Company registration services will be available only after entry in a new register - the term starts from 20.03.2024. | Ashton

This applies to lawyers/law firms, accountants, consultants, etc.

On February 16, 2024, the new Regulation No. H-1 on the conditions and procedure for entering persons in the register under Article 9b of the Anti-Money Laundering Measures Act (AMLA) was promulgated. (ЗМИП).

Anyone offering company registration services, providing a registered office address, etc. is required to register with the register maintained by the Ministry of Justice, otherwise they will not be able to continue these activities.

The Regulation comes into force on 20 March 2024 and persons carrying out the listed activities have two months from entry into force to register.

And what are the areas that fall under the new regulation?

The following activities are exhaustively listed in the Ordinance, and if any of them is carried out on a professional basis, the person must be entered in the register:

• Provision of a registered office address, correspondence address, office and/or other similar services for the purpose of registration and/or operation of a legal person or other legal entity;

• Services for establishing, registering, organizing and/or managing a trader or other legal entity;

• Trust services for an estate or person referred to in item 2, including:

a) holding or arranging for another person to hold the office of director, secretary, partner or other similar office in a body corporate or other legal entity;

b) executing or arranging for the execution by another person of the office of trustee - in the case of trusts, trustee funds and other similar foreign legal entities established and existing under the laws of jurisdictions permitting such forms of trust ownership;

c) acting as, or arranging for another person to act as, a nominee shareholder in a third foreign legal person or other legal entity, other than a company whose shares are traded on a regulated market, to which disclosure requirements apply in accordance with European Union law or equivalent international standards.

Entry is a condition for carrying out the above activities.

Requirements for entrants:

The requirements for persons to be enrolled are also specified. The person must:

• has not been convicted of any intentional crime of a general nature, unless rehabilitated;

• has not been a member of a management or supervisory body or an unlimited partner of a company which is the subject of insolvency proceedings, or of a company which has been wound up by reason of insolvency, during the two years preceding the date of the decision declaring the company insolvent, if there are unsatisfied creditors; if a period of five years has elapsed since the company was wound up by reason of insolvency, the specific circumstances and the lifting of the restrictions shall be expressly stated;

• does not fall within the restrictions on holding a senior management position under Article 124 of the AML/CFT Act or Article 15 of the Terrorist Financing Measures Act (TFMA);

• is not disqualified from holding a position of material responsibility;

• on the basis of the evidence gathered about him above, there is no reason to doubt his reliability and suitability.

The requirements shall also apply to a person who is a procurator, manager, member of a management or supervisory body, partner, beneficial owner of the legal person or other legal entity carrying out the relevant activities.

Persons who are not Bulgarian citizens shall attach to the application a criminal record certificate or other similar document, as well as an official document that the person does not fall within the restrictions for holding a senior management position under Article 124 of the MIPA.

Request for the procedure:

The registration and deletion of circumstances shall be provided as an electronic administrative service. This means that the model application must be signed with an advanced or qualified electronic signature.

The registration is carried out within 14 days of the application and a state fee will be charged for the service.

Sanctions:

Persons who carry out the activities referred to in Article 4, item 16 of the MIPA without being entered in the special register may be subject to fines of up to BGN 10 000 for natural persons or pecuniary sanctions of up to BGN 20 000 for legal persons. In case of repeated infringements, the penalties are up to BGN 20 000 for natural persons and up to BGN 50 000 for legal entities. For serious or systematic infringements, penalties may reach up to BGN 2 000 000.

The KGK team has extensive experience in the implementation of the Anti-Money Laundering Act, drafting documents under the Act and resolving complex cases under the Act. Should you require legal assistance in this regard, please do not hesitate to contact us.