The obligation to register beneficial owners in Norwegian companies comes into effect today, 1 October 2024
Since 1 November 2021, legal entities have been required to identify and maintain documented, up-to-date information about their ultimate beneficial owners (UBOs). As of 1 October 2024, Norwegian entities must also register their UBOs in the Brønnøysund Register pursuant to the Norwegian Act on the Beneficial Owners Registry. This means that entities must report who ultimately controls and/or owns the entity to the authorities. There is a phase-in period of 10 months, with the final registration deadline being 31 July 2025. After this date, companies that fail to register may be subject to coercive fines.
The establishment of the UBO register has been delayed due to a ruling by the European Court of Justice (joined cases C-37/20 WM and C-601/20 Sovim) that necessitated changes to the register to comply with privacy obligations.
The UBO register is now established to ensure transparency about actual ownership in Norwegian businesses and to provide information about individuals who control these entities. Increased transparency is crucial in combating money laundering, terrorist financing, and economic crime.
Who is covered by the legislation?
More than 500,000 companies and other legal entities in Norway are covered by the law, as well as all new companies to be established going forward. The registration obligation applies to various entities, including limited liability companies (AS), public limited companies (ASA), partnerships, cooperatives, certain business foundations, and trustees of foreign trusts operating in Norway, including Jan Mayen and Svalbard.
Trustees of foreign trusts and similar legal arrangements will be considered to be operating in Norway if (i) they are subject to customer due diligence measures under the Money Laundering Act or (ii) they acquire real property in Norway. An example of foreign trusts that will be subject to registration in the register are trusts that have a bank account in Norway. As a result of the customer relationship with a Norwegian bank, the trust will be subject to customer due diligence measures by a Norwegian reporting entity.
Exemptions from the duty to register apply to listed companies, non-commercial associations, mutual funds, state and municipal enterprises, and estates of deceased and bankrupt persons.
It is important to note that the exemption for listed companies does not apply to their subsidiaries, including wholly owned ones. Also, companies listed on multilateral trading facilities (MTFs) such as Euronext Growth and Nasdaq First North are not exempt. If there are direct or indirect owners with more than 25% of shares or voting rights in such companies, these must be registered.
There are also specific rules for Norwegian-registered foreign entities (NUFs). If the foreign parent company is required to register information about beneficial owners in another EEA state, and the NUF has these details recorded in a foreign register, the entity can instead register the name and internet address of the register where the beneficial owners are recorded.
UBO Definition
UBO is one or more individuals who ultimately own or control the registering entity, either directly or indirectly. These individuals can be either Norwegian or foreign.
The entity itself is responsible for determining whether it has beneficial owners based on whether direct or indirect owners meet one or more of the following criteria:
- Owns more than 25% of the company
- Controls more than 25% of the voting rights
- Has the right to appoint or dismiss more than half of the board
- Has influence or control in other ways, such as through a shareholder agreement
Indirect beneficial owners are individuals who own or control the business through one or more intermediary companies. To be considered an indirect beneficial owner, the individual must own or control 50% or more of the intermediary companies, and the intermediary company must control more than 25% of the registering entity. Note that this differs from the definition of a beneficial owner under the Norwegian Anti-Money Laundering Act, which we will address in more detail in a subsequent newsletter targeted at reporting entities.
The legislation also contains particular rules relating to who can be identified as beneficial owners in foundations and foreign trusts and similar legal arrangements.
Identification and Registration
To identify UBOs, the entity should gather information from founding documents, articles of association, shareholder registers, and any agreements regulating ownership and voting rights.
The basis for identification must be documented clearly to enable traceability and understanding of why specific individuals have been identified as UBOs by the registering entity. The entity may also be required to provide this documentation to authorities and financial institutions upon request.
The information about identified UBOs, or whether there are none or they cannot be identified, must be registered electronically in Altinn using the form "Registration of Beneficial Owners (RRH-0100)." Necessary information includes personal details such as full name, personal identification number or D-number, residence, and all citizenships. In addition, the entity should inform on how the UBO exerts control over the entity, including type of control, as well as ownership percentages specified in intervals.
The entity must ensure that this information is accurate and kept up to date. Any changes, such as changes in ownership or control, must be updated without delay and within 14 days from when the entity becomes aware of such changes. This necessitates that entities establish robust policies and procedures to ensure compliance with this obligation.
Responsibility and Sanctions
The management of the registering entity is responsible for ensuring proper registration of beneficial owners. It may also be appropriate to coordinate routines for identifying and registering beneficial owners at the group level to avoid duplication of work.
Failure to register can result in fines or up to one year of imprisonment, along with a coercive fine that accrues daily until the necessary registrations are completed.
Access to Information
Information about registered beneficial owners will be accessible to entities obligated under the Norwegian Money Laundering Act, public authorities, media, civil society organizations, and higher education institutions.
Registration deadline
It is important for all entities required to register to begin the process of identifying and registering their beneficial owners well ahead of the deadline on 31 July 2025.
Should you have any questions or require assistance in identifying your company’s beneficial owners, please do not hesitate to contact us. Our team is prepared to assist you in the preparation and submission of the required information.