Law No. 6446/19 and its regulatory decree enacted on January 10 created a new register of entities and final beneficiaries.
Below we list the most relevant provisions set forth by the law and its regulatory decree:
1. Obliged entities
• Legal entities regulated by the Paraguayan Civil Code and registered in Paraguay, including corporations and branches in general.
• Fiduciary businesses and investment funds.
2. Obligations
a) Provide information and documents related to the entity, its partners and authorities.
b) Hold a registry and inform the name of the natural persons who are final beneficiaries (i.e. those who directly or indirectly hold ownership of 10% or more, or that have other rights denoting control over the entity).
c) Update the information relating to the final beneficiaries.
d) Keep the documentation which supports the provided information for a period of 5 years.
3. Term for compliance
a) The regulation contemplates a deadline for entities created before December 3, 2019 to comply with its obligations. Deadlines range from February to April 2020, depending on the tax identification number of the entity.
b) Entities created after December 3, 2019 must provide the required information within 45 business days of their registration before the Public Registries.
c) Changes related to the information of the entity must be notified within 15 business days.
4. Sanctions
a) Fines ranging between Gs. 4,217,000 (USD 650) and Gs. 42,170,000 (USD 6,500) or up to 30% of the entity profits or dividends.
b) Other sanctions: (i) banning the opening of bank accounts or its operations with financial institutions and (ii) suspension of tax identification number.
5. Enforcement Authority
• General Directorate of Legal Entities, Corporate Structure and Final Beneficiaries.
• Until the Directorate is incorporated, the Abogacía del Tesoro will be the enforcement authority.
