Understanding control under Estonia’s AML Act.

According to § 9 of Estonia’s Money Laundering and Terrorist Financing Prevention Act, a beneficial owner (UBO) is the natural person who ultimately owns or controls a legal entity—either directly or indirectly.

• Direct control: A natural person directly owns more than 25% of the company’s shares or voting rights.
• Indirect control: A natural person controls another company (or companies) that, in turn, owns more than 25% of the legal entity.
• Control can also be exercised through other means, such as shareholder agreements or the right to appoint management.

It is also possible for a company not to have a reportable beneficial owner. For instance, in a private limited company where four shareholders each hold exactly 25%, none of them meets the threshold for control, and under Estonian law, no UBO is declared.

Lead-in:
Estonian law defines a beneficial owner as the real person who ultimately controls a company—usually through shareholding of more than 25%, either directly or indirectly.