Azerbaijan – New UBO Registration Requirements

Azerbaijan has implemented new Ultimate Beneficial Owner (UBO) registration requirements through Law no. 560-IIQ, effective 15th of May 2025. This new legislation aims to enhance transparency in corporate ownership structures while balancing confidentiality of beneficial ownership information.

Scope of Application

The requirements apply to:

• Legal Entities registered in Azerbaijan
• Branches of foreign companies
• Representative Offices operating within the country

Definition of UBO

Under Azerbaijan’s new Law no. 560-IIQ, a beneficial owner is defined as:

An individual or individuals who:
1. Directly or indirectly own shares that ultimately constitute 10% or more of the authorized capital of a legal entity, or
2. Hold voting rights that allow them to exercise significant influence over the decision-making of the legal entity, or
3. Can exercise significant influence on the legal entity’s decision-making through an agreement, despite the distribution of participation shares potentially excluding the existence of a significant participation share.

Required Information for Registration

Entities must submit the following details:

• Full name, date of birth, and identification number
• Citizenship and place of residence
• Direct or indirect ownership status
• Scope and basis of influence over the entity
• Politically Exposed Person ‘PEP’ status (including relatives)
• Details of intermediate entities in the ownership chain

Registration Deadlines

Deadline for registration is based on company size:

Additional Information:

• Investment Funds: Fund managers and entity managers are considered beneficial owners when ownership is widely dispersed
• Listed Companies: Management body satisfies UBO requirements for publicly listed companies with 10%+ ownership
• Change Reporting: Updates must be registered within 40 days
• Data Privacy: UBO information remains confidential and restricted from public access

The Risks of Non-Compliance

Failure to comply with UBO registration obligations including:

• Non-submission of required information to the register or
• Failure to report subsequent modifications to recorded information within stipulated deadlines,

Shall be subject to the following monetary penalties:

• For natural Persons acting in an official capacity: AZN 1,000 – 2,000 fine
• For legal entities: AZN 2,500 – 3,000 fine

How Mercator® by Citco Can Help

Need assistance? Mercator can help with UBO registration and internal UBO register preparation. Contact mercator@citco.com