Beneficial Owners (UBO) in Bulgaria — Practical Guide (2026)

What you will learn

• What constitutes a “beneficial owner” under the AMLA and when the senior management fallback applies
• When beneficial owner identification must be carried out
• A step-by-step identification procedure (3 methods under Art. 59 AMLA)
• How to determine the beneficial owner in complex corporate chains
• When and how to file a declaration in the Commercial Register
• The new discrepancy notification obligation (14 days, effective 16 July 2024)
• Which entities are exempt from registration
• What sanctions apply for non-compliance

What is a Beneficial Owner (Art. 59 AMLA — Threshold Above 25 %)

The definition of “beneficial owner” is set out in § 2(1) of the Additional Provisions of the AMLA. It provides three scenarios, applied sequentially:

Scenario 1: Direct or Indirect Ownership (§ 2(1)(1))

A beneficial owner is a natural person who directly or indirectly holds more than 25 % of the shares, equity interests, or voting rights in a legal entity. The 25 % threshold is definitive — holding at least 25.01 % is sufficient.

Direct ownership means the natural person is recorded as a shareholder/partner in the Commercial Register.

Indirect ownership means control is exercised through intermediary legal entities. For example: if Person A owns 100 % of Company B, and Company B owns 30 % of Company C — Person A indirectly owns 30 % of Company C and qualifies as its beneficial owner.

Scenario 2: Control by Other Means (§ 2(1)(2))

If the 25 % threshold is not met, but a natural person exercises control by other means — through contractual arrangements, trusts or similar legal arrangements, or the right to appoint or dismiss the majority of the members of a management or supervisory body — that person also qualifies as a beneficial owner.

Scenario 3: Senior Management Fallback (§ 2(1)(3))

If no beneficial owner can be identified under either Scenario 1 or Scenario 2, the natural person holding a senior management position in the legal entity (managing director, executive director, etc.) is deemed the beneficial owner.

Important: Scenario 3 is a “last resort” and applies only when identification under Scenarios 1 and 2 has been exhausted. The obliged entity must document the steps taken and the reasons why it was unable to identify a person under the first two scenarios.

When Identification Is Required

Obliged entities under Art. 4 AMLA must identify the beneficial owner of their client in the following cases:

1. When establishing a business relationship — before commencing business dealings.
2. When carrying out an occasional transaction — above the prescribed thresholds.
3. When there is suspicion of money laundering or terrorist financing — regardless of the transaction value.
4. When circumstances change — when the obliged entity receives information about a change in the client’s ownership or control structure.
5. During ongoing monitoring — periodic verification that beneficial owner information remains current.

Identification must be carried out before establishing the business relationship. In exceptional cases (where interrupting the normal course of business is undesirable), identification may be completed during the establishment of the relationship, but as quickly as possible after initial contact.

Step-by-Step Identification Procedure

Art. 59(1) AMLA prescribes three sequential methods for identifying beneficial owners:

Step 1: Registry Check (Art. 59(1)(1))

The first and mandatory method is a check in the relevant public register:

• Commercial Register — for commercial companies registered in Bulgaria (EOOD, OOD, AD, etc.).
• BULSTAT Register — for NGOs, foreign legal entities, and other subjects.
• Beneficial Ownership Register — declarations filed under Art. 63 AMLA.

During the check, verify: who is recorded as a shareholder/partner, what the ownership structure looks like, and whether a beneficial owner has been registered.

Step 2: Requesting Documents from the Client (Art. 59(1)(2))

If the registry information is insufficient (e.g., complex corporate structures with foreign companies), request documents from the client:

• Certificates of current status from foreign registers
• Constitutional documents (articles of association, partnership agreements)
• Shareholder registers
• Share registers
• Trust deeds
• Corporate structure chart (organisational chart)

Step 3: Declaration under Art. 59(1)(3) (As a Last Resort)

The declaration is permissible only if the information from Steps 1 and 2 is insufficient or contradictory. The declaration is completed by the client’s representative and contains data on the beneficial owner — name, date of birth, nationality, identity document, nature and extent of control.

Practical tip: Even when the registry data is clear (e.g., a single-member LLC with a natural person as owner), it is advisable to document the check performed — save a printout or screenshot from the register with the date of the check.

Step 4: Verification

After identification, verify the collected information:

• Compare data from different sources
• In case of doubt — conduct additional checks (media coverage, sanctions lists, PEP lists)
• Document the verification results

Step 5: Ongoing Monitoring

Identification is not a one-off event. You are required to carry out ongoing monitoring and update beneficial owner information when circumstances change.

Complex Corporate Chains — Examples

Example 1: Chain of Companies (Indirect Ownership)

Natural person A owns 60 % of Company B (registered in Germany). Company B owns 50 % of Company C (registered in Bulgaria).

Calculation: Person A indirectly owns 60 % × 50 % = 30 % of Company C. Since 30 % > 25 %, Person A is the beneficial owner of Company C.

Example 2: Multiple Levels (Ownership Dilution)

Natural person B owns 80 % of Holding 1. Holding 1 owns 40 % of Holding 2. Holding 2 owns 70 % of Company D.

