News on Central Register of Beneficial Owners

The Ministry of Economy of the Republic of Serbia published the Draft Law on Amendments to the Law on Central Records of beneficial Owners (the “Draft“) on its official website.

The Central Register of beneficial owners is regulated by the Law on the Central Register of beneficial owners (“Official Gazette of the RS”, No. 41/2018 and 91/2019, the “Law“), which was passed in 2018.

Central records are a public, unique, central, electronic database of natural persons who are the beneficial owners of legal entities and other persons registered in the Republic of Serbia (the “Registered Entities“).

The central records are kept by the Business Registers Agency of the Republic of Serbia, according to the Law, the following are obliged to record data on beneficial owners:

• companies, except public joint stock companies;
• cooperatives;
• branches of foreign companies;
• business associations and associations, except for political parties, trade unions, sports organizations and associations, churches and religious communities;
• foundations and endowments;
• institutions;
• Representative offices of foreign companies, associations, foundations and endowments.

The Law does not apply to companies and institutions in which the Republic of Serbia, an autonomous province or a unit of local self-government is the only member or founder.

In order to improve the conditions for starting a business, the Draft stipulates that in case of establishing a Registered Entity electronically, the founder is considered an authorized person to record data on the beneficial owner, so that it is possible to register the beneficial owner in the Central Register of beneficial owners.

If the founder does not use this opportunity, the obligation of the person authorized to represent remains to make an entry in the Central Register of beneficial owners within 15 days from the day of occurrence of the grounds for registration from the Law.

As the founder will be able to electronically register the beneficial owner in the process of establishing the Registered Entity electronically, it was necessary to prescribe his responsibility.

The key goal to be achieved by adopting the proposed amendments to the current Law is to achieve progress in improving business conditions, i.e. obtaining the maximum number of points and improving the rank of the Republic of Serbia in this area on the World Bank list when preparing the next report, which is in line with the Program. for improving the position of the Republic of Serbia on the ranking list of the World Bank on business conditions – Doing Business for the period 2020-2023 with the Action Plan.

In addition to the above, the goal to be achieved by adopting the proposed solutions is to in one step in the electronic establishment of Registered Entities make an entry in the competent register and register the beneficial owner in the Central Register of beneficial owners, without having to wait (e.g. five working days). for the registration of the establishment of a limited liability company) to be entered in the competent register, so that the person authorized to represent the Registered Entity can record the data in the Central Register.

Bearing in mind that currently of all Registered Entities, only limited liability companies can be established electronically, it is expected that in the first year of application this option will be used by about 10% of Registered Entities, and when exclusive electronic registration of all other Registered entities , it is expected that the percentage of those who use this opportunity will be significantly higher.