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08 October 2019 / news

Implementation of the Dutch UBO-register

On 4 October, 2019, certain amendments to and clarification of the “Act on the registration of ultimate beneficial owners of corporate entities and other legal entities” (the UBO-register) were presented by the Dutch government to parliament. In this newsletter the implementation and certain practical aspects of the Dutch UBO-register are described.

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The UBO-register is a register that contains certain personal details of ultimate beneficial owners (UBO’s) of Dutch corporate entities and other legal entities (entities).

The UBO-register has to be implemented by 10 January 2020. After entering into force, existing entities have 18 months to submit relevant UBO-information to the Dutch Chamber of Commerce (CoC).

Who is subject to registration?

The following entities that are incorporated or established under Dutch law are required to submit UBO-information to the CoC:

  • Private limited companies (BV’s) and public limited companies (NV’s);
  • Foundations (stichtingen), associations (verenigingen), mutual insurance associations (onderlinge waarborgmaatschappijen) and cooperatives (coöperaties); and
  • Limited partnerships (maatschappen, vennootschappen onder firma and commanditaire vennootschappen).

Non-Dutch entities are not required to submit information on their UBO’s to the Dutch UBO-register, even if they have their principal place of business or a branch office in the Netherlands.

In the clarifications, it was once more confirmed that listed companies that are subject to certain disclosure requirements and their 100% subsidiaries are not required to submit UBO-information. Mutual funds will not be included in the regular UBO-register, but will be required to register UBO-information in a UBO-register for trusts and similar legal structures. This UBO-register for trusts will be implemented through a separate legislative proposal. On 30 June 2019 it was announced that the Dutch UBO-register for trusts will also be publicly accessible. With this, the Netherlands opts for a more extensive implementation than the EU Anti-Money Laundering Directive prescribed.

Who is UBO?

A separate Decree (The Dutch Anti Money Laundering and Terrorism Financing Decree 2018) defines which individuals must in any event be registered as a UBO for various types of entities. The enumeration is not exhaustive and entities may have more than one UBO. In the below, we describe which individuals, under the Decree, must in any event be considered a UBO for BV’s and NV’s, foundations and limited partnerships:

  • In case of BV’s and NV’s: UBO’s are the individuals who directly or indirectly hold more than 25% of the shares, voting rights or the ownership interest in the company, or who through other means ultimately own or control the company. If an individual holds a sufficient ownership interest in a corporate entity through depository receipts issued by a Dutch foundation (stichting administratiekantoor), the individual will still qualify as UBO.
  • In case of foundations: UBO’s of a foundation are the individuals who directly or indirectly have an ownership interest of more than 25%, who can exercise more than 25% of the voting rights in respect of changes of the articles of the foundation, or who can exercise effective control over the foundation.
  • In case of limited partnerships: UBO’s are the individuals who directly or indirectly have more than 25% ownership interest in the partnership, who directly or indirectly can exercise more than 25% of the voting rights regarding changes of the limited partnership agreement or regarding the execution of that agreement other than through acts of management to the extent that decision making by majority vote is required in that agreement, or who can exercise effective control over the limited partnership.

In the aforementioned cases, an ownership interest exists if an individual is entitled to (>25%) distributions of profits or reserves of an entity or partnership, or is entitled to the balance in case of liquidation. If no UBO can be found based on the aforementioned criteria, the individual(s) that hold the position of senior managing official(s) will be considered the UBO(s). In the case of a BV, NV and foundation the statutory board members are the senior managing officials. In the case of a limited partnership, the general partners are the senior managing officials. The clarifications to parliament note that it will be visible in the UBO-register whether a person is registered in the capacity of senior managing official.

What UBO-information will be registered?

Entities are required to submit information on all their UBO’s. Part of this information will be publicly accessible in the Dutch Trade Register. Another part of the information is only accessible to certain competent authorities and the Financial Intelligence Unit. It is currently being considered whether certain other obliged entities (under the EU Anti Money Laundering Directive) should get excess to the non-publicly accessible information as well.

Publicly accessible UBO-information

  • Surname and last name;
  • Month and year of birth;
  • Nationality;
  • Country of residence;
  • Nature and size of the beneficial interest held (presented in fixed ranges of 25%-50%, 50%-75% or 75%-100%).

Not publicly accessible UBO-information

  • Citizen Service Number (Burgerservicenummer, ‘BSN’) / foreign tax identification number (TIN);
  • Date of birth;
  • Country and place of birth;
  • Address;
  • Copy of passport / ID;
  • Documentation supporting (i) the conclusion that the individual qualifies as UBO and (ii) the nature and size of the beneficial interest held.

Will a search in the UBO-register be registered?

The public can only access the publicly accessible UBO-information with a valid registration and in exchange for a fixed fee. It is stated in clarification to parliament that two additional measures will be taken to improve the protection of privacy of UBO’s: the identity of the persons who access the register will be registered by the CoC and it will be visible to UBO’s how many times their information has been consulted. Consultations by the Financial Intelligence Unit and other competent authorities will be excluded from this information.

Can access to UBO-information be restricted?  

Upon request, access to UBO-information can be restricted to the public if the UBO is a minor or otherwise legally incapable, or if the publication of UBO-information would expose him to a disproportionate high risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. It has become clear that the Netherlands restrictively makes use of its option to shield information: it is proposed that only the UBO-information of a minor or person who is otherwise legally incapable will be restricted. Other UBO-information will only be restricted if a person is under protection of the Public Persecutor or the National Coordinator for Counterterrorism and Security. If access to UBO-information is restricted, only the nature and size of the beneficial interest held will be registered.

The registration process will be designed in such a way that it is possible to indicate upon registration whether UBO-information should be shielded (based on one of the conditions as mentioned above, for example being a minor). A request for the restriction of access to UBO-information will directly lead to shielding of the UBO-information. This restrictive access will be lifted once the request is rejected and the decision in a formal objection and appeal procedure (if any) has become final.

When does the UBO-register enter into force?

The UBO-register has to be implemented before 10 January 2020. After the UBO-register enters into force, existing entities have 18 months to submit relevant UBO-information to the CoC. The CoC will instruct all entities that are required to submit UBO-information within the first 18 months. Newly incorporated entities will need to register their UBO-information simultaneously with their registration with the CoC. The registration of UBO-information will be a prerequisite to obtaining CoC registration.

Contact 

Do you have any questions about the UBO-register? Maybe an informal introductory meeting would be of interest? Please contact your Loyens & Loeff adviser or get in touch with one of our dedicated advisers in the Family Owned Business & Private Wealth department.

Disclaimer

Although this publication has been compiled with great care, Loyens & Loeff N.V. and all other entities, partnerships, persons and practices trading under the name 'Loyens & Loeff', cannot accept any liability for the consequences of making use of this issue without their cooperation. The information provided is intended as general information and cannot be regarded as advice.



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