How does a foreign owner disclose the ultimate beneficial owner of a Ukrainian company?

Why the beneficial owner is disclosed

Every Ukrainian legal entity has to tell the state who actually controls it. These details go into the Unified State Register (Єдиний державний реєстр, ЄДР) together with a document called the ownership structure (структура власності). For a company with a foreign owner, this is one of the most important stages of registration, because documents from abroad raise the most questions here. How the company itself is set up is covered in the article on opening an LLC.

Two parties look at this information. The state registrar enters it into the register. Banks, for their part, check the beneficial owners of their corporate clients under financial monitoring rules, so a clear structure matters for the company's bank account as well.

Who the ultimate beneficial owner is

Law No. 361-IX on preventing money laundering defines the ultimate beneficial owner (UBO, in Ukrainian кінцевий бенефіціарний власник) as an individual who exercises decisive influence, in other words control, over the company. Influence can be direct or indirect, and the law treats both as relevant.

Who cannot be the beneficial owner

Some people formally hold a share and still cannot be named as the UBO. The law expressly excludes commercial agents, nominee owners and nominee holders, and people who act only as intermediaries. You therefore cannot put a nominee director or a trusted person in place of the real owner. Banks pay particular attention to this point during their checks.

Sometimes no individual meets the criteria of decisive influence. In that case the company enters into the register a statement that it has no UBO, and the ownership structure has to justify that answer. Having no UBO and "UBO not established" are two different things.

Ownership structure

This document traces the chain of ownership of the company all the way to the individuals at the end of it. Its form and content were approved by the Ministry of Finance. It has two parts:

Details in the table and on the diagram must match each other and the company's other documents.

With a foreign owner, the chain often runs through foreign companies. Each of them has to be described in the structure. For a foreign corporate founder, you also file an extract from the register of the country where it is registered.

• a table with details of every participant in the chain;
• a diagram of the structure.

Documents for a foreign beneficial owner

For a foreign UBO you file a notarised copy of a document that proves identity and confirms all of their citizenships. A person with several citizenships files copies of all their passports. The law limits how long before filing the copy may have been certified, so it makes sense to prepare it closer to the registration date.

Documents issued abroad are legalised or apostilled and then translated. The article on apostille and legalisation explains how. Details of foreign UBOs who have no Ukrainian tax number are entered into the register on the basis of the documents filed, without checks against state registers.

Here is what each link in a typical foreign-owned structure requires:

When to update the details

Annual confirmation of UBO details was abolished by Law No. 2571-IX, in force since the end of 2022. It was replaced by a standing duty to keep the details current. When the UBO or the structure changes, the company files the changes with the register within the period set by Law No. 755-IV. Participants are obliged to give the company the information it needs about such changes.

An application for changes can be filed electronically with a qualified electronic signature. Documents from abroad still have to be in certified form.

For a foreign owner, this means that changes in the chain abroad may also require an update in Ukraine. A sale of a stake in the parent company is one example. Many websites still describe an annual confirmation, but that requirement no longer applies.

Liability

Failing to file UBO details, or filing them late, makes the company's director liable under the law. Separately, banks check the beneficial owners of the companies they serve under financial monitoring rules. If the structure is opaque, a bank may refuse to serve the company. Opening an account is covered in the article on an account with a Ukrainian bank.

Lawyer's experience

With foreign participants, the ownership structure most often holds up registration because of documents from parent companies. Extracts come from several countries, each needs an apostille and a translation, and all of them must be recent at the same moment. So we start by drawing the structure together with the client and listing the documents needed for every link.

My second piece of advice concerns changes. Foreign owners often reorganise the group abroad and forget that this affects the Ukrainian company. I recommend telling your lawyer about every change in the chain of ownership so that the register can be updated in time.

If your company has foreign participants, at a migration law consultation we will help describe the ownership structure. For a general overview, see the guide to business for foreigners.

Frequently asked questions