Legal Alerts/1 Jul 2019

The Finnish Patent and Registration Office to Begin Registering Ultimate Beneficial Owners as from 1 July 2019

Details of the beneficial owners of companies and organisations must be submitted to the Beneficial Owner Register maintained by the Finnish Patent and Registration Office (the “UBO register”) starting from 1 July 2019. The transition period for registering this information in the UBO register ends on 1 July 2020.

The obligation to keep information on and register Ultimate Beneficial Owners (“UBO”) in the UBO register applies to a broad range of companies and legal entities, including all limited liability companies, co-operatives, European companies (Societas Europea), and various forms of insurance companies and banks.

Companies listed on the main list of the Helsinki Stock Exchange are exempt from the obligation to register their UBOs in the UBO register, but e.g. companies listed on the First North marketplace must abide by the new rules. Furthermore, housing companies, mutual real estate companies, foundations, religious communities and associations do not need to submit their information to the UBO register. A notification regarding the UBOs of general partnerships and limited partnership is required only if the beneficial owner is not a partner in the company.

A UBO is defined by the Finnish Act on Money Laundering as a natural person who either owns a company or otherwise exercises control over the company. Natural persons who meet any of the following requirements are, in all cases, considered to be UBOs:

  • A person who directly or indirectly owns more than 25% of the company’s shares.
  • A person who directly or indirectly holds more than 25% of the voting rights in the company.
  • A person who exercises actual control over the company or organisation on other grounds.


Regulation aiming at preventing money laundering has been the subject of numerous legislative efforts by the European Union. The fourth money laundering directive (Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015, the “MLD IV”) introduced, inter alia, an obligation for member states to introduce regulation to identify any natural person who exercises ownership or control over a legal entity.

The regulation should ensure entities incorporated within their territory in accordance with national law obtain and keep adequate, accurate and up-to-date information on their beneficial ownership.

The directive notes that the identification and verification of beneficial owners should, where relevant, extend to legal entities that own other legal entities, and obliged entities should look for any natural persons who ultimately exercise control through ownership or through other means. Information regarding beneficial ownership must be stored in a central register located outside the company.

Implementing the regulation in Finland

Finnish regulation implementing the MLD IV entered into force on 3 July 2017. The implementation of the obligation to maintain a register of beneficial owners was postponed to 1 January 2019, and the centralised UBO register was set to open on 1 July 2019 with a deadline to register UBOs by 1 July 2020.

Consequently, e.g. all (non-listed) limited liability companies have been obliged to maintain an internal UBO register as from 1 January 2019, a fact that has likely eluded a majority of limited liability companies. The obligation to notify the Trade Register will likely prompt companies to update their internal registers and add a UBO register to the shareholder register. Board members are responsible for establishing and maintaining the internal UBO register.

Historically, limited liability companies have been obliged to maintain a register of shareholders that reflects the shareholding notified to the company, and this register of shareholders has traditionally been available to the public. However, until now, there has been no centralised register maintained by the authorities concerning shareholding in private limited companies.

This will change as from 1 July 2019 when the UBO register begins accepting registrations.  The regulation implementing the MLD IV will expand the obligation of entities to know and identify their beneficial owners to encompass not just all limited liability companies, but also e.g. cooperatives, banks and insurance companies. Concurrently, the aforementioned obligation to maintain a register of shareholders and to keep this register publicly available will remain in force.

Pursuant to the regulation, the companies concerned are obliged to actively identify any natural persons who hold more than 25% of shares or votes. In addition, companies are obliged to identify any natural persons who exercise control over legal entities holding more than 25% of the shares or votes of the relevant entity. A natural person is considered to exercise control when they hold more than 50% of the votes in the legal entity.

The government proposal concerning the implementing regulation noted that, in order for companies not to be subjected to an undue administrative burden, companies would not be expected to take active measures to identify beneficial owners in ownership chains extending beyond the legal persons holding more than 25% of shares and votes. However, companies are expected to use all information available to identify the beneficial owners.

If a company has no beneficial owners or the beneficial owners cannot be identified, the board members, managing director, general partner or other similar members of management will be registered in the UBO register. As such, companies are obliged to submit information to the UBO register even if they do not have a beneficial owner.

It is to be noted, that the information stored in the UBO register does not enjoy public credibility, i.e. the registration has no constitutive effect. Consequently the exercise of shareholder rights continues to be  based on registrations in the shareholder register, without being effected by the new UBO registration obligation.

Filing information in the register

In order to manage the costs for maintaining the UBO register, the regulation prescribes that notifications to the register can only be made by electronic (online) filing. The details registered in the UBO register are the name, personal ID code or date of birth, citizenship, home country and municipality of residence as well as the grounds for and extent of the control over or share of ownership in the UBO. The same information must also be kept in the internal UBO register maintained by the relevant entity (except for the municipality of residence).

The filing is free of charge, but the online service requires that the person submitting the notification (a board member, the managing director or a general partner or authorised person) has a Finnish personal identity code and either personal (Finnish) internet banking codes or a mobile certificate or an electronic identity card. Representatives can be authorised to file the notification, but the authorisation has to be registered through the online service. There is a possibility to file the information in paper only, if none of the persons authorised to sign the notification (a board member, the managing director, a general partner) has a Finnish personal identity code and a proper e-ID available – the paper filing is not accepted in any other circumstances.

Companies are responsible for identifying their UBOs, and the UBO register will not review or make any assessments of the UBOs in connection with the registration. Failure to register UBOs by the deadline or promptly when changes in the information concerning the UBOs occur or registering incorrect information may result in a fine or, in aggravated cases, up to three years of imprisonment.

The UBO registers (whether the register maintained internally or the centralised register maintained by the Finnish Patent and Registration Office) are not universally public (to date) in the way that e.g. shareholder registers of Finnish limited liability companies are today. Authorities and obliged entities (i.e. entities that are within the scope of know your customer and notification obligations under money laundering rules, such as banks and law firms) have access to the information in the registers. Parties requesting information from the UBO register must detail the purpose for which such information will be used.


A long-standing principle in Finnish company law (concerning private limited liability companies) has been that, while some aspects of exercising shareholder rights are conditioned on registering the shareholding with the company, owners of shares have not generally been obliged to notify the company of their shareholding. The sole exception is the obligation of shareholders to notify the company within two months if the shareholder holds all shares in the company.

The obligation imposed on all limited liability companies to actively identify shareholders (and the corresponding obligation on beneficial owners to provide information to the company in order for it to keep the UBO register up-to-date) marks a significant change to the possibility for shareholders to keep their shareholding private.

As shareholders will need to be registered in the shareholder register or identify themselves and present an account of how the shares have transferred to the shareholder to be able to exercise their voting rights and control, the question may arise as to whether the obligation to identify shareholders should have been limited to shareholders registered in the shareholder register.

Approximately 272,000 limited liability companies, 4,300 cooperatives, 9,500 partnerships and 26,800 limited partnerships had been registered with the Finnish Patent and Registration Office by the beginning of 2019. The regulation affords a mere twelve months to create a comprehensive new register that will cover the beneficial owners of all entities affected.

Companies are advised to allow some time for the new register to establish itself, but they should be taking steps to identify their beneficial owners (and establish their internal UBO registers) without delay, as the application of the regulation and the identification of beneficial owners may require extensive legal analysis.

Borenius’ lawyers are available to assist in addressing any questions you may have regarding this legal alert. Please feel free to contact any of the Borenius’ attorneys listed in this alert or those with whom you usually work.

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Additional information

Andreas Doepel

Senior Counsel, General Counsel


Juha Koponen


Helsinki, London, New York