Initial beneficial owner registration

Entities that are required to carry out the initial registration of their beneficial owner.

The legal obligation to register the beneficial owner rests with reporting entities, legal persons registered in the Republic of Albania, as follows:

• limited liability companies;
• joint-stock companies;
• partnerships;
• limited partnerships;
• representative offices and branches of foreign companies;
• credit unions and their unions;
• Societies of Mutual Cooperation;
• Agricultural cooperation societies;
• any other legal entity which is required by law to register with the QKB;
• non-profit organizations, including foundations, associations, centers, as well as branches of foreign non-profit organizations, registered in the register of non-profit organizations in the Republic of Albania;
• legal entities and enterprises whose shareholders, in addition to the central and/or local institutions of the Republic of Albania, also include other Albanian and/or foreign individuals or legal entities.

Excluded from this obligation:

• natural persons, traders registered in the commercial register;
• religious communities;
• political parties
• Legal entities and enterprises: with shareholders or a sole partner being the central and/or local institutions of the Republic of Albania; owned by the central and/or local institutions of the Republic of Albania; and having no individual owning 25% or more.

What should be considered for the identification and initial registration of the beneficial owner?

During the initial registration of the beneficial owner of the reporting entity, whether it is registered in the Commercial Register or in the Register of Nonprofit Organizations, the definitions set forth in Law No. must be taken into account. 112/2020 and VKM No. 1088/2020, Among which, the following terms apply:

“Beneficial owner” is the individual who ultimately owns or controls a legal person, through direct or indirect ownership of a sufficient percentage of the shares or voting rights or participation in the capital of that entity, including through holding shares, or through control by other means, or benefits from transactions carried out by the legal person on his behalf.

The founder, legal representative, or individual who exercises ultimate effective control over the administration and control of nonprofit organizations, including foundations, associations, centers, and branches of nonprofit organizations. Ultimate effective control is the relationship in which a person:

• determines the decisions made by the nonprofit organization;
• controls in any way the selection, appointment, and removal of the majority of the decision-making and/or executive bodies of the nonprofit organization.

If control is exercised through a trust, you must identify and register as beneficial owner:

• Creator;
• the guardian/trustee;
• the guardian, if any, and
• the beneficiaries, or where the persons who benefit from the legal arrangement or entity have not yet been determined, the class of persons whose primary interest the legal arrangement or entity was created or operates for.;
• or any other individual who exercises ultimate control over the trust, whether through direct or indirect ownership or by other means.

“Direct ownership” is ownership held by an individual of 25% or more of the shares/quotas of capital or ownership interests in a reporting entity.

“Indirect ownership” is ownership held or control exercised by the same individual in one or more legal entities, which individually or together hold 25% or more of the shares/quotas of capital or ownership interests in a reporting entity.

“Trust” is a fiduciary arrangement in which ownership is held by the trustee for the benefit of the beneficiary.

“Type of control” means control or ownership in a legal person, trust, or other legal arrangement.

“Initial registration” is the first registration of the beneficial owners of reporting entities, in accordance with the provisions of the law on the beneficial owners register.

“Record of Changes” is the registration of any factual change of a person previously registered as a beneficial owner under the law on the beneficial owners register (replacement, addition of a new person, or removal of a person from the beneficial owners register), as well as the registration of any other changes to the registered beneficial ownership data.”

When is the initial registration of the beneficial owner's data carried out?

Reporting entities that are required to register beneficial owners are those entities registered in the commercial register and the register of nonprofit organizations.

In the case of the initial registration of beneficial owners by reporting entities that are registered in the commercial register, the registration is carried out simultaneously with the application for the registration of the legal entity in the commercial register, via a single form, which is submitted in accordance with the relevant legislation governing registration procedures.

In cases where the application for the initial registration of beneficial owners by reporting entities, who are registered in the commercial register with indirect ownership, is refused, registration shall be completed within 40 (forty) calendar days from the date of refusal of the application.

