A draft amendment to the Anti-Money Laundering Act (“AMLA”) provides for significant changes to the disclosure of beneficial owners of companies and NGOs, as well as access to information about them. It implements the requirements of Directive (EU) 2024/1640 regarding access to information on beneficial owners and provides for measures to implement Regulation (EU) 2024/1624 on the transparency of beneficial ownership. The proposals affect both companies and other entities that report their beneficial owners, as well as entities subject to the Anti-Money Laundering Act (AMLA) that use this information when verifying their clients.
More entities will be required to declare their beneficial owners
It is proposed to eliminate the existing exemptions from separate disclosure when the beneficial owner is already registered as a partner or sole owner of the capital, including in the records of Bulgarian companies within the chain of ownership. The corresponding exemption for foundations and associations whose beneficial owners are registered on other grounds is also being eliminated. Thus, the obligation will extend to many individuals who have not previously filed a separate declaration.
Exemptions will still apply to limited categories, including public-law organizations and certain companies with securities listed on a regulated market (the latter only if additional conditions are met). However, the exemption for a publicly traded company will not extend to companies that it owns or controls, either directly or indirectly.
Registration in the BULSTAT registry is also being expanded to include entities outside the EU and information about their beneficial owners where certain connections to Bulgaria exist - for example, the acquisition of real estate, the award of a public contract or concession, the acquisition of certain high-value assets, or the establishment of business relationships under the conditions set forth in the draft.
Additional documents and specific justification in cases of unidentified owners
Documents identifying the listed individuals must be attached to the beneficial owner declaration. This is a general requirement that supplements the existing obligation to submit documents proving the basis for the status of “beneficial owner.” Separately, the law requires the disclosure of information regarding nominal shareholders, partners, and directors, the persons on whose instructions they act and the beneficial owners of those persons.
When, after exhausting all possibilities, a beneficial owner cannot be identified or there are serious and well-founded doubts regarding the identified persons, an explicit statement and justification as to why the owner has not been identified will now be required. In addition, the details of senior management must be disclosed.
A 28-day deadline is proposed for the initial filing following registration and for subsequent changes, instead of the 7-day deadline applicable under the general registration procedure. Special rules for the initial filing will apply to certain foreign entities.
Separate procedures for access to information
The draft further clarifies the distinction between competent authorities, obligated entities, and persons with a legitimate interest:
- Competent authorities will have immediate, direct and free access when exercising their powers, without notifying the person being inspected.
- Obligated entities under the AMLA will receive free electronic access following a one-time request and verification of their eligibility, with a decision issued within 12 business days. They will not need to submit a separate request for each client but may use the access only for a comprehensive audit. They will be required to implement internal control procedures for authorized employees and, upon request, demonstrate the lawful use of the access.
- Persons with a legitimate interest will, as a rule, request access regarding a specific entity and must substantiate their grounds. Broader access is provided for journalists and relevant civil society organizations. The law establishes a three-year access certificate, as well as follow-up checks and procedures for denial, revocation, and appeal.
Data subjects will be able to receive information regarding inquiries made by persons with a legitimate interest, with special protection for the identity of journalists and representatives of civil society organizations. In cases of a proven security risk or other explicitly specified circumstances, access to certain data may be restricted, without prejudice to the competent authorities.
Notification of missing registrations and penalties
When, during a customer verification, an obligated entity determines that a customer does not have a registered beneficial owner, even though the law requires it, the entity must notify the Registry Agency. Thus, the procedure will explicitly cover both discrepancies between the verified and registered information and the absence of a mandatory registration.
A fine of EUR 3,000 is proposed for failure to file on time, while the mechanism for monthly fines in the event of continued non-compliance remains in place. A fine of EUR 5,000 is provided for using the portal for purposes other than the comprehensive verification.
A mechanism is also provided for the judicial dissolution of companies, cooperatives, and nonprofit legal entities that fail to comply with the transitional registration requirements. Within two months after July 10, 2029, the Registry Agency will compile a list of non-compliant entities and forward it to the prosecutor’s office for the filing of claims. The submission of an application after this two-month period will not constitute grounds for dismissing the claims.
Which entities must submit information and by what deadlines
The main effective date under the draft is July 10, 2027. Entities already registered as of that date are required to report information on beneficial owners in accordance with the new requirements:
- By July 10, 2028 - Bulgarian companies, nonprofit legal entities and other legal entities subject to this obligation. This includes both entities with beneficial owners already registered and those for which the previous exemption no longer applies.
- By July 10, 2029 - a special, extended deadline for already registered single-member limited liability companies (EOOD) and single-member joint-stock companies (EAD) whose sole owner of the capital is a natural person and is the beneficial owner. They will also be required to report information about the beneficial owner under the new regime, even though the beneficial owner is already registered as the owner of the capital.
- By January 10, 2028 - a shorter deadline for already registered EOODs and EADs where the natural person - the sole owner of the capital - is not the beneficial owner. They will have to report information regarding beneficial ownership and the relevant nominal arrangements.
These are deadlines for bringing the information into compliance with the new requirements, not for re-registering the companies themselves.
The changes regarding notification of non-compliance and certain transitional provisions will take effect three days after publication.
The new access procedures will take effect following the technical upgrade of the registers, which the Registry Agency must complete by December 17, 2027. Until then, inquiries will be processed according to the current procedures, including after July 10, 2027.
Starting July 10, 2029, provisions for providing information through the European BORIS system - which links national registers of beneficial owners - are expected to take effect. This does not require separate registration of companies in the European system.
Of course, the above is only a preliminary draft, and the proposals and deadlines may be amended upon the law’s final adoption. We will continue to monitor how the adoption process unfolds and how the changes might affect the business.
This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.
