The amendments submitted to the governing Saeima provide for a number of changes that will affect the transparency of data for companies, associations and other legal persons:
- Concealment of information in the central UBO register - if open access to UBO data creates a disproportionate risk (for example, fraud, extortion or violence), the Enterprise Register (ER) will be able to impose restricted access to this information in accordance with a proven legitimate interest;
- Verification of data accuracy - the structures responsible for the central register will be obliged to regularly check the submitted information to ensure its compliance, accuracy and timely updating;
- Supplementing ownership and control data - the ER will record the nationality of all UBOs and indicate the exact scope of control, not only its type;
- Protection of participant status - information on persons who are shareholders of a capital company as UBOs will be restricted in cases where this status results from direct or indirect ownership rights.
These measures strengthen data security and reliability while ensuring public access to essential information for safeguarding financial transparency and the rule of law.
HOW THIS WILL AFFECT COMPANIES AND SOCIETY AS A WHOLE
For companies and sole traders, the amendments will mean greater security and clarity - information about owners and controlling persons will only be publicly available if it does not threaten the person’s safety or rights. Meanwhile, society will retain access to the data essential for monitoring financial transparency and preventing money laundering.
The improved registration and verification procedure will help identify UBOs of companies more accurately, which is crucial for banks, supervisory authorities and entrepreneurs operating in international markets.
Main benefits:
- Latvia aligns its legislation with EU Directive 2024/1640. The directive provides a balance between public access to UBO data and personal data protection;
- UBO data may be hidden in the public register if there is a proven security risk. Therefore, it is important to update this data regularly - this ensures transparency, reduces the risk of non-compliance and strengthens trust in cooperation with partners, investors and state institutions. UBO and ownership data are available on the ER website, where one can view company data, shareholders, board members and other UBO information. If the owner, share distribution or control structure changes, the company must submit an application to update the data with the ER (electronically via Latvija.lv or in paper form). UBO information must be reported immediately, but no later than within 14 days from the date the relevant information becomes known, by submitting an application to the ER;
- The ER will also record UBOs nationality and scope of control;
- The amendments improve data accuracy, verifiability and protection while maintaining financial transparency.
HOW THE SUBJECTS OF THE LAW WILL BE ABLE TO ACCESS INFORMATION ABOUT UBO
After the announcement of the amendments, many obliged entities expressed concerns about how they will be able to fulfil customer identification (KYC) obligations if UBO information is classified as restricted-access. The Ministry of Justice explains:
"Already now, Article 18.3, Part 2 of the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing specifies cases when information about the beneficial owner is restricted-access information - the beneficial owner has not reached the age of 18 at the time of information issuance or has limited legal capacity. In such cases the accountant requests the information from the ER in accordance with Article 11, Part 4 of the Law on Information Openness, that is, by submitting a written request to the ER, indicating the justification and purpose for which the information is needed. For example, an accountant may state that the requested information about the client’s beneficial owner is needed for client due diligence in order to identify or verify the beneficial owner.
In exactly the same manner, the accountant will be able to request information from the ER about a beneficial owner who, due to an existing threat, has been assigned restricted-access status.
The aim of the amendments submitted to the Saeima is to restrict access to information about beneficial owners in individual cases in order to balance the publicity of beneficial owner information with the beneficial owner's right to safety. The overall procedure for accessing ER-registered beneficial owner information is not being changed, and this information will remain freely available."
The implementation of Directive (EU) 2024/1640 in Latvia marks a significant step towards improving financial transparency. The amendments help balance the public’s right to know who owns companies with individuals’ rights to privacy and security. It is a modernised approach that strengthens trust in the financial system and reduces risks of its use for criminal purposes. The amendments must still be approved by the Saeima before they can enter into force.
Author: Lonija Grīnfelde, Marketing Specialist
