Ultimate Beneficial Owner (UBO) Identification and Registration

Under Ukrainian AML law, the UBO is the natural person who ultimately exercises decisive influence over a legal entity. A UBO is typically identified through direct or indirect ownership of at least a 25% share in the authorized capital or voting rights of the legal entity. Decisive influence can also be exercised through other means, such as the right to control, use, or dispose of all or a significant portion of the company’s assets, the right to receive income from the activities of a legal entity, the right to exert a decisive influence on the composition of management bodies or voting results. If, after exhausting all reasonable efforts, no UBO can be identified based on the criteria above, a company may declare the absence of a UBO. However, this is only permissible in specific situations, for example, within a complex ownership structure where no single individual holds significant ownership, and this declaration must be substantiated with certified documentation.

However, the person who has a formal right to 25% or more of the authorised capital or voting rights in a legal entity, but is a commercial agent, nominee owner or nominee holder, or only an intermediary in relation to such right, shall not be a UBO.

Which Entities Must Register Their UBO?

The obligation to identify and register a UBO applies to almost all legal entities registered in Ukraine. The head of the legal entity is personally responsible for ensuring the information is complete, accurate, and submitted on time. However, the law provides exemptions for certain entities, including:

• Political parties and their structural units
• Trade unions
• Creative unions
• Employers’ organizations
• Attorneys’ unions and bureaus
• Religious organizations
• Chambers of Commerce and Industry
• Condominium associations
• State and municipal enterprises

The UBO Identification and Registration Process in Ukraine

The registration procedure of the UBO is governed by the Law of Ukraine No. 755-IV “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organisations”. The process involves both correctly identifying the UBO and formally submitting the required information to a state registrar. This submission must include a detailed ownership structure diagram, certified by the CEO, outlining the entire ownership chain leading to the UBO. A key feature of the Ukrainian system is its rigorous documentation requirement, which often includes notarized and apostilled copies with translation into Ukrainian of passports for foreign UBOs and certified corporate documents for every foreign entity in the ownership chain. New entities must submit UBO information upon incorporation. Any changes to the UBO or the ownership structure must be reported to the registrar within 30 business days of their occurrence.

Public Access to the Ukrainian UBO (USR) Register

The Unified State Register (USR) is a public register, making information about the UBOs of Ukrainian companies transparent and accessible online. The public can view the following information about a UBO:

• Full name
• Country of residence
• Date of birth
• Nationality
• Information on the nature and extent of their beneficial interest

The public portal can be accessed at usr.minjust.gov.ua. This transparency allows anyone to check the UBO of a business, though accessing full extracts may require a fee. Access to the USR is restricted during the wartime requiring the use of an electronic digital signature by the accessor.

Consequences of Non-Compliance in Ukraine

Failure to comply with UBO registration duties carries sanctions that can directly impact a company’s management and its ability to operate. The primary consequences include:

Fines

An administrative fine ranging from UAH 17,000 to UAH 51,000 (approx. €400 – €1,200) can be imposed directly on the head of the legal entity for failing to submit, submitting late, or providing incorrect information about the UBO.

There are fines from UAH 17,000 to UAH 340,000 (approx. €400 – €8,100) that can be imposed on the legal entity as well:

• for including false information regarding the UBO or the absence thereof in the documents submitted for state registration of the legal entity;
• for failing to submit or for the late submission of the information regarding the UBO or the absence thereof to the state registrar.

The fine from UAH 17,000 to UAH 340,000 may also be imposed on Ukrainian resident legal entities- and/or Ukrainian resident individuals who are founders (participant) of a legal entity for failing to provide, upon the request of the legal entity, information regarding the UBO or the absence thereof, which must be submitted to the state registrar.

Operational Restrictions

Incorrect or outdated information in the register can significantly hinder business operations. Notaries may refuse to certify transactions, such as real estate sales or changes in company charters, if UBO data is not properly filed. Similarly, banks are required to verify UBO information and may refuse to open accounts, process transactions, or may even freeze existing accounts for non-compliant companies.

Ensure Your Compliance and Avoid Penalties in Ukraine

Correctly identifying your Ultimate Beneficial Owner and ensuring their proper registration is a critical legal requirement. Our team of experts provides a comprehensive service that covers both the UBO identification based on your specific corporate structure and the complete handling of the registration process. By entrusting this task to us, you can be confident in your compliance and avoid the severe penalties associated with any errors.