Digital Signature vs. Shareholder’s Registry. Are they the same?
Costa Rica has been working for many years to meet the requirements to join the Organization for Economic Cooperation and Development or OECD. Some of those requirements include having a balanced budget which in part means having a better tax collection system.
On December 20th, 2016 the Costa Rican Congress published the law 9416 to Improve the Fight Against Tax Fraud. As the name implies, this law intended to improve the tax collection efforts of the Costa Rican government. As many of you may know, the Costa Rican government has a difficult time collecting taxes, or enforcing any law for that matter. Thus, it is required to improve its ability to collect taxes.
One effect of this law is for companies to file a report stating who the shareholders are. This report is known as the Transparency Registry of Final Beneficiaries. Currently, the Costa Rican government has no visibility of who the shareholders are of any given corporation. This visibility will allow the government to improve tax collection when it comes to the distribution of dividends or capital gains.
This registration of final beneficiaries requires the legal representative of a corporation (Not to be confused with an attorney. It refers to the CEO, President or Manager, as an example) to complete an online form stating the share distribution of the company. The form requires information from both the shareholder and the company.
Currently, the agencies overseeing the Registry of Final Beneficiaries are the Revenue Service (or Ministerio de Hacienda) and the Costa Rican Institute for Drugs (or Instituto Costarricense sobre Drogas also known as ICD). In addition, the Central Bank (Banco Central de Costa Rica) enabled the online platform for the filing of the report.
The deadline to file the report is January 31st, 2020. Otherwise, fines will be applied to each corporation that fails completing the report by that date. The government issues a schedule stating the months during which the corporations are supposed to file the report. Nevertheless, the government decided to issue a moratorium allowing all companies to file no later than January 31st, 2020.
The Digital Signature in Costa Rica
As noted, the filing of the report is done through an online platform. To be able to complete the report online it is required to have a digital signature. While the filing of the report requires the digital signature, the latter can be used for many other purposes.
In 2005, the Costa Rican Congress passed a law 8454 called “Electronic Documents, Digital Signatures, and Certificates Act” or Ley de Certificados, Firmas Digitales y Documentos Electrónicos. Under this law, a new legal method for signing documents was created, which is currently known as the Digital Signature.
According to the legal interpretation of this new form of signature, when a document is signed in this fashion, it is legally impossible for a person to deny or reject the authenticity of the signature, as it is obtained through the appropriate protocols to avoid any falsification whatsoever.
To obtain the digital signature, it is required to complete these steps and/or requirements:
• Valid ID such as a Costa Rican cédula or a DIMEX for foreign nationals.
• The person requesting the digital signature must schedule an appointment with an authorized bank.
• The person must appear at the appointment with the ID and must pay the corresponding fee which may vary depending on the bank.
• At the appointment and once the verification steps are completed at the bank, the person which receive the hardware for the digital signature, which is a card and a card reader which must be installed in a computer, which in turn will read the card through the reader at the moment of signing a document online.
The digital signature can be issued to both a person or a company. With this signature, it is possible to either sign a document online or to access a particular website or portal. For instance, it is possible to apply for some government permits such as an importation permit for a product through an online portal as long as a digital signature is available.
Other specific know uses of the digital signature include:
• Notary publics use it to file new incorporations of legal entities with the National Registry, using a portal called ‘Crear Empresa’.
• Notary publics use it to file marriages with the Civil Registry using a portal called ‘Matrimonio Digital’.
• To obtain health permits for businesses opening a retail location.
• Or to file the report of final beneficiaries as previously noted.
Are they the same?
No, simply put:
• The digital signature is a hardware-software based mechanism that allows you to authenticate your access to web pages and to digitally sign digital documents.
• The Shareholder’s Registry is a process to state information of your corporation, which has to be filed on an online platform, which requires authentication by digital signature.