In cases of the initial registration of beneficial owners by reporting entities that are registered in the register of nonprofit organizations, registration shall be completed within 40 (forty) calendar days from the date the reporting entities are registered as legal persons.

How is the initial registration of data for beneficial owners carried out?

For reporting entities registering in the commercial register, the initial registration of beneficial owners is carried out simultaneously with the application for the legal entity's registration in the commercial register, via a single form submitted in accordance with the relevant legislation governing registration procedures.

For reporting entities registering in the register of nonprofit organizations via the electronic portal on e-Albania:

The application for the initial registration of beneficial owner information is made by the person authorized to represent the reporting entity through the electronic portal, on e-albania, after electronically identifying and using a qualified electronic signature certificate, in accordance with the provisions of the applicable legislation on electronic signatures.

After authentication, the person authorized to represent the reporting entity accesses the electronic portal and, for the type of registration required, selects the application for initial registration of the beneficial owner, according to the relevant category. The computerized system displays the relevant application form and opens the electronic file, which contains the corresponding case number.

After selecting the application for initial registration of the beneficial owner, the general information (NUIS/NIPT; name, legal form; legal representative) of the reporting entity, as recorded in the Non-Profit Organizations Register, will be automatically transferred to the Beneficial Owners Register.

Furthermore, the person authorized to represent the reporting entity proceeds to electronically complete all mandatory beneficial owner information for the form and to upload the necessary supporting documentation verifying the beneficial owner information recorded. The initial registration application form includes several instructions marked with an asterisk (*), which must be followed when completing it.

After the person authorized to represent the reporting entity verifies that the data entered on the form and the accompanying documents uploaded to the electronic file are accurate, they confirm them using electronic means that guarantee the authenticity of origin and the integrity of the documents' content in electronic format, at least by means of an advanced electronic signature of the application form, in accordance with the provisions of the applicable legislation on electronic signatures.

After the electronic confirmation of the application, the computerized system automatically issues a confirmation of its submission through the electronic portal, which includes the number automatically generated by the system (the case number), allowing the applicant to track the status of the registration process at any time.

The computerized system also notifies the person authorized to represent the reporting entity by the email address registered on the e-Albania single government services portal, sending electronic copies of the completed application form and of the application submission confirmation from the electronic portal.

Upon issuing the confirmation of application completion, the computerized system forwards the application and its accompanying documents, in electronic format, to the authorized QKB officers (registrars) for review and decision-making.

Mandatory data on beneficial owners

When the reporting entity is registered with the commercial register:

1. Identification data of the beneficial owner, who may be an Albanian citizen, a foreign national, or a refugee/stateless person:
a) for Albanian citizens:

• first name and last name;
• personal identification number;
• date of birth;
• citizenship;
• Permanent residence address.

b) for foreign nationals:

• first name and last name;
• personal identification number;
• date of birth;
• passport number and issuing state;
• the passport's issue date and expiration date;
• citizenship;
• Permanent residence address.

c) for refugees/stateless persons:

• first name and last name;
• travel document number;
• date of birth;
• the state that has issued the travel document;
• the date of issue and the date of expiration of the travel document;
• Permanent residence address.

2. The date he was determined to be the beneficial owner.
3. Type and percentage of ownership: direct/indirect*

If ownership is indirect, information regarding the legal entity/trust through which the indirect ownership is held must also be provided.

• When the reporting entity is a nonprofit organization, the following information is provided:
• Beneficial owner identification data (as above)
• The date of his designation as beneficial owner
• His position in the nonprofit organization, taking into account the definition of beneficial owner in the case of nonprofit organizations and of ultimate effective control* therein.

If the founder or the ultimate effective control is a legal entity or trust, its details must also be provided.

Attached documentation to be uploaded with the application:

The accompanying document is the act by which the beneficial owners of the reporting entity and the type of ownership control are identified and recorded.

