The Final Beneficiary Registry in Nicaragua was created by Law No. 1035, Law of Amendments to Law No. 698, General Law of Public Registries and the Commercial Code of the Republic of Nicaragua, published in The Official Gazette Number 158 of August 25, 2020, it is intended to collect the necessary information for the full identification of the person who exercise control of a company, with the purpose of guaranteeing the international community that the companies operating in the country are not used to cover up illegal activities.
Subsequently, on November 25, 2020, the National Directorate of Registries of the Judicial Power published the “Operating Regulations of the Final Beneficiary of Mercantile Companies Registry ” in which the way it will operate, the necessary requirements to make the declaration, the supporting information, the authorized subjects, among others is established. However, the Registry of the Final Beneficiary began operations until April 19, 2021 as provided by DNR Informative Official Communication No. 008-2021.
In the aforementioned Official Communication, it is indicated that in compliance with the provisions of the law, each of the companies operating in Nicaragua must update their basic information before the Mercantile Registry (registered office, data of the legal representative, shareholding composition) and that the following schedule was established for these purposes:
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Commercial Companies whose company name begins with the letters A – H |
Must update their basic information and declare its Final Beneficiary in the period between April 19, 2021 and October 18, 2021 |
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Commercial Companies whose company name begins with the letters I – Z |
Must update their basic information and declare its Final Beneficiary in the period between October 19, 2021 and April 18, 2022. |
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Commercial Companies incorporated after April 19, 2021
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Must declare its Final Beneficiary within 30 days after its incorporation. |
To date the new Final Beneficiary Registry has started operations and, in this article, we mention 12 aspects that you need to consider to do the correct declaration of your company information in order to avoid the imposition of sanctions:
- The declaration is made by filling forms at the online services window on the website of the Integrated Cadastral and Registry Information System.
- The person who, by default, is empowered to create the company business profile and to declare the Final Beneficiary, is the legal representative (Empowered through General Power of Attorney or Generalissimo Power of Attorney).
- The declaration of the Final Beneficiary may be delegated to a third person as long as he has a special power registered in the Public Registry for such purposes.
- To make the declaration, the information of the company must be updated since the Registry of the Final Beneficiary is interconnected with the Commercial Registry.
- Each of the phases of the declaration must be supported with the pertinent documentation in pdf, png or jpg format.
- Supporting documents that come from abroad must be duly certified and apostilled.
- Supporting documents issued abroad will be valid for 60 days.
- Supporting documents that are written in a language other than Spanish must be translated before a Notary.
- In the event that the final beneficiary falls on legal entities such as trusts, investment funds and retirement funds, the requirements may change.
- The information declared in the Final Beneficiary Registry must be updated in an ordinary way once a year and in an extraordinary way each time there is a change in the shareholding composition of the company.
- The administrative sanctions basically consist of publication for non-compliance and the immobilization registry transactions; The first means that any company, bank or other governmental institution will be able to verify that the company has not complied with the declaration of the final beneficiary and the second is that as long as the omissions have not been corrected, the company will not be able to register any kind of contracts, powers of attorney, Board of Directors elections, among others.
- Fines for non-compliance with the provisions of the law and regulations range from US $ 100.00 to US $ 1,500.00.
These and other knowledge have been useful to make the final beneficiary declarations of the clients of Alvarado y Asociados, in a timely manner, avoiding the imposition of administrative sanctions and fines on companies and we hope it can be useful for our readers, since non-compliance could affect the image of the company, the development of its activities and lead to unnecessary expenses.
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If you want more information about it, do not hesitate to contact us.