The U.S. Demands Full Transparency: Who Are the Beneficial Owners of Companies?

A beneficial owner is any individual who directly or indirectly owns or controls a significant stake in a company, typically at least 25% of the shares or voting rights. Identifying these individuals is crucial for promoting corporate transparency, combating illicit schemes, and adhering to international regulations, such as those set forth by FATF.

With the new U.S. regulation:

• The identities of beneficial owners must be documented.
• A more transparent global trade environment is fostered.
• It helps curb the use of companies for illegal purposes like money laundering.

Information Required by FinCEN:

• Full name of the individual.
• Date of birth.
• Current residential address.
• Taxpayer Identification Number (TIN) or equivalent.

This regulation impacts both domestic entities and foreign companies operating in the U.S. It’s essential to assess how this will affect your business.

The impact of this new regulation will be profound, particularly for 'paper-only' companies that previously operated under partial anonymity. Beginning in 2024:

• Every company must complete the registration of beneficial owners with FinCEN.
• Non-compliance could result in steep fines and even potential criminal liabilities.
• New businesses must register this information upon incorporation, while existing entities have a limited timeframe to comply.

What types of companies are exempt?
Some entities, such as large corporations that are already subject to strict public audits, may be exempt from this regulation. However, most small and medium-sized businesses will need to comply. It is critical to consult a legal expert in international corporate regulations to ensure compliance.

Meeting this new regulatory requirement may seem challenging, but with proper guidance, the process becomes manageable. If you own or plan to establish a company in the U.S., here are the key steps:

1. Identify your beneficial owners based on the criteria (share ownership, direct or indirect control).
2. Collect the required information, including full name, residential address, and taxpayer identification number.
3. Submit the data to FinCEN within the mandated timeframe. Existing companies will have one year to complete the registration, while new businesses must do so upon incorporation.
4. Keep the information updated. Any changes to beneficial owners must be reported within 30 days.
5. Seek assistance from a specialized legal team to ensure the entire process is in compliance with the law.

At Limitless Legal, we specialize in advising on beneficial owner registration and regulatory compliance, helping you avoid costly mistakes.

• Panamanian companies holding assets or investments in the U.S. will be subject to this regulation.
• Resident agents in Panama will face increasing responsibilities in collecting information on beneficial owners.
• If you rely on legal services for company formation in Panama, ensure you work with a team that understands these new international regulations.

• Correctly register the final beneficiaries.
• Update information according to regulations.
• Comply with international regulations while optimizing the legal elements of your operation.