An authorized person representing the reporting entity, in the application for beneficial owner registration, shall attach as supporting documentation, in electronic format, the following documents:

• Documentation verifying the unique identification number and the name of the reporting entity;*
• Documentation verifying the beneficial owner's identification data;
• Documentation from the competent registration authority, certifying that the registered beneficial owner holds 25 (twenty-five) % or more of the shares/quotas of capital, voting rights or ownership interests, and which contains the date of determination as beneficial owner; and
• Any other documentation that the reporting entity holds for identifying and registering its beneficial owner in accordance with the law on the register of beneficial owners, if this information does not appear in the above-mentioned documents.

In the case of simultaneous registration, the same documentation required under the above provisions is submitted, with the exception of the documentation proving the unique identification number together with the date of the entity's registration in the commercial register, as well as the extract of the registered data of the reporting entity, issued in accordance with the relevant legislation governing the registration procedures in the commercial register.

The documents required in connection with this request are submitted in the same manner and in the same format as the documentation required under the relevant legislation governing procedures for registration in the commercial register.

In the event that, after exhausting all possible means of identifying the beneficial owner, and if there are no grounds for suspicion, reporting entities fail to identify as beneficial owner the individual who ultimately owns or controls a legal person, whether through direct or indirect ownership of 25% or more of the shares/shares/quotas of capital or ownership interests in a reporting entity as defined by the Law “On the Register of Beneficial Owners,” as amended, then the reporting entities must identify and record in the Register of Beneficial Owners as the beneficial owner the individual who:

• determines the decisions made by a legal person;
• controls in any manner the selection, appointment, and removal of the majority of the legal entity's decision-making and/or executive bodies.

In this case, reporting entities must maintain documentation that explains and verifies the actions taken to identify the beneficial owner in accordance with the provisions of the Law “On the Register of Beneficial Owners,” as amended, specifically also:

1. A written statement signed by the legal representative of the reporting entity, specifying exactly the steps taken to identify the beneficial owner as well as the reasons for identifying him in that position;

2. Documentation proving the control of the individual registered as the beneficial owner in the relevant capacity.

In the event that, after exhausting all possible means of identifying the beneficial owner and if there are no grounds for suspicion, reporting entities are unable to identify the individual referred to above as the beneficial owner, they must then identify and record in the Register of Beneficial Owners the individual/he person holding the position of senior manager/managers of the reporting entity. In this case, the entity must retain documentation that rationalizes and verifies the actions taken to identify the beneficial owner in accordance with the provisions of the Law “On the Register of Beneficial Owners,” as amended, specifically also:

1. A written statement signed by the legal representative of the reporting entity, specifying exactly the steps taken to identify the beneficial owner as well as the reasons for identifying him in that capacity.
2. Documentation verifying the position of the individual's most senior manager(s) registered as beneficial owner.

Additional information on the supporting documentation to be uploaded with the application.

Accompanying documents must not contain any unverified corrections or erasures, in accordance with the relevant legal provisions, and their content must be clearly visible, legible, and allow for the creation of an electronic image of the document.

Attached documents must be in Albanian. Along with the Albanian-language document, the applicant may also submit a certified translation into a foreign language. Private acts and official documents from foreign jurisdictions must be accompanied by a certified translation into Albanian and legalized in accordance with applicable laws and international agreements ratified by the Republic of Albania.

In the event of a discrepancy between the accompanying document in Albanian and the one in a foreign language, the latter cannot be asserted against third parties. However, third parties may oppose the data contained in the document in the foreign language to the data subject, except when the data subject proves that the third party was aware of the content of the document in the Albanian language.

The documentation must be prepared within 90 (ninety) calendar days from the date the request for the initial registration of beneficial owners is submitted.

