Law On Central Register Of Beneficial Owners Adopted

On 25 May 2018, the Serbian Parliament adopted the Law on the Central Register of Beneficial Owners ("Off. Gazette No. 41/18) at the proposal of the Ministry of Economy to the Serbian Government. The main purpose of the Law is compliance with Chapter III of Directive (EU) 2015/849 of 20 May 2015. The Law entered into force on 8 June 2018.

The Law introduces the obligation to register data on beneficial owners for the majority of Serbian legal entities ("Beneficial Owners") at the newly created Central Register. The types of legal entities that fall under this requirement include, inter alia, branches and representative offices of foreign companies and business associations operating in Serbia ("Registered Subject"). The Law defines a Beneficial Owner as, inter alia, a natural person who participates in the capital of the legal person with a stake of twenty-five (25) per cent or more; or has a dominant position in conducting business activities; or who provides funds to a company that entitles him/her to influence the decisions of managing bodies; or who is a founder, settlor, trustee or beneficiary of a trust or other entity of foreign law. If none of the required criteria above is fulfilled, the Beneficial Owner shall be considered as the natural person who is the registered representative of the Registered Subject. All data on Beneficial Owners is kept permanently with the Central Register, whereas Registered Subjects are obliged to keep such documents and data for a period of ten (10) years.

The main objective of this law is to improve the existing system of detecting and preventing money laundering and financing of terrorism and the harmonization of domestic legislation with international standards in this area.