Calculation: Person B indirectly owns 80 % × 40 % × 70 % = 22.4 % of Company D. Since 22.4 % < 25 %, Person B is not a beneficial owner of Company D under Scenario 1. Scenarios 2 and 3 must be examined.

Example 3: Nominee Director

Company E is registered in an offshore jurisdiction. Its director is a nominee. Actual control is exercised by natural person C through a trust deed.

Conclusion: Person C is the beneficial owner under Scenario 2 (control by other means — through contractual arrangements).

Example 4: Widely Dispersed Ownership

A joint-stock company with thousands of shareholders, none holding more than 5 %. No shareholder agreements or other control mechanisms exist.

Conclusion: No beneficial owner can be identified under Scenarios 1 or 2. The beneficial owner under Scenario 3 is the person in a senior management position (CEO or chairperson of the management board).

Declaration in the Commercial Register

Who Must Register a Beneficial Owner

Under Art. 63(1) AMLA, the following legal entities and legal arrangements must register their beneficial owners in the relevant register:

• Commercial companies — in the Commercial Register
• NGOs — in the NGO Register
• Other legal arrangements — in the BULSTAT Register

Form and Contents of the Declaration

The beneficial owner declaration (under Art. 63(4) AMLA) contains:

• Data on the legal entity (name, UIC, registered office)
• Data on the beneficial owner (name, date of birth, nationality, type and number of identity document, address)
• Nature and extent of rights held (share, percentage, type of control)
• Data on intermediary legal entities (for indirect ownership)

When a Declaration Is NOT Required (Art. 63(5))

A declaration is not required when the beneficial owner data is evident from another entry in the Commercial Register. In practice, this means:

• Single-member LLC (EOOD) with a natural person as owner — the beneficial owner is the sole owner; the data is evident from the registered sole proprietor entry.
• LLC (OOD) with natural person partners — if all partners hold more than 25 % and are natural persons, the data is evident from the registered equity interests.

Note: Even when no declaration is required under Art. 63(5), the identification obligation of obliged entities (banks, accountants, etc.) remains. They must independently carry out identification under Art. 59 AMLA.

Filing Deadline

The declaration must be filed within 7 days of a change in circumstances (new beneficial owner, change in ownership structure).

Discrepancy Notification (14 Days, Effective 16 July 2024)

As of 16 July 2024, new Art. 63(11) AMLA introduced a discrepancy notification obligation.

What Constitutes a “Discrepancy”

A discrepancy exists when the beneficial owner data collected by the obliged entity during its due diligence differs from the data registered in the Commercial Register (or the relevant other register).

Who Must Notify

The obligation falls on the obliged entity under Art. 4 AMLA (the bank, accountant, lawyer, etc.) — not on the legal entity whose data is discrepant.

Deadlines

• 14 days from identifying the discrepancy — the obliged entity notifies the Registry Agency.
• 7 days from receiving the notification — the legal entity must file an application to correct or remove the discrepancy (Art. 63(12) AMLA).

Practical Steps

1. During due diligence, compare the beneficial owner data you have collected with the data registered in the Commercial Register.
2. If you identify a difference — document the discrepancy.
3. Notify the Registry Agency within 14 days.
4. Inform the client of its obligation to correct the data within 7 days.
5. Retain a copy of the notification and correspondence.

Exemptions (Public Companies and Others)

Not all legal entities are required to file a beneficial owner declaration. Exempt entities include:

• Public companies — companies whose shares are traded on a regulated market (stock exchange) within the EU or in a country with equivalent transparency requirements. Their shareholder information is publicly available through capital market regulatory mechanisms.
• Legal entities whose beneficial owner data is evident from another entry (Art. 63(5) AMLA) — as described above for single-member LLCs and LLCs with natural person partners.
• Branches of foreign legal entities — when the parent company has registered its beneficial owners in a register of an EU Member State.

Note: Exemption from the declaration requirement does not release the obliged entity under the AMLA from the obligation to identify the beneficial owner during its due diligence.

Sanctions

The sanctions regime for non-compliance with beneficial owner registration obligations is strict:

Key feature: The fine/pecuniary sanction is imposed every month until the registration application is filed. This means prolonged non-compliance can result in the accumulation of substantial amounts.

Record Retention Period

• 5 years after dissolution of the legal entity — obligation to retain beneficial owner documentation.
• 10 years — data remains accessible in the register after deletion of the legal entity.

Frequently Asked Questions

Conclusion

Beneficial owner identification is a cornerstone of the anti-money laundering and counter-terrorist financing framework. With the new discrepancy notification obligation (effective 16 July 2024), the responsibilities of obliged entities have expanded further — it is no longer sufficient merely to collect information; you must compare it with registered data and act within strict deadlines when inconsistencies are found.

The Innovires Legal team can assist you with developing beneficial owner identification procedures, preparing declarations for the Commercial Register, and bringing your internal rules into line with current requirements. Contact us for a consultation.

This article is for informational purposes only and does not constitute legal advice. For questions specific to your situation, please consult a qualified lawyer. The information is current as of the date of publication — 26 March 2026.