Implementation of the register of beneficial owners

Entities will be able to register information about their beneficial owners on a voluntary basis from 1 October 2024. From 31 July 2025, it is mandatory to register information about beneficial owners in accordance to the Act on Register of Beneficial Owners. The establishment of the register and the obligation to register will have practical significance for many entities.

Background

The Act on the Register of Beneficial Owners entered into force in November 2021. Since then, the Act has obliged most entities operating in Norway to obtain information about which natural person(s) ultimately owns or controls the entity (so-called beneficial owners). The register is now being established, which gives the entities the opportunity – and later the obligation – to register the information about their beneficial owners. The register shall be maintained by the Brønnøysund Register Centre.

The purpose of the register is to facilitate the access to information about beneficial owners for entities subject to reporting requirements under the Money Laundering Act, authorities and others. Information about underlying ownership and control is considered a key instrument to prevent legal persons and entities from being used for money laundering, terrorist financing and other crime. There has been an increasing national and international focus on such prevention. By making information about beneficial owners accessible, it becomes more difficult to conceal illegal activities behind complex company structures.

Who is the subject to the registration requirements?

Most entities operating in Norway will be subject to the registration requirements, i.e. have a duty to collect and register information about their beneficial owners. The following are subject to the registration requirements under the Act:

• legal persons registered in Norway (including private and public limited companies),
• entities and other associations conducting business or are registered in Norway, and
• trustees of foreign trusts and similar legal arrangements that conduct business in Norway. This applies regardless of whether the trustee or the legal arrangements have a duty to register in the Norwegian register. In all cases, trustees are considered to conduct business in Norway if they (i) are subject to customer due diligence measures from a Norwegian reporting entity (e.g. if a bank operating in Norway subjects the trustee to KYC), or (ii) if the trustee acquires real estate in Norway on behalf of the trust or arrangement. This means that a trustee of foreign trusts and legal arrangements that is subject to customer due diligence measures or buys real estate in the name of the arrangement is subject to the registration requirements under the Act.

However, exemptions from the registration requirements for certain legal persons and entities have been set out in the Regulation. The most practical exceptions are:

1. associations not engaging in business activities and not subject to accounting requirements,
2. foundations covered by the Foundations Act (which do not engage in business activities with a controlling influence over business activities outside the foundation),
3. securities funds established in accordance with the Securities Funds Act, health trusts, the state, county authorities, municipalities, state-owned enterprises and municipal enterprises,
4. entities subject to registration with ownership shares admitted to trading on a regulated market in an EEA state or other state with equivalent international standards that ensure sufficient access to information on ownership. Instead, these entities are required to register information on the name, home country and internet address of the regulated market or trading venue where information about the ownership of the entity subject to registration is available. The fact that only regulated markets are exempt implies that companies listed on multilateral trading facilities – such as Euronext Growth – are not covered by the exemption and thereby subject to the registration requirements, and
5. Norwegian-registered foreign business (NUFs) that are obliged to register information about beneficial owners in a register in another EEA state. Instead, they must register the name and internet address of the register where beneficial owners are registered.

What are the obligations of entities subject to the registration requirements?

Identification of beneficial owners, collection and storage of information

The entity subject to the registration requirements must identify its beneficial owners, as well as document the basis for the identification. Beneficial owners are the natural person(s) who ultimately own or control a legal person, arrangement, entity or other association – i.e. the underlying owners or those who exercise control over the entity. If the entity subject to the registration requirements believes that there are no beneficial owners or these cannot be identified, this assessment must also be justified and documented.

The obligation to collect and store information is limited to beneficial owners who meet one or more of the following conditions:

• Owns more than 25 per cent of the ownership shares in the entity subject to the registration requirements.
• Controls more than 25 per cent of the voting rights in the entity subject to the registration requirements.
• Has the right to appoint or relieve more than half of the board members of the entity subject to the registration requirements.
• In any other way, exercise control over the entity subject to the registration requirements. An example of this is guardians of persons who are beneficial owners.

In the case of intermediate businesses ("company chains"), it must be assessed whether there are beneficial owners on the basis of indirect ownership. In order to be a beneficial owner, the person must indirectly control more than 25 per cent at the first level (i.e. in the entity subject to the registration requirements), and then have indirect control of 50 per cent or more at subsequent levels (i.e. in intermediate businesses).

Entities subject to the registration requirements are obliged to obtain information about their beneficial owners, as well as "without delay" and no later than within 14 days update this in the event of changes. It is the board that has this responsibility.

