Last July 31, 2023, was the deadline given by the Dirección de Impuestos y Aduanas Nacionales (DIAN) to report the Registro Único de Beneficiarios Finales (RUB), which is a key tool in the fight against money laundering, terrorist financing, and tax evasion in Colombia. This system aims to ensure transparency in the beneficial ownership of companies and legal entities, identifying the beneficial owners who exercise significant control over them.
Legal Basis of the Registro Único de Beneficiarios Finales in Colombia
The Registro Único de Beneficiarios Finales in Colombia is supported by various regulations, among which Law 1778 of 2016 stands out, as well as Law 1762 of 2015, among others. These laws are complemented by the guidelines of The Financial Action Task Force (FATF), which establishes international standards in the prevention of financial crimes.
In this article, we will discuss the legal basis of the RUB in Colombia, who is obliged to register, the penalties in case of non-compliance, the procedure for registration, and the relevance for partners and owners of companies and even owners of real estate properties to be reported to the DIAN.
What is El Registro Único de Beneficiarios Finales - RUB?
El Registro Único de Beneficiarios Finales – RUB, is the registry through which legal entities (companies) and unincorporated or similar structures must provide information on their beneficial owners.
Colombia has Sistema de Administración de Riesgo de Lavado de Activos y de la Financiación del Terrorismo (SARLAT), in terms of compliance, as well as being part of various international mechanisms for the prevention of crimes of money laundering, corruption, tax evasion, human trafficking, drug trafficking, terrorist financing, among other crimes, therefore, entities have the duty to perform due diligence in order to mitigate the inherent risks.
As a general rule, the Beneficiarios Finales are individuals, even if they are owners or shareholders of a company or legal entity, such as a Corporation, Association, Foundation, Consortium, among others, whether they have a profit motive, even those structures that do not have or do not have legal personality in Colombia, will have as beneficial owners the individuals who ultimately own or control an entity, either directly or indirectly, according to Resolution #164 of 2021 of the DIAN.
Is the RUB in Violation of Law 1581 of 2012 Related to the Protection and Processing of Personal Data?
The secrecy of financial information in Colombia is at risk. The discussion of this issue is debatable for some people. However, it is an obligation to be integrated to Registro Único Tributario (RUT), being a law of the Republic of Colombia and part of the fight against corruption, evasion, laundering, and financing of terrorism, it is then reserved information that is only accessible to the Control Bodies such as the DIAN, Comptroller General of the Republic, Attorney General, among others. Thus, El Registro Único de Beneficiarios Finales (RUB) is an initiative that aims to centralize and keep updated information on the beneficial owners of legal entities, such as companies, organizations and other legal entities.
The concept of “beneficial owner” refers to the natural person who owns, controls or benefits directly or indirectly from a legal entity. In many cases, these individuals often remain hidden behind complex corporate structures, making it difficult to identify who actually controls and benefits from a company or organization. Accurate identification of beneficial owners helps prevent the misuse of legal entities for illicit purposes.
Who are the Beneficiarios Finales of Legal Entities?
In accordance with the provisions of Art. 631-5 of the Estatuto Tributario, the beneficial owner shall be the following:
The natural person who, acting individually or jointly, holds, directly or indirectly, five percent (5%) or more of the capital or voting rights of the juridical person, and benefits by five percent (5%) or more of the assets, yields or profits of the juridical person; or
The natural person who, acting individually or jointly, exercises direct and/or indirect control over the juridical person by any means other than those set forth in the previous point; or
When no beneficial owner is identified under the criteria indicated above, the natural person who holds the position of a legal representative shall be considered as the beneficial owner, unless there is a natural person who holds greater authority in relation to the management or direction functions of the legal person, in which case the latter natural person must be reported.
Obliged to Register in the RUB
In Colombia, the parties required to register in the Registro Único de Beneficiarios Finales (RUB) include various legal entities, such as corporations, companies, trusts and foundations. In addition, certain professionals, such as lawyers and accountants, who act as intermediaries in financial and commercial transactions are also subject to this obligation. Likewise, any other economic entity that has legal personality and is part of the chain of ownership must also be registered and consequently the natural persons that are beneficiaries of these are reported.
Sanctions for Non-Compliance with Beneficiarios Finales Reporting Obligations
Failure to comply with the obligation to register in the Registro Único de Beneficiarios Finales (RUB) or to provide incorrect or outdated information may lead to serious sanctions for companies and professionals obliged to report beneficial owners. Sanctions may include fines, temporary or definitive prohibition to operate, and cancellation of the commercial registration of the entity obliged to report beneficial owners.
Therefore, it is of vital importance that regulated entities comply with this responsibility and provide truthful and updated information to avoid legal consequences.
What Information must be Provided in El Registro Unico de Beneficiarios Finales - RUB?
The RUB must include the following information for each final beneficiary:
– Type of document
– Identification number and country of issuance
– Tax identification number – NIT or functional equivalent and country of issuance.