The QKB's Decision-Making

Applications for initial registration of the beneficial owner are reviewed by authorized QKB officers for decision-making in the order they are submitted, after which, no later than two business days from receipt of the application, the decision is issued as follows:

• Approval
• Suspension
• Refusal

The authorized officer (registrar) of the QKB verifies:

• the identity of the signatory and the fact that they are an authorized person to make the registration;
• the completion of all data on beneficial owners required by the law for the beneficial owners register, as well as the accompanying documents;
• the submission, in the required form, of the accompanying documentation that verifies the data being recorded;
• the fact that the submitted documentation does not contain any uncorroborated corrections or deletions, in accordance with the relevant provisions, and that its contents are not clearly legible, are illegible, or interfere with the capture of the electronic image;
• if the registration of beneficial owners' data has been submitted within the legal deadlines set forth in the law on the beneficial owners' register;
• the fact of whether the administrative sanctions imposed pursuant to Law No. 112/2022, as amended, have been paid.
• the fact that the data required to be recorded are different from the recordable data, in accordance with the provisions of the law on the register of beneficial owners.

Responsibility for the accuracy and truthfulness of the facts, reported data, and accompanying documents filed in the electronic registry rests with the reporting entities and the persons authorized to make the filing, in accordance with applicable laws.

If the authorized officer (registrar) of the QKB, after the verifications according to the above points, finds that the application complies with the requirements of the Beneficial Ownership Register Law and this decision, approves the application and the completion of the registration, no later than two business days from receipt of the application from the reporting entities.

Otherwise, the application will be suspended within two days, accompanied by its respective reasons, giving the party 30 days to remedy the deficiencies.

Upon expiration of the 30-day period, the application is approved if the reporting entity corrects the deficiencies preventing registration within the applicable deadlines; otherwise, it is denied.

Upon refusal of a request, reporting entities have the right to reapply, in accordance with the law and this decision, the submission of which is treated as a new request. The submission of a new application does not relieve the reporting entity of the sanctions provided under the law on the beneficial ownership register for failure to make mandatory registrations within the statutory deadlines.

The QKB's decisions regarding the approval, suspension, or refusal of an application are notified by publication in the register. The date of notification is the date of publication in the register.

Also, the decision issued on an application is notified in writing to the person authorized to represent the reporting entity, including at the email address provided in the electronic register of the e-Albania single-window government services portal.

The sanctions provided by law for the register of beneficial owners

For cases of failure to comply within the legal deadlines by reporting entities with the obligations to carry out the initial registration and to register the actual change of the person previously registered as a beneficial owner (replacement, addition of a new person, or removal of a person from the register of beneficial owners), the fines provided for in Article 13 of the Law on the Register of Beneficial Owners shall apply.

From the imposition of a fine through its payment and the completion of mandatory registration, the QKB or the authority responsible for maintaining the register of nonprofit organizations:

• will not provide services to the reporting entity, specifically in the commercial register or the nonprofit organizations register, except for registering changes to the legal representative's data;
• will change the reporting entity's status, respectively in the commercial register or in the register of nonprofit organizations, from “active” to “suspended/passive.".

How is the transfer carried out for the purposes of Law No. 6/2022, and how are the data of entities registered before this law's entry into force recorded?

For reporting entities with direct ownership registered in the commercial register before the entry into force of Law 6/2022, by the 30th.06.2022, the QKB, in cooperation with AKSHI, transfers to the Beneficial Owners Register the beneficial owner data for directly owned reporting entities that were registered in the Commercial Register before the date the Beneficial Owners Register was established.

After the data has been transferred and verified, these reporting entities are entitled to update their owners' information with the QKB.

Reporting entities with indirect ownership and NGOs registered before the effective date of Law No. 6/2022 that have not completed the initial registration and the change of beneficial owner data must register this information by the 30th.06.2022.

For existing reporting entities that appear with suspended status in the commercial register, record the beneficial owner in the beneficial owner register before applying to change their status in the commercial register. The change of status of existing reporting entities in the commercial register is carried out after verification that their beneficial owner has been registered in the beneficial owner register.

Source: National Business Center