Information must be collected and stored about the beneficial owners' full names, national identity number or D-number (or date of birth), country of residence and all citizenships. Information must also be collected and stored on the percentage of ownership shares and voting rights held by beneficial owners.

Beneficial owners may be identifiable on the basis of the entity subject to the registration requirements' own documents, such as the memorandum of association and articles of association, the register of shareholders and shareholders' agreements. However, the preparatory works of the Act point out that underlying information that is not publicly available – such as shareholder agreements – will not need to be uploaded to the register. It will only be necessary to state that such agreements exist and that there are beneficial owners on this basis.

Any person who can reasonably be assumed to have information of importance for the entity's identification of beneficial owners, including the person about whom information is to be registered, is obliged to disclose such information. However, this duty of disclosure is limited by the statutory duty of confidentiality, as the rules on the duty of disclosure have only been adopted as regulations, and provisions in regulations are inferior to provisions in legislation.

Upon request from public authorities, or from reporting entities that carry out customer due diligence measures and ongoing supervision pursuant to the Money Laundering Act, the entity subject to the registration requirements is obliged to disclose all information and assessments.

Registration in the register of beneficial owners

Entities subject to the registration requirements must register information obtained about beneficial owners in the register established in the Brønnøysund Register Centre. The basis for the identification must also be uploaded. As previously mentioned, the register will be opened for registration from 1 October 2024, and the registration obligation will commence on 31 July 2025.

If the entity subject to the registration requirements finds that there are no beneficial owners in the legal person, entity or association, or the foreign legal arrangement, this must also be registered. The same applies if the entity subject to the registration requirements believes that there are one or more beneficial owners, but is unable to identify these.

The first registration must take place no later than 14 days after the person subject to the registration requirements has been registered in a public register. Once the entity subject to the registration requirements has identified new beneficial owners, registered information must be updated without delay and no later than within 14 days. The same applies if the entity subject to the registration requirements becomes aware of other changes that result in registered information no longer being correct.

The entity with the registration requirements is responsible for notifying beneficial owners that the information has been registered in the register of beneficial owners. The notice may be given in connection with the collection of such information.

Access to registered information

Currently, only public authorities, the media, civil society organisations, higher education institutions, public authorities and entities subject to reporting obligations under the Money Laundering Act will have access to the information in the register of beneficial owners.

Furthermore, regulations may stipulate that other persons shall or may be granted access to the registered information. The Ministry is currently working on a consultation document with proposals for such amendments to the Regulation. The Ministry may also issue regulations on exemptions from access to the information in individual cases under extraordinary circumstances. Further rules will also be laid down on access to the information, including on what information is to be made available, who is to be given access to information in the register, and to what extent, for what purposes and in what way the information is to be provided.

Sanctions and punishments

Failure to comply with the registration requirements will initially lead to an order directed against the person subject to the registration requirements, the board, the general manager or others with the right of representation. If the deadline is not met, a coercive fine may be imposed until the matter has been resolved.

Intentional failure to collect, store or register information, as well as registration of incorrect information, can be punished with fines or imprisonment of up to one year.

What does your company need to do now?

Entities subject to the registration requirements are already obligated to obtain information and documentation about their beneficial owners. If you are subject to the registration requirements and do not currently have such information, it is therefore important to initiate the work of obtaining information about the company's beneficial owners.

• The company should be sure of the following:
• That the company has identified any beneficial owners.
• That the company has documented the assessment of whether there are, and if so, who, are the beneficial owners, in addition to making sure that there are no other beneficial owners than those who have been already documented.
• That the company follows up foreign owners in particular if it – based on previous experience – is difficult to obtain information from them.
• That the documentation is stored in a proper manner and in accordance with the data protection regulations.
• That the company has sufficient procedures and systems to detect changes in its beneficial owners and that it is reported correctly. This should be seen in context with other regulations, such as company law, stock exchange legislation and tax legislation, which require the collection of information about owners of the company.
• That the registered information is in accordance with information provided in connection with customer due diligence pursuant to the Money Laundering Act, or that one is prepared to answer why the information does not match.

Further process

From 1 October 2024, entities subject to the registration requirements will be able to register information about their beneficial owners in the register established in the Brønnøysund Register Centre. The obligation to register the information will enter into effect on 31 July 2025. The Ministry of Finance is also working on a consultation paper on amendments to the Regulation, which will lay down more detailed rules on access to the information in the register. This must also be seen in the context of a number of other initiatives on transparency about ownership in companies. Thommessen follows these processes closely and can answer any questions you may have.