– Names and surnames
– Date and country of birth
– Country of nationality
– Location of the beneficiary
– Criteria for determining the beneficial owner
– Percentage of participation in the capital of the legal person
– Percentage of benefit in the yields, results or profits of the legal entity, unincorporated entity or similar structure
– Date from which it has the status of beneficial owner or the status exists
– Date from which it ceases to have the status of beneficial owner or the condition no longer exists.
The beneficial owners may be national or foreign individuals, tax residents or non-residents in the country. Therefore, the parties obliged to provide information in the RUB must provide the information of their beneficial owners referred to in Article 8 of Resolution No. 000164 of 2021 and, in case they do not have a NIT, they must provide their personal identification number.
The procedure to register in the RUB in Colombia involves the submission of accurate and detailed information on the beneficial owners of the entity. Personal data, percentages of participation in the entity, and the nature of their control over the entity must be provided. The Superintendence of Companies is the entity in charge of administering the RUB in Colombia and ensuring compliance with this obligation.
Relevance of RUB for Partners and Business Owners
Investors, partners and owners of companies have a crucial role in the Single Registry of Beneficial Owners, as they are considered the ultimate beneficial owners of the entities. They must ensure that they provide complete and updated information on their participation and control in the entity. Transparency in this information is essential to prevent concealment of true ownership and to strengthen the system against illegal activities.
How is The Information Provided in the Registro Unico de Beneficiarios Finales - RUB?
The information must be provided electronically, through the computer systems of the Dirección de Impuestos y Aduanas Nacionales – DIAN, by means of Form 2687 “Reporte de Beneficiarios Finales” and 2688 “Carga de Beneficiarios Finales”. The reporting process is totally free and online from the DIAN website. Here is a step-by-step tutorial from DIAN.
If you are a Beneficiario Final and you must report your information, consult your Accountant and Lawyer of confidence, in order not to fall into non-compliance that subsequently lead to sanctions by the DIAN.
Horizontal Property and its Relationship with the Registro Único de Beneficiarios Finales (RUB)
In Colombia, horizontal property refers to the division of a property into independent units, such as apartments, commercial premises, or parking lots, where each owner has exclusive rights over its unit and shared rights over the common areas. In the context of the Registro Único de Beneficiarios Finales (RUB), the entities that are subject to the obligation to register also include horizontal properties.
The DIAN has set the criteria for Horizontal Properties to carry out the Registro Único de Beneficiarios Finales (RUB) through Oficio #100208192 – 1135 dated September 08, 2022, and Resolution # 164 dated December 27, 2021.
Who is Obliged to Register Horizontal Properties in the RUB?
Although Horizontal Properties are non-profit entities that group communities of owners, they have their own legal personality, therefore, they must be registered in the RUB, being the administrations of horizontal properties or co-owners assemblies the subjects that must provide accurate information on the beneficial owners that exercise significant control over the management and decision-making of the property. In this particular case, the ultimate beneficiaries are the individuals who own the private units or who exercise control over the decisions of the co-owners’ meetings.
Criteria for Reporting Beneficial Owners of Condominiums or Communities of Owners
According to the current regulations, there are criteria applicable to Horizontal Properties or Condominiums:
1. All the owners acting individually or jointly with 5% of the coefficient of the horizontal property.
2. Person exercising direct or indirect control over the legal entity.
3. Natural Person Legal representative or other person exercising greater authority within the organization.
4. In illiquid estates that have been initiated or do not have more than 5% of the coefficient.
5. If the ownership of the property is shared by consanguinity or affinity (up to second degree), all persons must be reported to RUB.
6. Case Administrator who is owner and has 5% or more to be reported.
7. Minors who own 5% or more of co-ownership coefficient and foreign persons. Art. 8 of Resolution 000164 of 27-12-2021.
8. Case of Housing Leasing if it has more than 5% of the coefficient of the horizontal properties (the final beneficiaries of such financial entities are reported).
9. The goods or properties that are in abandonment must identify the holders of the right, although they are in abandonment, they must be reported equally in RUB.
Importance of RUB for Horizontal Properties
Registration in the RUB is essential for horizontal properties, as it provides transparency in the ownership structure and avoids possible cases of concealment of beneficial owners with hidden or illicit interests. The information provided in the registry allows the authorities to have a clear view of whom the real owners are and to take measures to prevent illicit activities, such as money laundering and tax evasion.
In summary, anonymity of natural persons, who could previously keep their investments in the country hidden through various legal mechanisms, is no longer allowed. Every Beneficiario Final must be reported in the Registro Único de Beneficiarios Finales (RUB).
Conclusions of RUB
El Registro Único de Beneficiarios Finales (RUB) in Colombia is a fundamental tool to prevent and combat money laundering, terrorist financing, and tax evasion. Its legal basis and compliance with international standards make it a pillar in the fight against financial crimes.
All regulated entities must understand the importance of their registration and provide accurate information on Beneficiarios Finales. The RUB, managed by the DIAN, contributes to strengthening the integrity of the financial and business system, promoting a more transparent and secure Colombia.
Similarly, horizontal properties, i.e. buildings, residential complexes and communities of owners in Colombia are also subject to the obligation to register in the RUB.
Questions, comments? Contact me today and I will be happy to discuss any of these issues further with you.
