmg.com

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