Changes in the final beneficiary information rule in the CNPJ

Federal Revenue of Brazil amended the its regarding the National Corporate Taxpayer Registry (CNPJ) legislation regarding to the final beneficiary information rules through the publication of Normative Instruction (IN) 1,729/2017 in the Official Gazette of Aug-15-2017.

The IN 1,634/2016 was changed, which had changed significantly the CNPJ as well as the definition of which companies are required to register, in addition to establishing those that shall be required to provide information about their representatives and their corporate chain, in order to identify the final beneficiaries of companies’ activities.

It is worth noting that the standard treats the final beneficiary as "the natural person on whose behalf a transaction is conducted" or "the natural person who ultimately, directly or indirectly, controls or significantly influences the entity".

The changes made

We may list the changes brought by the IN 1,729/2017 among others are:

1) Cadastral information related to entities domiciled abroad must cover the persons authorized to represent them, as well as their corporate chain, until reaching the natural persons characterized as final beneficiaries. However, they became exceptions to this rule:

1.1) investment funds specially set up and intended solely to receive resources from supplementary pension plans or personal insurance schemes, provided that they are regulated and supervised by a competent governmental authority in their country of origin; and

1.2) collective investment vehicles domiciled abroad whose shares or representative shares equity interest are admitted to trading on regulated markets and regulated by a body recognized by the CVM or collective investment vehicles domiciled abroad: the minimum number of shareholders is equal to or higher than 100, provided that none of them has significant influence; whose asset portfolio management is done in a discretionary manner by a professional administrator registered with a regulatory entity recognized by the CVM; which is subject to the investor protection regulation of a regulatory entity recognized by the CVM; and whose assets portfolio is diversified, thus understood as the one whose assets concentration of a single issuer does not characterize the significant influence.

2) For entities domiciled abroad, the registration information must cover natural persons authorized to represent them, their controllers, managing directors and directors, if any, as well as the natural persons or companies in behalf of whom these entities have been formed, and must be informed in the Members and Directors Board (Quadro de Sócios e Administradores -“QSA”), and will be carried out in the manner set forth in Articles 19 to 21 of IN 1,634/2016.

3) The foreign entities referred to in Paragraph 2 of Articles 19, 20 and 21 of IN 1.634/2016 must inform within 90 days, from the registration date, that there are no final beneficiaries at “Coleta Web”, if there is no qualified person as final beneficiary.

4) The inclusion of other entities domiciled abroad in the CNPJ, uncovered by articles 19 and 20, occurs in disciplined manner in Articles from 14 to 16, in compliance with the provisions of paragraph 2 of Article 20 and with indication of its final beneficiaries pursuant to Article 8, all of IN No. 1,634/2016, and also note that the address of the entity domiciled abroad must be informed in the CNPJ and, where appropriate, transliterated. In addition, the statement provided in Annex XI must accompanied by the application and the final beneficiaries may be indicated within 90 days from the registration date.

5) Disqualification from registration with the CNPJ if the entity's QSA member:

5.1) if a company does not have CNPJ, unless entity domiciled abroad not obliged to CNPJ, or their registration is absent or is suspended, written-off, unfit or null;

5.2) if an individual does not have a CPF, unless is not obliged to foreign CPF or the registration is absent or is suspended, canceled, or null.