This week, the Lower House of Parliament adopted the Implementation Act Registration of ultimate beneficial owners of companies and other legal entities (UBO register). The introduction of the UBO register stems from a European directive and applies to all member states. The Dutch register must be operational by 10 January 2020 at the latest.
Ultimate Beneficial Owners
An UBO is a natural person who ultimately owns or controls the entity. An UBO is defined as a natural person who has a direct or indirect ownership or control interest of more than 25%. An UBO must be registered for each entity.
The UBO registration requirement in the Netherlands only applies to entities established under Dutch law. Foreign companies and legal entities are not subject to a UBO registration requirement in the Netherlands. Entities established in another EU Member State may be included in the UBO register of that Member State. The following entities, among others, will be subject to the registration requirement:
- BV and NV
- foundation, association and cooperative, and
- partnership, general partnership and limited partnership
An open-end mutual fund is considered to be a trust. A separate register will be set up for trusts. A public-interest institution (ANBI) does not have an UBO; the sole beneficiary is the generally useful purpose. The board members must nevertheless be included in the UBO register. The register will state that the board members are not ‘owners’ of the assets of the ANBI.
Public data UBO register
The UBO register will be available to everyone. The following data will be accessible to everyone:
- month and year of birth
- state of residence
- nature and extent of the interest (no amounts, only ranges)
In addition to the public data, additional data are recorded. These data are accessible to the competent authorities. It is being investigated whether institutions that have an obligation to report pursuant to the Money Laundering and Terrorist Financing (Prevention) Act should also be given access to this non-public information. This includes, for example, lawyers, civil-law notaries, financial institutions and tax advisors. This group is also obliged to report any inconsistencies found in the register.
Measures to protect privacy
A number of measures have been taken to protect the privacy of the registered UBO. First of all, the consultation of the register must identify itself, register and pay a fee in order to gain access to the data. In addition, the UBO is given insight into the extent to which the information is consulted. This does not apply to consultations by the competent authorities. The UBO can submit a request to protect his or her data. This request will only be granted if the UBO is a minor, is legally incapable or if the UBO is protected by the authorities and is mentioned on a specific list for this purpose. Finally, as in the trade register, you can only search by the name of the legal entity and not by the name of the UBO.
The UBO-register must be implemented as of 10 January 2020. From that date, existing entities will have 18 months to comply with the registration requirement. New entities must register the UBO as soon as they are established. As long as no UBO is registered, the entity cannot be registered with the Chamber of Commerce.