As from 27 September 2020, enterprises are obliged to register their owners or the persons controlling them in a so-called UBO-register. This is the result of European rules. The purpose of the register is to combat financial-economic crime, such as money laundering.
Status of the UBO-register
The Cabinet wants the new UBO-register to take effect from 27 September 2020.
What is a UBO?
UBO stands for ‘ultimate beneficial owner’ (the ‘ultimate interested party’). This is the person who ultimately owns or controls a company, foundation or association (a so-called legal entity).
In the case of a BV or nv, for example:
- persons holding more than 25 per cent of the shares;
- persons with more than 25 per cent of the voting rights;
- persons who have de facto control over the enterprise.
What is the UBO register?
The UBO-register makes transparent who pulls the strings of legal entities established in the Netherlands. The UBO register must be in force in all EU member states. Officially from 1 January 2020 but this is delayed in the Netherlands. This is stated in the (amended) fourth European Anti-Money Laundering Directive. All EU member states must have a UBO-register. The Dutch UBO-register will be part of the Trade Register of the Chamber of Commerce (KVK). Part of the information in the register will become public.
Why a UBO-register?
The purpose of the UBO-register is to combat financial-economic crime. Think about this:
- money laundering;
- tax evasion;
- terrorist financing.
Since some of the information in the register is public, individuals and organisations can make more informed decisions about who they want to do business with.
Who is subject to the UBO registration requirement?
The UBO registration obligation will apply to the following organisations:
- (non-listed) bv’s and nv’s;
- other legal entities: foundations, associations subject to the UBO registration requirement, mutual societies and cooperatives;
- partnerships: partnerships, general partnerships and limited partnerships;
- shipping companies;
- European public limited companies (SEs);
- European Cooperative Societies (SCEs);
- European Economic Interest Groupings;
Who is not subject to the UBO registration requirement?
The following groups are not obliged to register:
- listed companies;
- sole proprietorships;
- legal entities governed by public law;
- associations of owners;
- some historical legal entities.
Which data are public?
Some of the data of the UBO becomes public. It is about:
- First name and surname;
- month and year of birth;
- nationality and country of residence;
- nature and extent of the economic importance of the UBO, expressed in bandwidths: 25%-50%, 50-75% and 75-100%.
The public part of the UBO register can only be searched in the name of the company or legal entity. It is therefore not possible to search in the name of the UBO. Retrieving the data from the register costs money.
Which data is not public?
The following data are not public. It is about:
- BSN/foreign tax identification number (TIN);
- day of birth;
- country and place of birth;
- residential address;
- copy of valid identity document;
- copy of document(s) proving the nature and extent of the economic interest.
Only competent authorities and the Financial Intelligence Unit may access this information.
How does the registration work?
The UBO-register will become part of the Trade Register of the Chamber of Commerce (KvK). Companies and organisations that are already in the Trade Register will have 18 months after the UBO-register has come into effect to register a UBO.
The Chamber of Commerce will write to all ‘legal entities’ that are obliged to register a UBO. The Chamber of Commerce will issue the letters in phases in order to be able to process all registrations properly.
In the course of this year or 2021, you can therefore expect a message with the request to register a UBO, explaining how to do so. The Chamber of Commerce has already stated that the registration of a UBO is free of charge. The person within your private limited company who is ‘authorised to sign’ must also register the UBO.
So you probably do not have to register immediately one day after the register opens. However, if you want to set up a new legal entity from the start of the register, for example a new separate UBO, registration of a UBO is a condition for obtaining a Chamber of Commerce number.
Does this notification take a long time?
According to the Cabinet’s estimation, this should be reasonably easy. Also because passing on a lot of information is in principle a one-off, unless things change in the situation of the UBO. Some of the companies will already have the necessary UBO information on their shelves.
In that case, the government thinks that it will take the company approximately one hour to pass on the information. Companies that do not have the data ready yet will lose about two hours in passing on the information.
What are the consequences if I do not provide the information?
As stated above, the Chamber of Commerce will register all companies that should register a UBO in the register. If there is no response, the Chamber of Commerce can send one more reminder. The Chamber of Commerce passes on the details of all companies that have not yet registered a UBO after eighteen months to the Bureau Economische Handhaving (BEH).
This can pass on the data for criminal prosecution or refer them to the administrative courts for a fine. Failing to report the UBO or entering incorrect data may result in a fine or imprisonment.
An important role in ensuring a correct register is played by bodies that have to investigate clients on the basis of the Money Laundering and Terrorist Financing (Prevention) Act (the so-called Wwft institutions). These are, for example, banks.
If they discover that information in the UBO register does not match their own data, they are obliged to report this to the Chamber of Commerce. The latter can then pass this on to the BEH, and the agency can enforce it. If Wwft institutions make such a report, the company will be ‘under investigation’ in the UBO register.
UBO-register guarantees privacy via AVG (GDPR)
The register complies with data protection requirements and the General Data Protection Regulation (AVG). The starting point is that part of the data is accessible to everyone.
Shielding of public data of the UBO
In exceptional circumstances, a UBO may request that the public data be blocked. This is possible if the UBO:
- is a minor;
- is under guardianship or administration;
- has police security.
Bodies such as the Public Prosecution Service, the police, the Tax and Customs Administration and the Financial Intelligence Unit can always view all data.
No UBO register for foreign companies
UBOs of foreign companies are not included in the register. The same applies to legal entities with a principal or secondary establishment in the Netherlands. They will have to comply with the regulations in the country where they are established.